Lisa Chambers (Mayo, Fianna Fail)
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490. To ask the Taoiseach and Minister for Defence his plans to examine increasing the Army service pension; the last time that an increase was applied; and if he will make a statement on the matter. [33232/17]

Lisa Chambers (Mayo, Fianna Fail)
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501. To ask the Taoiseach and Minister for Defence his plans to increase the Army service pension; and the last time an increase was applied. [33230/17]

Paul Kehoe (Wexford, Fine Gael)
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I propose to take Questions Nos. 490 and 501 together.

The last occasion that public service pensions, including Defence Forces pensions, were increased was on 1st September 2008. Up until then, Defence Forces pensions were generally increased in line with, and from the same operative date as, relevant pay increases applied to serving military personnel. Such public service pension increases normally required the prior approval of the Minister for Finance/Public Expenditure and Reform. Since then, no increase in military pension rates has been authorised as there were no relevant pay increases for serving PDF personnel during that period. The same situation has applied across the public service. Instead, the Financial Emergency Measures in the Public Interest (FEMPI) Acts 2009 – 2013 reduced public service pay and pension rates.

I would refer the Deputy to the reply from the Minister for Public Expenditure and Reform to Question numbers 373 and 378 on 20 June 2017 on the question of public service pension increases.

In his reply, the Minister said that in the past, the occupational pensions of public service pensioners were generally adjusted in line with changes in the wages or salary of the pensioner's grade at retirement. Sometimes referred to as "pay parity", this non-statutory linkage lapsed in 2010, when the values of pensions in payment were left unchanged notwithstanding salary cuts at the beginning of 2010which affected all public servants under the financial emergency legislation.

Due to a grace period associated with the 2010 salary cuts, public servants who retired in the 26 months following those cuts, that is, in the period up to end-February 2012, had their pensions based on the higher‘ pre-cut’salary levels. This has led to the current situation whereby post February-2012 retirees, on a like-for-like basis, mostly receive lower pensions than their earlier-retired counterparts.

In addition, since the beginning of 2011 a progressively structured "Public Service Pension Reduction" (PSPR) has decreased the rates of public service pensions above specified thresholds. A significant part-reversal or unwinding of PSPR is under way as set out in the Financial Emergency Measures in the Public Interest Act 2015.

The Minister in his reply on 20 June 2017 went on to say that the lapsing of pay parity along with the pension differential arising between pre and post-2012 retirees, have created the conditions under which – as we move beyond "FEMPI" legislation and the progressive removal of the Public Service Pension Reduction (PSPR) towardsmore normal pay and pension setting conditions in the public service – theissue of how to adjust the post-award value of public service pensions, through appropriate pay or other linkages has required consideration.

In this context, the Minister referred to Section 6.2 of the proposed Public Service Stability Agreement 2018-2020 – published last month – which 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 after 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 collectiveagreement, pay increases will continue to benefit pensions in payment for the duration of the agreement.

Finally, a s regards the progressive removal of the Public Service Pension Reduction (PSPR) from pensions in payment, this is happening in three stages over the period 2016 to 2018. When complete on 1 January 2018, it will mean that most public service pensioners are not affected by PSPR. I understand that by virtue of the 2016/2017 changes, about 90% of military pensioners are not impacted by the PSPR at all.