Catherine Murphy (Kildare North, Independent)
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Question 49: To ask the Minister for Health if he will outline the expected total numbers of staff retirements from the Health Service Executive in 2012; if he will outline the expected cost to the HSE budget for all expected retirements, including pension lump sum entitlements; the expected impact this sum will have on the funding of HSE services in 2012; and if he will make a statement on the matter. [16441/12]

John McGuinness (Carlow-Kilkenny, Fianna Fail)
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Question 65: To ask the Minister for Health if he will ask the Health Service Executive to redraft its service plans for this year in view of the higher than expected number of early retirements; and if he will make a statement on the matter. [16482/12]

James Reilly (Dublin North, Fine Gael)
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I propose to take Questions Nos. 49 and 65 together.

The HSE National Service Plan 2012 acknowledged that there will be an inevitable and unavoidable reduction in services this year because of the scale of the financial and staffing challenges facing the health service. Considerable work was undertaken by my Department and the HSE in recent months to manage and plan for the impact of retirements from the health sector in the lead-up to the end of the 'grace period' on 29 February last. Within the HSE, contingency plans were developed locally for both hospital and community services, reflecting risk assessments undertaken by each hospital/community manager.

In the period September 2011 to February 2012 approximately 4,500 members of staff retired from the health service. My Department continues to work closely with the HSE to ensure that the contingency plans are operating satisfactorily and that all critical front-line services continue to be delivered. The Government's priority is to reform how health services are delivered, in order to ensure a more productive and cost effective health system. It is necessary to be as innovative and flexible as possible in order to mitigate the impact of reduced budgets and staffing and in this context, the National Service Plan is subject to continuous review.

The planning assumption used during the preparation of the HSE's 2012 National Service Plan was that the HSE would have to meet the costs associated with the retirement of about 3,500 people, or some 3,000 whole time equivalent staff. As outlined on page 4 of the Plan, the potential costs and savings involved were estimated as follows:

· an extra €44m for lump sums;

· an extra €68m for pensions;

· a loss of €18.9m in respect of superannuation contributions and the public service pension levy;

· a provision of €16m to fund the cost of replacing critical front-line service posts; and

· pay savings of €160m.

As mentioned above, the latest figures available from the HSE indicate that some 4,500 personnel retired between September 2011 and February 2012. Once the data on actual lump sums and pensions is available, the HSE will be in a position to run a new cost estimate associated with this level of retirements. It is possible that there may be a growth in costs although some of the lump sums will have already been paid in 2011. In addition, staff with premium pay or allowances, are entitled to reckon for pension purposes the 'best 3 years out of the last 10'. This requires 10 years payroll records to be examined for each person. In a recent sample of 413 retirees, 87% had premium pay or allowances. Accordingly, it may be some time before the HSE can accurately determine the full financial impact of the retirements.

It should also be noted that there may be further retirements during the year outside the "grace period" arrangements. There is no information available at present in relation to such potential retirements. The HSE is currently reviewing the impact of recent retirements on the financial and service delivery targets in its Service Plan and I understand a report on the matter is to be put before the Board at its next meeting.