Written answers

Wednesday, 6 April 2016

Department of Public Expenditure and Reform

Public Sector Pensions Data

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Social Democrats)
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187. To ask the Minister for Public Expenditure and Reform his plans in respect of the restoration of pension cuts to retired public servants; and the timescale proposed for this. [6268/16]

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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In June 2015 Government agreed to my proposals for a significant phased restoration of most of the cuts affecting public service pensions due to the Public Service Pension Reduction (PSPR). These proposals reflected my commitment to restore the pensions of retired public servants as early as economic and fiscal progress allowed. 

These PSPR ameliorative proposals were legislated in late 2015 under the Financial Emergency Measures in the Public Interest (FEMPI) 2015 Act, with changes occurring in three stages, on 1 January 2016, 1 January 2017 and 1 January 2018.

On 1 January 2016, increases in the annual pension thresholds before PSPR applies were activated. These exemption threshold increases remove PSPR entirely from a significant number of pensions with relatively lower values, while those pensions which continue to be impacted by PSPR receive a boost of €400 per year.

On 1 January 2017, additional PSPR amelioration, acting principally via further exemption threshold increases, will fully remove PSPR from another significant tranche of public service pensions, while at the same time boosting those pensions which remain affected by PSPR by €500 per year.

On 1 January 2018, the third stage of PSPR amelioration will ensure that all PSPR-impacted pensions with values up to €34,132 will be fully restored, meaning that PSPR will not longer affect such pensions, while those pensions which continue to be impacted by PSPR will get a boost of, in most cases, €780 per year.

These legislated PSPR ameliorative measures, which are in the process of being implemented, constitute a fair and sound basis on which, with the restricted resources available to Government, public service pensions may benefit from significant restoration, with those on lower PSPR-impacted pensions benefitting to a greater extent. The extent of the legislated restoration, when fully in place from 2018, is substantial, carrying an annual cost estimated at €90 million, and ensuring that only the top 20% higher value public service pensions will continue to be impacted by the PSPR.

Under section 12 of the FEMPI Act 2013, the Minister for Public Expenditure and Reform is required to review the necessity of the FEMPI legislation annually and cause a written report of his or her findings to be laid before each House of the Oireachtas. In that context, I believe that economic progress and fiscal consolidation in the years ahead will determine the scope and timing of the possible further scale-back or elimination of the financial emergency measures, including the PSPR.

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