Peadar Tóibín (Meath West, Sinn Fein)
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Question 78: To ask the Minister for Public Expenditure and Reform the measures he intends to take to end the pay, pension and abatement arrangements for current Secretaries General. [3795/12]

Brendan Howlin (Wexford, Labour)
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Pay and superannuation terms for Secretaries General and County Managers are in line with their contractual arrangements. The Deputy will be aware that a number of significant steps have been taken to reduce costs which will make a significant contribution to the national effort to restore the public finances to a sustainable path. Among the pay measures introduced and impacting on the Public Service are:

· The general pay increases provided for under Towards 2016 Review and Transitional Agreement 2008-2009 were not paid;

· A pension related deduction of an average of nearly 7% was applied to all the earnings (including non pensionable earnings) of public servants with effect from 1 March 2009;

· A reduction in rates of pay and allowances ranging from 5% to 20% took effect on 1 January, 2010

· The Public Service (Croke Park) Agreement provides for an effective pay freeze up to 2014.

· The salary scales for new entrants to traditional recruitment grades across the public service with effect from 1st January 2011 were reduced by 10%.

· More recently the Government has put in place general pay ceilings for Senior Public Service posts (€200,000) and for CEOs of Commercial State Companies (€250,000).

The measures taken by the Government reflect its determined view that in the light of the ongoing severe economic conditions facing the country a strong policy of pay restraint within the public sector is necessary, including the application of general pay caps where appropriate. These and other measures to reduce pay costs will have brought about a reduction in the pay bill to less than €14.795 billion in 2011 which represents a reduction of some 15.5% on the 2009 figure.

Following a review of Higher Grade salary rates in the Public Service including Secretary General and related grades the Government agreed in June 2011 with my proposal to the introduction of a general pay ceiling of €200,000 for future appointments to higher positions across the public service. Following adoption of the pay ceiling those Secretaries General who were in receipt of salaries in excess of the pay ceiling voluntarily waived that portion of their salary in excess of the pay ceiling while the issue did not arise for County Managers. Revised rates for future appointees to Secretary General posts were implemented in accordance with the pay ceiling and I have no further plans to review the salaries of these grades at this time.

A number of pension-related measures have been implemented. The Public Service Pension Reduction (PSPR) was introduced in January 2011. The pay reductions introduced since 2010 will impact on pension benefits for those retiring after the end of the 'grace period', i.e. from March 2012 onwards. Those retiring on pension before that date are subject to the PSPR. I have recently provided for an increase in the rate of PSPR that applies to pensions over €100,000 from 12% to 20% which will affect secretaries general on pensions above that level.

In relation to the secretaries general of Departments, the Government introduced a new regime to apply to them on completion of their term of office. Newly appointed secretaries general, unless they have already reached pension age, will no longer benefit from immediate payment of pension and lump sum before they reach their preserved pension age; nor will secretaries general benefit from notional added years for pension purposes. These are significant changes compared to the exit terms that applied to those previously appointed.

Finally, it is important to point out that the Government's new Bill to provide for a Single Public Service Pension Scheme is currently before the Oireachtas and will be implemented this year. It will provide for pension to be based on career average earnings, as opposed to the current system of pension based on final salary. This and other provisions in the Bill will eventually deliver a saving of over a third in the Exchequer Public Service pension bill.