Mary Lou McDonald (Dublin Central, Sinn Fein)
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To ask the Minister for Public Expenditure and Reform his plans to reduce excessive pensions paid to former senior civil servants. [43487/12]

Brendan Howlin (Wexford, Labour)
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Several measures have been taken in recent years which serve to reduce pension awards and pensions in payment to retired public servants, including retired senior civil servants.

The pensions of former civil and public servants who retire or have retired from February 2012 onward are reduced in line with the substantial pay reductions applied under the Financial Emergency Measures in the Public Interest (FEMPI) Acts.

For public servants who retired up to the end of February 2012, the Public Service Pension Reduction (PSPR) applies. I provided for an increase in the rate of PSPR that applies to pensions in excess of €100,000 to 20% of the excess amount, effective from 1 January of this year.

In June 2011 the Government agreed with my proposal to apply a general pay ceiling of €200,000 for future appointments to higher posts across the public service. Revised salary rates in line with that ceiling are now in place for future Secretaries General, who, in addition, can no longer get notional added years or immediate pensions before preserved pension age. These retrenchments in respect of salary and exit terms will ultimately reduce Exchequer pension costs in respect of senior civil servants.

Looking further ahead, the recently enacted Public Service Pensions (Single Scheme and Other Provisions) Act 2012 provides for a new Single Public Service Pension Scheme. This scheme will apply to all new-joiner public servants and will ultimately deliver significant Exchequer savings through reduced public service pensions. These long-term savings will derive from key features of the Single Scheme, principally an increase in pension age, inflation linkage of benefits and career-average accrual. The career-average component of the Single Scheme, in particular, is expected to have a marked impact in moderating the pensions paid to persons retiring from senior civil service posts.

It is important to point out that legal advice from the Attorney General says that it is possible to apply proportionate reductions to existing pensions, as has been done to date in the FEMPI legislation. However, account must be taken of the fact that pension benefits are generally regarded as vested property rights, which must be considered in the public interest when taking action.