Pat Deering (Carlow-Kilkenny, Fine Gael)
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Question 80: To ask the Minister for Public Expenditure and Reform the formula used in determining politicians pensions; and when and by whom this formula was drawn up. [7150/12]

Brendan Howlin (Wexford, Labour)
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The superannuation benefits of Members of the Houses of the Oireachtas are provided under 2 separate pension schemes – one provides benefits in respect of membership of the Oireachtas only (i.e. in respect of service as a TD and/or Senator); the other provides benefits in respect of service as an Officeholder (e.g. Minister, Minister of State, etc.). The basic terms of the schemes are as follows.

Oireachtas scheme

The original pension benefits in respect of membership of the Oireachtas are derived from the Oireachtas (Allowances to Members) Act 1938. The terms have been amended over the years, most notably in 1992 which led to the current pension provisions for Members, known as the New Scheme. The vast majority of the current members of the Oireachtas are members of this scheme. The scheme provides for termination and pension payments subject to certain conditions.

A former Member who has served for a continuous period of at least 6 months up to the time s/he leaves the Oireachtas is entitled to termination payments, details of which are available from the 'One-Stop-Shop' in Leinster House.

A former Member who has at least 2 years' reckonable service will be entitled to a pension and lump sum from age 50 at the earliest, although the option exists to take a reduced pension from an earlier age. Under the scheme, maximum superannuation benefits are accrued after 7,300 days (20 years) service. The pension is effectively calculated on the basis of 1/40th of salary per year of service (max. pension = half annual salary). The lump sum payable is 3 times the annual pension (max. lump sum = 1.5 times annual salary). The pension and lump sum are payable at age 50 or at a later age should the Member continue his/her membership of the Oireachtas beyond that age. However, pension and lump sum are not payable to 'new entrant' members of the Oireachtas as defined in the Public Service Superannuation (Miscellaneous Provisions) Act 2004 until age 65 (i.e. for those who are newly elected since 1 April 2004).

Officeholders' Scheme

The original superannuation benefits of Ministers, Ministers of State and other Officeholders derive from the Ministerial and Parliamentary Offices Act 1938. The provisions of the Act were expanded and modified over many years by a number of amending Acts, most notably the Oireachtas (Allowances to Members) and Ministerial and Parliamentary Offices (Amendment) Act 1992, the provisions of which came into force on 12 January 1993.

The offices which qualify for pension benefits fall into 2 categories, viz.,

(a) the offices of Taoiseach, Tánaiste, Minister, Attorney General and Ceann Comhairle (these are designated as "Ministerial offices" for pension purposes);

(b) the offices of Minister of State, Leas Cheann Comhairle, Cathaoirleach, Leas-Chathaoirleach and Leader of Seanad Éireann (these are designated as "Secretarial offices" for pension purposes).

Among the qualifying terms of the Officeholders' Scheme is a minimum of 2 years' service in a qualifying office. Also, pensions are payable from age 50. However, pensions for 'new entrant' Members of the Oireachtas as defined in the Public Service Superannuation (Miscellaneous Provisions) Act 2004 are not payable until age 65. Pensions are not payable to former Officeholders while still a member of the Oireachtas. There is no lump sum under the scheme.

The 1992 Act also introduced a new scheme of severance allowances for persons ceasing to hold Office on or after 12 January 1993. Entitlement to a severance allowance commences on the day after the individual ceases to hold Office, and the allowance is payable for a period equal to the period during which the person has been continuously in Office (i.e. without any break in service) prior to such cesser, subject to a limit of 2 years. A severance allowance and an Officeholder's pension may not be paid simultaneously.

It should be noted in relation to both the Oireachtas Members' and Officeholder's schemes that the Public Service Pensions (Single Scheme) Bill, which is before the Dáil at present, will introduce a new Single Public Service Pension Scheme with a minimum pension age of 66, rising in due course to 67 and 68. This will apply to all new Members of the Oireachtas, including Ministers, as defined in the Bill.

Pat Deering (Carlow-Kilkenny, Fine Gael)
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Question 81: To ask the Minister for Public Expenditure and Reform the way senior civil servants gratuity is determined; and if they pay AVCs. [7151/12]

Brendan Howlin (Wexford, Labour)
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The superannuation benefits of civil servants are paid in accordance with the relevant superannuation legislation and circulars. Included in these benefits is the provision of a lump sum on retirement. Retirement lump sum is calculated on the basis of 3/80ths of final pay for each year of service, subject to a maximum of 1 1⁄2 times pay. As the Deputy will be aware, in furtherance of the long-term affordability of public service pensions, the Government, by way of the Public Service Pensions (Single Scheme) and Remuneration Bill 2011 (which is currently before the Dáil), is proposing to introduce a new "Single Public Service Pension Scheme" for future new recruits to the public service. The new scheme will have a "career-average" design, pension increases will be linked to CPI and a higher pension age will apply (linked, in future, to the State pension age). The lump sum payment will be accrued at a rate of 3.75% of the scheme member's pay over the course of a career, subject to a maximum of one and one-half times pay. The new arrangement is expected to yield considerable long-term savings to the Exchequer in terms of the cost of public service pensions.

As regards Additional Voluntary Contributions (AVCs), they are private arrangements between an employee and a private insurance company. They are available to civil or public servants. The Deputy might note that there are also Public Service schemes to allow public servants to purchase notional added years to increase their pension benefits on retirement.