Alan Dillon (Mayo, Fine Gael) | Oireachtas source

I thank Senator Byrne for raising this important matter. I am taking this on behalf of the Minister, Deputy Donohoe who has responsibility for public expenditure and I will bring back the Senator’s concerns.

Defined-benefit public service pension schemes for fully-insured employees paying class A PRSI are integrated with their social welfare entitlements which means that the overall pension package within these schemes has both an occupational pension benefit and a social welfare benefit component. On retirement, the combination of occupational pension and social welfare benefit equate to the total package payable under the design of the integrated scheme.

Pensioners who were members of integrated pension schemes will receive a benefit from any increases in State pension rates that may occur post-retirement, since they then receive the higher rate of social welfare in addition to their occupational pension. As well as benefiting from social welfare increases, public service pensioners also benefit from wage-indexation of their occupational pensions under the current public service pay deal, whereby increases in public service wages are passed on to public service pensions.

Non-integrated public service pension scheme members are generally those employed before 1995 who paid modified PRSI rate contributions that are not reckonable for a full standard contributory State pension, so changes to social welfare rates do not affect their pensions in the same way.