I thank Deputy Mitchell for raising the matter. It is a matter which was the subject of a recent parliamentary question and I set out in my reply to that question the position regarding the public service pension reduction, PSPR.

Before addressing in detail the particular point raised by Deputy Mitchell, it is important to set out the context in which these measures are introduced. As is clear to all citizens, there is a very serious crisis in the economy and a very serious deterioration in revenues into the State. Ireland is availing of financial assistance programmes provided by the EU-IMF and has undertaken to meet spending targets set out in that regard.

In introducing the PSPR from 1 January 2011, the then Government effectively decided, in the context of the serious national budgetary position, that retired public service pensioners should make a contribution to the overall required fiscal adjustment. This decision was taken having regard to the gap between the burden being borne by those currently in public service employment, where the pension related deduction, PRD, and the direct pay reduction were having an impact, and their retired counterparts.

The current Financial Emergency Measures in the Public Interest Bill proposes limited further reductions to high value public service pensions. That Bill is to be discussed later today. It is one of a number of measures taken or proposed by the Government as part of our plans to restore stability to the public finances. None of these measures were or are being adopted lightly but are considered necessary in view of the wide gap that has emerged between our income as a State and our expenditure, and our commitment to restore order to the public finances by reducing the general Government deficit to under 3% of GDP by 2015.

Any reduction in pension payments is a serious step. However, the grave condition of the public finances and the threat to Ireland's economic well-being provide the context for such an exceptional measure. I would note that the first €12,000 of anybody's pension is exempt from the reduction and that the bands and rates of the reduction are progressively structured so that persons on lower pensions are proportionately less affected than those on higher pensions.

I would add that as recently as yesterday, I met representatives of the Alliance of Retired Public Servants to hear at first hand their concerns about the impact of pension reductions on the lives of public service pensioners. As I indicated to them, I would genuinely wish economic circumstances were otherwise but the reality is the Government must continue to take all necessary steps to ensure the economic survival of the State, and this inevitably impacts across society.

I also informed the alliance representatives that it is my intention, as a matter of priority, to move towards reducing the burden of the public service pension reduction, with the initial focus on people in receipt of low pensions, at the earliest date economic progress permits. I am very aware of how critical this matter is for pensioners and I intend to keep this matter under review to see when we can begin to take steps to reduce the burden on public service pensioners in particular.

On the particular question of whether identified portions or specific elements of public service pensions could be exempt from the PSPR, the long-standing norm in public service pension schemes is that service which is purchased or transferred-in is treated in the same way as ordinary accrued service for the purposes of calculating pension benefits initially and on an ongoing basis. This parity of treatment also applies in respect of the exposure of pensions to the public service pension reduction. Since its introduction on 1 January 2011, the PSPR has applied to affected public service pensions in an across-the-board fashion, with no distinction being made in respect of any part of a pension which derives from purchased or transferred service, and I do not have plans to change this arrangement.

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