David Cullinane (Waterford, Sinn Fein)
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202. To ask the Minister for Public Expenditure and Reform the amount deducted from those persons in receipt of a public sector pension, under the Financial Emergency Measures in the Public Interest, FEMPI, Acts from 2009 onwards in terms of those in receipt of a pension pre-2010, and those in receipt of a pension post-2010; the cost of restoring public sector pensions to pre-FEMPI levels; and if he will make a statement on the matter. [17811/16]

Paschal Donohoe (Dublin Central, Fine Gael)
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Public service pensions affected by the Public Service Pension Reduction (PSPR) are simply reduced in pay-out value: as such no deduction, levy or other stoppage arises. 

There is no special or mutually distinguishing difference between pre-2010 and post-2010 pensions in terms of PSPR impact. However, such a difference does exist in respect of pensions awarded to persons retiring before and after the end of February 2012.

Pensions awarded in respect of retirements up to end-February 2012 benefit from the "grace period" instituted under the Financial Emergency Measures in the Public Interest (No. 2) Act 2009. This means that such pensions are based on higher final salaries, that is to say salaries which do not reflect the pay cuts of 1 January 2010 under that Act.

By contrast, pensions awarded to post-February 2012 retirees do not benefit from that "grace period", being based on lower final salaries which factor in the 2010 pay cuts. This means such pensions are lower, on a like-for-like basis, than earlier awarded pensions and on that account are subject to a lighter, less impactful, PSPR regime, featuring higher exemption thresholds and lower percentage reduction rates. In fact the majority of post-February 2012 pensions have never been affected by the PSPR, due to the fact that an exemption threshold of €32,500 has applied since 1 July 2013.

My answer to PQ 17210/16 on 21 June 2016 gives a breakdown of the PSPR effects on a sample of public service pensions in 2015, 2016, 2017 and 2018. Table A of that breakdown covers pensions awarded up to the end of February 2012, while Table B covers pensions awarded from 1 March 2012. 

The 2015 figures in those tables reflect the PSPR rates position legislated with effect from 1 July 2013 under the Financial Emergency Measures in the Public Interest Act 2013, while the 2016, 2017 and 2018 figures in the tables reflect the significant part-restoration of the PSPR cuts now underway under the terms of the Financial Emergency Measures in the Public Interest Act 2015. Earlier (pre-July 2013) PSPR rates are set out in my Department's Circular 18/2015: Changes to the Public Service Pension Reduction (PSPR).

Based on available data, reasonable assumptions about future retirements and mortality rates, and the programmed restoration steps under FEMPI 2015, the estimated savings in public service pension costs delivered by PSPR over the years 2011 to 2018 are as follows; €100 million in 2011, €100 million in 2012, €120 million in 2013, €140 million in 2014, €135 million in 2015, €105 million in 2016, €75 million in 2017 and €45 million in 2018. 

These figures indicate that, by comparison with the savings attributable to PSPR in 2015, the estimated full-year cost of abolishing PSPR is €135 million.