Tuesday, 11 July 2017
Department of Public Expenditure and Reform
Public Sector Pensions
187. To ask the Minister for Public Expenditure and Reform further to Parliamentary Question No.188 of 17 May 2017, the considerations being given to retired public sector employees in the Lansdowne Road 2 talks; and if he will make a statement on the matter. [32402/17]
188. To ask the Minister for Public Expenditure and Reform further to Parliamentary Question No. 188 of 17 May 2017, when the public service pension reduction under FEMPI will be fully repealed and pensions reinstated; the measures his Department is taking in this regard; and if he will make a statement on the matter. [32403/17]
I propose to take Questions Nos. 187 and 188 together.
As I have previously indicated, a very significant part-unwinding of the Public Service Pension Reduction (PSPR) in three stages is taking place under the Financial Emergency Measures in the Public Interest Act 2015, with PSPR-affected pensioners getting pension increases via substantial restoration of the PSPR cuts on 1 January 2016, 1 January 2017 and 1 January 2018.
This three-stage part-unwinding of PSPR is delivering significant pensions increases to PSPR-affected pensioners. On 1 January 2016 all pensions of up to at least €18,700 became exempt from PSPR; from 1 January 2017, all pensions of up to at least €26,000 are now exempt from PSPR, and from 1 January 2018 all pensions of up to at least €34,132 per year will be exempt from PSPR. Those pensioners not fully removed from the reach of PSPR by dint of these changes will, in the majority of cases, benefit by €1,680 per year from 2018. The cost of these changes is estimated at about €90 million on a full-year basis from 2018.
In my annual review of the Financial Emergency Measures in the Public Interest legislation, which was laid before the Houses of the Oireachtas on 29 June 2017, I concluded that, having regard to the overall economic conditions in the State, the measures put in place under the FEMPI Acts, including PSPR, continue to be necessary.
In this review, I also noted that the proposed Public Service Stability Agreement 2018-2020 represents a sustainable further unwinding of the FEMPI legislation over the coming years.
In that context, section 6.2 of the proposed Public Service Stability Agreement 2018-2020, indicates that, over the duration of that agreement if ratified, policy on public service pensions in payment will be guided by the following three elements:
First, the need to adopt an equitable approach to the various public service pensioner cohorts differentiated by date of retirement (in particular pre and post end-February 2012) is affirmed.
Second, for those who retired or will retire post end-February 2012, to the extent that they retired on reduced salaries for pension award purposes, they will receive pension increases in line with pay increases received by their peers currently in employment in accordance with the terms of the collective agreement.
Third, when alignment is achieved between pre and post end-February 2012 pensioners, as will happen progressively for salary ranges up to €70,000 in 2020 under the proposed collective agreement, pay increases will continue to benefit pensions in payment for the duration of the agreement.