Patrick O'Donovan (Limerick, Fine Gael)
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Question 271: To ask the Minister for Public Expenditure and Reform further to Parliamentary Question No. 254 of 14 September 2011, if he proposes any pension or gratuity changes in the Civil Service at the levels of Ssecretary General, assistant secretary general, principal officer and assistant principal officer; and if he will make a statement on the matter. [26904/11]

Brendan Howlin (Wexford, Labour)
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The current superannuation scheme provisions for established civil servants, including the grades of Secretary General, Assistant Secretary, Principal, and Assistant Principal, are uniform across the Civil Service, and full details of this scheme are set out at the Government website www.cspensions.gov.ie.

As the Deputy will be aware, the Single Public Service Pension Scheme, the bill for which has been published by the Government, includes the provisions set out below. These will apply after commencement of the legislation to new recruits to the Civil/Public Service, and to those who are not existing civil/public servants within 6 months of taking up their employment: a. Raises the minimum public service pension age - it is proposed this be increased initially to 66 to bring it into line and link it henceforth with the social welfare state pension age, rising on a phased basis to 67 and 68; b. sets a maximum retirement age of 70 – at present for most new entrants to the public service, there is no maximum retirement age; and c. move to the calculation of pensions on the basis of "career average" earnings rather than final salary.

The introduction of a career average rather than a final salary system is fairer and more equitable than a final salary system in that it affects the pension paid to those who have high earnings especially in late career [for example, a person promoted to top management later in their career] more than those who may have a relatively 'flat' career progression [for example, nurses, teachers].

There are special provisions for Secretaries General, whose terms of appointment included the Top-level Appointments Committee exit terms. These terms are currently being reviewed by the Government.

It should be noted that public service remuneration has been reduced which will affect pensions of those retiring after February 2012. The salary of a Level-1 Secretary General has been reduced from €285,000 to €214,000, which has significant implications for retirees after February 2012. Secretaries General have also taken a voluntary reduction of €14,000, which does not affect pension. Those who retire before end-February 2012 will have their pensions reduced by the Public Service Pension Reduction, which in the case of a Secretary General is about 10%.

Lump sums above €200,000 are now being taxed.

There is an additional tax applied to those whose capitalised pension benefits exceed a threshold of €2.3 million, except for those who qualify for a Personal Fund Threshold in excess of their total pension benefits.