Clare Daly (Dublin North, Socialist Party)
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96. To ask the Minister for Social Protection further to Parliamentary Question No. 125 of 28 January 2014, if a pensionable service tapered table dealing with service and recognising different contributions will be implemented in calculating pension benefits; and if she will acknowledge that this would not constitute age discrimination as applying different criteria to different age groups has been found to be justified. [5870/14]

Joan Burton (Dublin West, Labour)
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The principle underlying a service tapered approach would be that those who have contributed for longest should get the most out of the scheme in the event of the wind up of scheme. As I indicated in my previous response, this was one of the many options considered during the deliberation phase which preceded the publication of the Social Welfare and Pension (No. 2) Bill 2013. It was acknowledged at that time that the present approach to the calculation of pension benefits essentially adopts a service based approach to the calculation of such benefits.

For example, consider two members of a scheme, one with 30 years’ service completed and one with 15 years’ service completed. Assume the pension formula is 1/60th of pensionable salary per year of service, both have the same pensionable salary of €30,000 and both are aged 55. The accrued pension of the first member is 30/60th of €30,000, which is €15,000. The accrued pension of the second member is half this amount, which is €7,500.

Overlaying a service related scale could be regarded as overweighting the priority order in favour of service and in this regard may be considered inequitable. A further potential drawback identified in relation to a service related scale was it may suffer from practical implementation difficulties due to data issues in respect of former employees, especially those who left many years ago. I am satisfied that the approach adopted in the legislation is the most appropriate and fulfils the objectives of ensuring that service in the scheme is fully recognised.