Seán Canney (Galway East, Independent)
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102. To ask the Minister for Public Expenditure and Reform if he intends to increase existing public sector pensions to take account of the exceptional increase in the cost of living; and if he will make a statement on the matter. [29036/22]

Seán Canney (Galway East, Independent)
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Regarding public sector pensioners and the cost of living, are there plans to examine their fixed pensions with a view to increasing them in line with the prevailing cost-of-living issues?

Michael McGrath (Cork South Central, Fianna Fail)
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I am acutely aware of the increases in inflation in recent months and the challenges faced by households, particularly in terms of energy costs. That is why a package of measures was announced by the Government this year dealing with the energy costs challenges faced by households.

The Deputy has raised the specific issue of pension increases. As he may be aware, the most recent guidance and instructions on this matter for most retired public servants is outlined in Department of Public Expenditure and Reform circular 10/2021, which is available on the gov.iewebsite. Under the existing policy, pay increases under Building Momentum — A New Public Service Agreement 2021-2022 will be passed on to those pensions awarded under the pre-existing public service schemes where the salary on which a pension is based does not exceed the salary of serving staff at the same grade and scale point after the pay increases have been applied.

In practice this means that the vast majority of retired members generally receive pension increases in line with the pay increases due to their peers in employment. The next increase of 1% is due in October under the current deal, which is the subject of renegotiation at the moment, as the Deputy knows.

The position is different with wider public sector pension issues involving retired members of pension schemes in the commercial semi-State bodies. In the first instance, consideration of discretionary pension increases is a matter for review by the key stakeholders such as the parent Department, the scheme trustees and the relevant employer, in relation to each pension scheme. The understandable desire of retired scheme members of these schemes for pension increases to deal with inflation challenges must be balanced with the overall protection of pension benefits for all members of such schemes and with the long-term survival of schemes, particularly given the historical financial challenges which these schemes have had to face. The position of each commercial semi-State body is a matter for the relevant sectoral Department with primary responsibility for each of the bodies.

Seán Canney (Galway East, Independent)
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I welcome the fact that pensions will be pegged to increases as they happen. When I talk to pensioners they say they feel they are forgotten because they took cuts under the austerity measures that were taken after the bust. These are people who worked for this State all of their lives and contributed enormously to it through taxation, building our economy and getting the State to where we are today as a good place to live and work in. It is important that we recognise that contribution and ensure that if people are on a fixed income, they are helped with the increases in prices. People who are in pensions see their health costs and all that goes with that increase. If they have a car, their insurance costs and all of that also increase. It is important that we recognise that in a fruitful way.

Michael McGrath (Cork South Central, Fianna Fail)
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In recent years, because we have been going through a process of unwinding the financial emergency measures in the public interest, FEMPI, there was an issue that impacted on a large number of public service workers. The salary of a serving public service employee had to reach the level of the salary which formed the basis of the pension for the pensioner who was in payment. Until these had begun to match each other, as they now have in the overwhelming majority of cases, a lot of pensioners were not getting increases because the reversal of the measures took a period of time. We are now at a point, having pretty much achieved full restoration of the position pre-FEMPI, that the salaries of the existing employees have reached or exceeded the salaries on which the pensions of the pensioners are based. From this point onwards, in general terms, any increases in public service pay in general rounds are passed on to the pensioner as well. There was a gap period because of FEMPI and the outworking of that but that has essentially washed through the system at this point.

Seán Canney (Galway East, Independent)
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I welcome what the Minister is saying and I know every effort is being made to help pensioners who worked in public service. I refer, however, to semi-State bodies like the ESB and others whose pensioners are really caught in a bind. It is important that we look at that and assist these people. The Minister says it is left to each line Department or entity to deal with the issue but there is a case for the Government to consider it and see what it can do. Coming up to the budget, I know there will be hundreds of demands but we must look after the people who looked after us and worked for the State in the 1950s, 1960s, 1970s and 1980s. We must make sure they have an income that will match the cost of living and allow them to live comfortably. It is our duty to do that.

Michael McGrath (Cork South Central, Fianna Fail)
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In the case of the commercial State bodies, what generally happens is an assessment is carried out by the line Department. It has to have regard to the scheme trustees and make sure the benefits are protected for all the members. It will then make a recommendation. In some instances, the recommendation will come to my Department for approval and sign-off. I make sure those issues are dealt with quickly. For example, a recommendation was recently made to the line Department that there be a 2% increase in the pension for former RTÉ employees. That made its way to the Department of Public Expenditure and Reform and I signed off on it. That is the process that is in place. One has the specific details of an individual scheme and one must recognise the role of trustees of the scheme, the fact that there are existing and future pensioners and the role of the line Department. My Department is at the end of that line and the matter comes to us when we have a full assessment of the situation and a recommendation that takes account of all of those factors.