Written answers

Wednesday, 27 November 2019

Department of Public Expenditure and Reform

Public Sector Pensions

Photo of Aindrias MoynihanAindrias Moynihan (Cork North West, Fianna Fail)
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103. To ask the Minister for Public Expenditure and Reform the timeline to reinstate the levels of payment of pensions to workers which were cut under the FEMPI legislation to pre-FEMPI levels; and if he will make a statement on the matter. [49418/19]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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I am taking it that that the Deputy is referring to the Public Service Pension Reduction (PSPR), a reduction applied to public service pensions above certain exemption thresholds, which was introduced on 1 January 2011 under the Financial Emergency Measures in the Public Interest (FEMPI) Act 2010.

A three-stage partial reversal of PSPR was provided for in the FEMPI Act 2015, with rate reductions (through revised PSPR tables) occurring on 1 January in each of the years 2016, 2017 and 2018. 

The Public Service Pay and Pensions Act 2017 provided for the substantial further lessening of the impact of PSPR by way of rate and/or threshold changes in each of the years 2019 and 2020. The significant further lessening of PSPR occurring under the 2017 Act means that:

- as of 1 January 2019 all pensions up to €39,000 per annum are exempt from PSPR, and

- from 1 January 2020, all pensions up to €54,000 per annum will be exempt from PSPR.

For more recent retirees (February 2012 - 1 April 2019), no pension with a value of up to €60,000 per annum has been subject to PSPR since 1 January 2019, and those who retired after 1 April 2019 are not subject to PSPR at all. This implies that only those pre-March 2012 pensions that are linked to salary rates of a minimum amount of €108,000 per annum, or €120,000 per annum for the February 2012-1 April 2019 retiree group, will bear any persisting PSPR impact from 1 January 2020 on. When fully in place from the beginning of 2020, the changes will mean that the vast majority of public service retirees - approximately 97% - will be entirely free from PSPR. 

Section 27 of the Public Service Pay and Pensions Act 2017 Act provides that the Minister for Public Expenditure and Reform will, no later than 31 December 2020, make an order which will specify a date for the full removal of PSPR from that residual group of PSPR-affected pensions. Accordingly, the date specified in the order will effectively be the date for the complete abolition of PSPR.


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