Michael McGrath (Cork South Central, Fianna Fail)
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Question 60: To ask the Minister for Finance if he will provide details of the expected increase in the annual public sector pension bill and the once-off lump sum payments attributable to the persons who account for the €289 million saving in the public sector pay bill arising from the Croke Park Agreement; and if he will therefore confirm the net saving to the State from such persons leaving the public service. [16937/11]

Michael Noonan (Limerick City, Fine Gael)
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Under current standard terms of employment, public servants generally can earn a pension of up to half their final salary and a lump sum of up to one and one half times that salary depending on years served. The precise calculations of the amount involved as sought by the Deputy are not available to me at this time. However, the relevance of this to the estimated sum of €289 million in sustainable pay savings referred to in the question is not clear and for the following reasons. The Croke Park Agreement relates to pay savings. In that context, as pension costs will arise in any event for public service employees it is considered that the estimate of sustainable pay bill savings in the order of €289m is a reasonable reflection of pay savings arising from the Croke Park Agreement. This saving has been driven primarily by not filling vacancies arising from a reduction in staff numbers of 5,349 during the period but also other factors such as reductions in overtime costs, which are down by 5.2%, and reformed work practices and rationalisation.

Public service pension costs have increased over the period. However, this is not a direct function of the Croke Park Agreement but, rather, represents costs which would arise in any event. The cost increase is not due to the Croke Park Agreement but is essentially caused by increased longevity (i.e. fewer pensioners dying) and more people retiring normally.

The Body's report, correctly, foot-noted the pension increase over the period but, equally correctly, did not seek to relate it to the Croke Park reform process. The Body's Report also footnotes the costs associated with the voluntary early retirement and redundancy schemes which were offered in the HSE last year, with one-off costs of €99m for lump sums and statutory redundancy paid in 2010. It should be noted that any voluntary early retirement scheme incurs up-front once-off costs while the savings remain sustainable into the future.