Richard Bruton (Dublin North Central, Fine Gael)
Link to this: Individually | In context

Question 48: To ask the Tánaiste and Minister for Finance if Army officers are eligible to pay AVC's or pay into PRSA's; the reason these options do not apply; and when he expects to introduce the SPEARS system. [31810/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

There is an approved AVC scheme in place for enlisted personnel of the Permanent Defence Force (PDF) which is restricted to death in service benefit. There is no AVC scheme in place for Commissioned Army Officers. It would be a matter for the Revenue Commissioners to consider any application for an AVC scheme if one was submitted to them for approval. In this regard, it would be open to the Defence Forces Representative Associations to pursue approval for an AVC scheme for their members with the Revenue Commissioners. It might be noted that the relevant provisions of the Taxes Consolidation Act 1997 preclude Revenue from approving any such scheme that allows payment of benefits prior to age 50. As regards PRSAs, it would be open to any individual member of the PDF, in consultation with a PRSA provider, to determine if they would be entitled to contribute to a PRSA. In this regard, the restriction relating to payment of benefits prior to age 50 would also be a factor.

Under existing occupational pension arrangements applying to personnel recruited prior to April 2004, members of the PDF are eligible for the immediate payment of superannuation benefits regardless of age and after relatively short periods of service. Immediate pension and gratuity is payable after a minimum of 12 years' service to Commissioned Officers and after 21 years to enlisted personnel, potentially well before age 50 in either case. There is no provision for the preservation of benefits.

The Public Service Superannuation (Miscellaneous Provisions) Act 2004 provides for the making of a new occupational pension scheme to apply to military personnel recruited as new entrants to the Permanent Defence Force on or after 1 April 2004. As provided for in that Act, there will be a minimum pension age of 50 for all new entrant personnel. This means that pensions and gratuities will not ordinarily be payable immediately on discharge/retirement except in the case of personnel who serve to age 50 years, while preservation of benefits will apply otherwise. The new scheme will bring Defence Forces pension arrangements more into line with public service pension schemes generally. In that regard, it is envisaged that in common with other public service schemes, the new military scheme will include appropriate provision for the purchase of notional service at full actuarial cost to the individual. I am advised that discussions between the Management Side and the Defence Forces Representative Associations about the detailed terms of the new pension scheme, and certain improvements in existing pension terms, are nearing conclusion.

As regards SPEARS, the Commission on Public Service Pensions recommended that SPEARS (AVC or group-PRSA arrangement) should be introduced, while at the same time, it also recommended that existing schemes for the purchase of notional service should be phased out. As agreed by the Government in September 2004, SPEARS was to be the subject of further consideration. In this regard, the Staff Side has been consulted and any decision in relation to SPEARS will have to await the outcome of such consultations. I am not in a position to indicate when this process will be completed.