Noel Grealish (Galway West, Independent)
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229. To ask the Minister for Public Expenditure and Reform if the cuts to pensions of retired public servants under FEMPI can be restored before 2021 (details supplied); if he will reassure retired public servants that parity between retirees and serving public servants will be maintained; and if he will make a statement on the matter. [35237/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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The particular measure which has cut certain public service pensions under the financial emergency legislation is the Public Service Pension Reduction (PSPR). Introduced in 2011 under the Financial Emergency Measures in the Public Interest Act 2010, PSPR reduces the value of those public service pensions which have pre-PSPR values above specified thresholds. It does so in a progressively structured way which has a proportionately greater effect on higher value pensions.

A very significant part-unwinding of 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.

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.

Section 6.2 of the proposed Public Service Stability Agreement 2018-2020, which if ratified, will be an extension of the Lansdowne Road Agreement, indicates that over the duration of that agreement, 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.

This means that over the period of the agreement, if ratified, public service pensions in payment will increase in line with pay increases where necessary to ensure that those pensions are equal to the pensions being awarded to same-grade retiring staff.