Martin Mansergh (Tipperary South, Fianna Fail)

I fully subscribe to what Senator Norris stated on the importance of research. As it happens I am very familiar with the situation he describes as I have a daughter who is a research fellow at Trinity and is, of course, subject to the pension levy. However, I have not had representations on the pension levy from that source.

The Financial Emergency Measures in the Public Interest Act 2009 is one of a range of measures which have been implemented recently to address the current economic crisis, focusing in particular on the serious imbalance in the public finances. The grave Exchequer position, which we spent most of the day discussing, demands that exceptional and unpopular initiatives be brought forward in the national interest, and the Government has not been found wanting in acting accordingly. It is against this background that the new public service pension related deduction was included in the Act, which was recently debated and passed in this House.

Public servants enjoy significantly better pensions than most private sector workers. Public service pension benefits are higher and considered to be more secure than those of pensionable private sector workers, and their superiority has been highlighted by the severe losses in value sustained recently by pension funds generally.

I accept that the pension related deduction is a significant imposition and that in many cases it has not been a popular development for public servants and their families. The Government, however, is firmly of the view that it is a justifiable and proportionate measure at a time of great upheaval in the economy. Secure pensions are a very valuable asset in the current economic climate. The deduction asks that public servants, who enjoy pension security or who have an analogous arrangement, make a fair and reasonable contribution in recognition of this fact and help play their part in addressing both our immediate difficulties and the longer-term sustainability challenges facing the public service pensions.

Senator Norris expressed concern about the impact of the Act on the position of university research workers, in particular those in receipt, for example, of funds under the Health Research Board post-doctoral research fellowship scheme. In this connection the scope of the Act is clear in terms of the categories of person to whom the deduction applies. Section 2(1) of the Act provides that the deduction is to be made from public servants or persons who are members of a public service pension scheme, who are entitled to a benefit under such a scheme, or who have an entitlement to a payment in lieu of membership in such a scheme.

I am advised that in Trinity College Dublin, research workers, including research fellows are, as a condition of their appointment, enrolled as members of the college's defined benefit pension scheme and so are liable to the deduction under the Act. In accordance with the provisions of the Act and Department of Finance guidance notes, the view of the Trinity College authorities is that the pension related deduction is being correctly applied at source, that is to say it applies to any employee, temporary or permanent, who is a member of any college pension scheme or, where they are not a member of a college pension scheme for whatever reason, has confirmed on inquiry that they are otherwise in receipt of a benefit under another public service pension scheme or receive an additional payment in lieu of membership of such a scheme. On this basis I can confirm that the college is operating correctly within the terms of the Protection of Employees (Fixed-Term Work) Act 2003 and the Financial Emergency Measures in the Public Interest Act 2009.

More generally, a key point concerning funded research workers in our universities is that Ireland has moved to make them pensionable over recent times and has thus significantly improved the attractiveness of a research career in line with our national strategy. The value of this improvement in terms and conditions is a multiple of the cost of the employee pension contribution. It is also important to note that the nature or source of funding for university posts is not relevant in the application of the deduction. If the individual meets the criteria set out in section 2 of the Act, then the deduction applies.

The deduction is linked to the entitlement of an individual to a public service pension benefit or payment in lieu but I would point out that section 6 of the Act provides for a refund of the deduction in certain limited circumstances. Such a refund will arise in cases where, on leaving a public service job, an employee has no accrued benefit under any public service pension scheme, has not received a payment in lieu of pension scheme membership and has not transferred the service to another public service pension scheme.

Section 8 of the Act also provides for exemption from the deduction in exceptional circumstances when approved by the Minister for Finance. Specifically, where the Minister is satisfied that there is a particular class or group of public servants who, by reason of exceptional circumstances because of some particular aspect or condition of their employment which, in the Minister's opinion, materially distinguish them from other classes or groups of public servants to which section 2 applies, there is provision under section 8 of the Act for an exemption in whole or in part from deductions or to modify the obligation under section 2 of the Act in such a manner as the Minister for Finance sees fit, if the Minister considers it to be just and equitable in all the circumstances to do so.

It provides that this is for a class or group. The procedure to be followed is that the application be made by that class or group by stating the case in writing to the person who authorises the payment of remuneration to the class or group concerned. The application will be considered by the parent Department and the HEA in the case of bodies in the higher education area and following this consideration, the case will be submitted to the Minister for Finance for a final decision. It would be for a group of persons affected to make the application in writing.

It is also the case that college students or scholars on postgraduate studentship who receive a stipend are not entered into a college pension scheme. Scholarships consisting of a stipend of €16,000 and a fee grant of €8,000, by agreement with the Revenue Commissioners, are treated the same way and so are not subject to tax or PRSI. Scholarships are not considered to be remuneration under the 2009 Act, and those recipients are not members of the pension scheme so they are not subject to the deduction. The distinction must be made between research workers and people who are doing postgraduate research as the levy does not apply to the latter.