Thomas Byrne (Meath East, Fianna Fail)
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45. To ask the Minister for Education and Skills the actions taken to date to address errors in the estimated number of teachers retiring or leaving the system each year; the subsequent cost incurred; and if he will make a statement on the matter. [2720/19]

Joe McHugh (Donegal, Fine Gael)
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For the purposes of the annual Estimates process, my Department makes forecasts, based on trend analysis, of the scale of teacher retirements expected for the following year.

While forecasting retirements in the education sector is complex, this approach has proved robust and has provided a good indication of the scale of likely retirements and the expenditure implications for the following year.

The need for supplementary estimates over the period 2014 to 2018 to cover additional pension costs did not arise due to errors in forecasting.

Prior to Budget 2019, and aside from allocations to cover pay agreements, there had been no significant increase in the expenditure base for pensions for a number of years, despite increased costs. Given that this expenditure is demand-driven and non-discretionary, it was therefore necessary to seek supplementary estimates to provide for retirements and pension costs over and above what would be supported by the original allocation, having regard to offsetting savings which arose in other expenditure areas.

This is an issue which has affected other Votes, as highlighted in last year's Spending Review on pensions expenditure in the Defence Forces.

My Department, and the Department of Public Expenditure and Reform, have worked closely to resolve this issue in order to better align the expenditure allocation with the expected pensions and retirements bill. In Budget 2019, the Government allocated an additional €147 million in funding for pensions in the education sector, in addition to €12.5 million to cover the pensions-related costs of the Public Service Stability Agreement. This was calculated on the basis of actuarial work undertaken by the Department of Public Expenditure and Reform using data provided by my Department.

Unlike in previous years, where the supplementary estimates did not increase the expenditure base, this additional €147 million will be added to the base and will bring the pensions allocation in my Department to around €1.35 billion in 2019. This compares to a pre-supplementary allocation of c. €1.19 billion in 2018. This should mitigate the need for a supplementary estimate for pensions expenditure in 2019.