Seán Fleming (Laois-Offaly, Fianna Fail)
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Question 203: To ask the Minister for Finance in view of the savings of €289 million in the sustainable pay bill under the Public Service Agreement 2010 to 2014, if he will provide an estimate of the costs of the severance payments and additional annual pension costs that will accrue to the taxpayer in respect of those persons who have left the service; and if he will make a statement on the matter. [18990/11]

Michael Noonan (Limerick City, Fine Gael)
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The Implementation Body for the Public Service Agreement 2010 - 2014 published its first progress report on 15th June last. The body found that, over the 12 months to end March 2011, sustainable Exchequer pay bill savings in the order of €289 million had been achieved, driven primarily by a reduction in public service staff numbers of 5,349 over the period. Public service pension costs have increased over the period. However, this is not a direct function of or causally linked to 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. It should be noted that any voluntary early retirement scheme incurs up-front once-off costs while the savings remain sustainable into the future.

As regards the payments to those who left under the most recent exit mechanisms, i.e. the HSE scheme and the Incentivised Scheme of Early Retirement (ISER), the total amounts paid out in terms of lump sum and severance, including statutory redundancy, was of the order of €106 million. The associated ongoing annual pension cost is of the order of €46 million. Increased pension costs associated with the schemes decline over time as early retirees reach the age at which they would have retired in any event. In addition, some of those who retired under these schemes did so outside the relevant period within which the Croke Park agreement was in operation, i.e. before March 2010.