Joanna Tuffy (Dublin Mid West, Labour)
Link to this: Individually | In context | Oireachtas source

To ask the Minister for Public Expenditure and Reform if he will provide details of the pension scheme in place for current Oireachtas members; the amount of contributions deducted from Members salaries for the scheme; the situation in relation to pension entitlements for former Oireachtas members who may, in the future, be re-elected to Dáil Éireann and who have built up pension benefits under the older pension scheme (details supplied); and if he will make a statement on the matter. [1273/13]

Brendan Howlin (Wexford, Labour)
Link to this: Individually | In context | Oireachtas source

The original pension terms in respect of membership of the Houses of the Oireachtas are derived from the Oireachtas (Allowances to Members) Act 1938. While the terms were amended over the years, the most notable amendments took place in 1992 and these form the basis of the pension provisions - known generally as the "New Scheme" - applicable to the majority of current Oireachtas Members. Further amendments to the terms were made for certain 'new entrant' Members as defined under the Public Service Superannuation (Miscellaneous Provisions) Act 2004. More recently, the Public Service Pensions (Single Scheme and Other Provisions) Act 2012 introduced a new Single Public Service Pension Scheme which applies to new Public Servants taking up appointment on or after 1 January 2013, including Members of the Oireachtas.

The pension terms of the "New Scheme" provide that a former Member who has at least 2 years’ reckonable service is entitled to a pension and lump sum from age 50 at the earliest (with an option to take a reduced pension from an earlier age), except for those who are 'new entrants' under the 2004 Act to whom pension and lump sum are not payable until age 65 (i.e. those who are newly elected since 1 April 2004). Under the scheme, a contribution rate of 6% of salary applies and maximum superannuation benefits accrue after 7,300 days' (20 years') service. A person who accrues the maximum 20 years' service is entitled to a once-off lump of 1.5 times annual salary and to a pension of one half of annual salary.

As mentioned above, the Public Service Pensions (Single Scheme and Other Provisions) Act 2012 introduced a new Single Public Service Pension Scheme which commenced on 1 January of this year. The Single Scheme provides that new Public Servants appointed on or after that date, including Members of the Oireachtas, will be members of the Scheme and will have their pension benefits based on career average earnings as opposed to the current final salary basis. The Scheme also provides for a new minimum pension age of 66, rising to age 67 in 2021 and age 68 in 2028 in line with changes to the age at which the State Pension (Contributory) will become payable. A contribution rate of 13% of salary will apply to Members of the Oireachtas who are members of the Single Scheme.

When considering the application of the Single Scheme to Members of the Oireachtas, the Government decided to legislate on the basis that the Scheme should apply only to future first-time Members. In adopting this position, the Government took account in particular of the fact that, unlike most Public Servants, Oireachtas Members do not have security of tenure but are subject to the will of the electorate, and recognised that this requirement to be re-elected from time to time differentiates Members of the Oireachtas from the general body of Public Servants. In this context, it was decided that a Member who was first elected or appointed to the Oireachtas before the commencement date of the Single Scheme (1 January 2013) will not be a member of that scheme in respect of any future service as an Oireachtas Member; whereas Members who are elected for the first time after 1 January 2013 will be members of the Single Scheme and subject to its terms.

This approach is considered reasonable as those who, in future, consider putting themselves forward for election to the Oireachtas for the first time will be fully aware of the new Single Scheme terms and can take this into account when making their decision.