Michael McGrath (Cork South Central, Fianna Fail)
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186. To ask the Minister for Public Expenditure and Reform the benefits contained in the new public service pay agreement for existing public service pensioners; and if he will make a statement on the matter. [3018/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Public Service Stability Agreement (PSSA) 2018-2020, which was ratified by Government and by public service trade unions and representative associations, sets out the policy on public service pension increases adopted by Government for the duration of that agreement (to end-2020).

Specifically, section 6.2 of this agreement indicates that pension increases in the public service 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, in general, the pay increases awarded under the PSSA over the period 2018-2020 will be passed through to qualifying pensions in payment. Those public servants who have retired from 1 March 2012 (post-February 2012 retirees) will benefit from the pay increases awarded under the PSSA in nearly all cases. 

Public servants who retired before 1 March 2012 (pre-March 2012 retirees) will benefit from the pay increases under the PSSA only where the current equivalent salary (paid to serving staff) is above, or moves above, the salary on which that pension is based. 

In addition to this, the Public Service Pay and Pensions Act 2017 provides for the significant further lessening of the Public Service Pension Reduction (PSPR), occurring by way of threshold and rate changes to apply on 1 January 2019 and 1 January 2020. 

This scheduled further lessening of the PSPR impact on pensions will mean that from 1 January 2019 all pensions up to €39,000 per annum will be exempt from PSPR, removing some 12,000 pensioners from the impact of PSPR.

From 1 January 2020, further PSPR-amelioration will mean that all pensions up to €54,000 per annum will be exempt from PSPR, removing some 10,500 additional pensioners from the impact of PSPR.

When fully in place from the beginning of 2020, these changes will mean that the vast majority of public service retirees - approximately 97% - comprising everyone with occupational pension values up to at least €54,000, will be entirely free of PSPR. For those who retired since end-February 2012 that threshold will be even higher at €60,000.