Jack Chambers (Dublin West, Fianna Fail)
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205. To ask the Minister for Public Expenditure and Reform if the 1% pay increase which is referenced in Parliamentary Question No. 194 of 27 February 2018 has been applied entirely to all qualifying pensions; and if he will make a statement on the matter. [35686/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy will appreciate, I have administrative responsibility for the Civil Service Pension Schemes and I exercise a central policy/authorisation role in relation to all other public service pension schemes. Insofar as pension increases are concerned, the main function of my Department is to determine, subject to appropriate Ministerial and Government approval, the pensions increase policy to apply, and to issue Circulars to Departments and public service bodies to authorise and give guidance on the application of the relevant increases. It is then a matter for each pension paying authority to ensure that effect is given to the pension increases authorised in the relevant Circulars, in the present instance, those set out in Circular 02/2018.

The principle of pay parity underlies the pension increases sanctioned in this Circular. This means that pay increases, agreed as part of the Public Service Stability Agreement 2018-2020 (PSSA), are to be passed on to pension recipients to bring the salary on which their pension is based up to the current salary of those still serving after the pay increases are applied. It is important to note that not all pension recipients will be due these increases. This is because of protections in place (known as ‘grace periods’) for public servants retiring after the application of pay cuts under the FEMPI legislation, whereby their pensions were calculated using the higher pay rates that were in effect prior to the application of the pay cuts.

The administrative procedures for applying pay parity to pensions in payment, both in general and in the particular case of Circular 02/2018, are not straightforward. They require an examination of the salary on which an individual’s pension was based and the salary of those still serving in the same grade and on the same payscale point after the pay increase is applied, which I am advised is largely a manual process. The grace periods to which I refer above, a valuable protection for the pension entitlements of the public servants concerned, inevitably impose an additional hurdle to be addressed in the application of pension increases.

The Deputy will appreciate that the procedures I have described are inevitably complex and time-consuming, and that, as a result, not all pension increases will be capable of being paid on any one fixed date.

As I mentioned in my earlier response, responsibility for implementing the increases, within the context of the administrative issues I have outlined above, lies with the various public service pension/payroll providers. I understand that work is underway to apply the 1 January 2018 pay increase, the first pension increase sanctioned in Circular 02/2018, to those qualifying pensions in payment that have not yet benefited from that increase, and that this will include the calculation and payment of arrears backdated as appropriate.