Willie Penrose (Westmeath, Labour)
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Question 271: To ask the Minister for Defence if, in the context of resources available to him, he will consider awarding the military service allowance to military personnel who retired before 1 August 1990 and which was considered by the report of the Gleeson Commission on remuneration and conditions of service in the Defence Forces; if he will confirm that the number of personnel involved are declining on an annual basis and, therefore, the payment of same would not constitute a significant financial burden on the Exchequer; and if he will make a statement on the matter. [39860/06]

Willie O'Dea (Limerick East, Fianna Fail)
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Arising from a recommendation made in 1990 by the Commission on Remuneration and Conditions of Service in the Defence Forces (the Gleeson Commission), Military Service Allowance (MSA) was made pensionable in the case of personnel retiring on or after 1 August 1990. As I have previously indicated to the House, this approach was fully consistent with settled public service pensions policy which provides that the benefit of an allowance being made pensionable for serving personnel does not extend to existing pensioners.

More recently, the Final Report of the Commission on Public Service Pensions, which was published in January 2001, was considered and broadly accepted by Government. The Commission's Report was the first comprehensive examination of public service occupational pension arrangements since the foundation of the State. The Commission was an independent body and had invited submissions from interested parties through advertisements in the national press in September 1996, giving those concerned an unprecedented opportunity to put their case on occupational pension issues. I understand that groups representative of military pensioners were among those who made submissions and were met by the Commission.

In its Report, the Commission specifically addressed the issue of the pensionability of allowances (including the MSA) and the consequences for public service pensioners generally. However, having considered the arguments advanced by the groups affected, together with longstanding public service pensions policy in that context and the substantial cost implications involved, the Commission did not recommend any increase for the pensioners concerned. Aside from pre-August 1990 Defence Forces pensioners, the other groups affected include certain retired members of An Garda Síochána and the Prison Service and retired teachers. In the context of the Government's subsequent consideration of the Commission's Report, no change in existing policy on this matter has been authorised or is contemplated.

At present, there are 9,727 persons in receipt of pensions under the Defence Forces Pensions Schemes (including some 1,440 spouses of deceased personnel). About 3,630 of these are pre-August 1990 pensioners who do not qualify for the MSA in their pension. The direct cost to my Department of extending the benefit of MSA to them is currently estimated at €6.85 million a year. While the number of pensioners affected is slowly falling each year — the corresponding figure this time last year was about 3,770 — the cost involved remains significant.

However, the position of these Defence Forces pensioners cannot be looked at in isolation and the question of cost implications for the wider public service must be considered. In this regard, the Pensions Commission indicated in its Final Report that it had obtained actuarial advice on the impact of making certain allowances (including MSA) pensionable in the specific case of Garda and Defence Forces' pensioners for future pension payments only. The Commission was advised that, at 1997 costs, this would result in an immediate increase in expenditure of €11.4 million a year and that the accrued liabilities of the State would increase by €147.3 million if this change were implemented for both groups. The reality therefore is that any departure from established pensions policy for one group would give rise to significant cost repercussions in other areas of the public service. Accordingly, there is no scope for departing from settled public service pensions policy in the case of MSA.