Tuesday, 12 December 2017
Defence Forces Pensions
47. To ask the Taoiseach and Minister for Defence his plans to make provisions for post-2013 Defence Forces members who are mandatorily retired at 58 years of age and who are not eligible to receive a contributory State pension until 66 years of age; and if he will make a statement on the matter. [52735/17]
There has correctly been much talk recently about the pay and conditions of Defence Forces personnel, but I wish to raise the issue of the Defence Forces pension system, which is a total mess. Rules which have been changed over the austerity years are simply having a brutal impact on retired members. Those who entered the Defence Forces as officers from 2013 and who will have no choice but to retire at 58 or 60, will face the loss of the value of their contributory pensions. Meanwhile, there is the issue of pension abatement, which also consistently has a major impact.
I take it that the Deputy is referring to the absence of the concept of "supplementary pensions" from the provisions of the single public service pension scheme.
The occupational pension scheme terms of post-1 January 2013 new entrants to the public service, including the PDF, are governed by the Public Service Pensions (Single Scheme and Other Provisions) Act 2012. All first-time new entrants to pensionable public service employment on or after that date are members of the single scheme. Under the 2012 Act, overall statutory responsibility for the single scheme pension terms and rules rests with the Minister for Public Expenditure and Reform.
The single scheme was one of the key structural fiscal reform commitments agreed by Government with the EU and the IMF in 2010 under the programme of financial support for Ireland. In the context of the Government's decision to introduce the single scheme, a stated primary objective is to help significantly reduce the cost of public service pensions in the long term through reform of the public service pension system.
The new scheme will be fairer, particularly for those on low and moderate earnings and, above all, the public service will be better able to manage the costs associated with the demographic and other changes which are under way. These policy objectives and the underlying rationale for them were well publicised in advance of the enactment of the 2012 Act.
The terms and rules of the single scheme, however, make no provision for the concept or award of supplementary pensions for any new entrants joining any public service group on or after 1 January 2013. This position has been confirmed to the PDF representative associations.
However, there are many other established features of the pre-1 January 2013 public service occupational pension schemes that have been discontinued or fundamentally changed under the single scheme. Among the most notable of these changes is the introduction of career-average pension accrual under the single scheme. This is in place of the more costly final salary pension accrual applicable in the earlier "pre-existing" public service pension schemes.
Additional information not given on the floor of the House
I should also mention that, notwithstanding the distinguishing features of the single scheme, members of the PDF in that scheme retain the minimum pension age of 50 to reflect operational needs, as already applies to new entrant military personnel recruited since April 2004. Importantly, the single scheme also retains "fast accrual" pension terms for groups such as the Defence Forces, given that for operational and HR policy reasons they are required to retire earlier than the norm, and on that account they retain early-paid pensions and accelerated pension accrual.
I ask the Minister of State to take a look at this issue. Defence Forces pensions are not like Civil Service pensions; they are a completely different category altogether. Subjecting them to the same rules and regulations, which are being applied in a very slapdash manner, is not helpful for people who loyally serve this State. We are talking about people retiring - being forced to retire - at, say, 58 or 60, not being able to get their State pension until they are 66 or 67 and then, when they perhaps seek employment to make up the shortfall, are subject to the pension abatement criteria, which are being applied in a completely slapdash manner. This means that people who have been trained and are highly qualified cannot in essence get jobs in the public sector at present or they will see the value of their pension deducted from their employment. We therefore have the ridiculous scenario whereby officers and highly skilled people who have left the Army are working in low-pay jobs as shelf-packers in Tesco, where they can keep their pensions, instead of getting jobs in the public sector. It is an absolute joke, and I appeal to the Minister of State to examine how this is being applied.
This issue was raised on numerous occasions at meetings of the representative associations. As a consequence, officials in my Department and association delegates met with the Minister for Public Expenditure and Reform to discuss it. I take Deputy Daly's point that if a member who was recruited before 1 January 2013 retires from the Permanent Defence Force at a specific age and does not take up other employment, he or she is entitled to the supplementary pension, but persons recruited after 2013 do not have the same entitlement. This change will not affect any members in the short term, but after the associations raised it with me, I spoke to people in the Department of Public Expenditure and Reform and a meeting was set up with my officials and the association delegates. I understand the matter is under negotiation.
I welcome the Minister of State's acknowledgment that there is a problem. In fact, it is a substantial problem and the whole system seems to be in complete disarray. If the meetings to which he referred are meaningful at all, they will uncover the scope of the problem. Looking at the abatement position, it is not even applied evenly across Departments. Nobody seems to know what the rules are for Defence Forces members or how to apply them. Some members who move to certain State agencies and Departments are seeing their pensions cut while others are not. Members going to work in semi-State agencies do not see their pensions at all but members going into Departments do. It is not even clear whether the policy is being applied evenly within Departments. The more than 1,000 highly skilled and trained people who left the service between 2016 and 2017 and who cannot see out their remaining years without working are being severely impacted by this. I am glad the Minister of State is looking at the issue, but I urge him to ensure it is addressed urgently and that a substantial overhaul of the system is undertaken. While I recognise that some of the measures he referred to were introduced for the Civil Service for good reasons, the Defence Forces are a different category entirely.
I agree that Defence Forces members are different from other public servants. The Deputy may be aware that I have undertaken to review the contracts of recruits from 1994 and 2006. The change we are discussing will not affect anybody immediately, being applicable only to those who joined after 1 January 2013. This means it will be 2040 or perhaps the mid-2040s before there is an impact on personnel. As I said, the matter is under consideration by officials in my Department, and they and the representative associations have met with officials from the Department of Public Expenditure and Reform. I am not sure how those negotiations are going on, but it is a matter for the latter Department to find an acceptable solution to this issue.