Pádraig Mac Lochlainn (Donegal, Sinn Fein)
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210. To ask the Minister for Public Expenditure and Reform if his attention has been drawn to the fact that some public sector workers who retired in 2008 have not received any increase in their State pension since then; and the reason pension payments are not index linked to public sector pay increases. [41580/20]

Michael McGrath (Cork South Central, Fianna Fail)
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As the Deputy may be aware, the previous Government approved the current pension increase policy for the pre-existing public service pension schemes (i.e. all pension schemes apart from the Single Public Service Pension Scheme) as part of its commitments under the Public Service Stability Agreement 2018-2020 (PSSA).

Under this policy, which applies for the duration of the PSSA, pay increases granted to serving staff over the course of the PSSA are passed on to those pensions awarded under the pre-existing public service schemes where the salary on which the pension is based does not exceed the salary of serving staff with the same grade and scale point, after the pay increase has been applied. If it qualifies, the pension is eligible for an increase to the extent that this will ensure alignment with the pay of serving staff.

The Deputy has specifically referred to individuals who retired in 2008. In that context, it is necessary to distinguish between those who retired before 1 March 2012 and those who retired after that date.

Generally, individuals who retired pre-March 2012 will have retired either before imposition of the first FEMPI pay reduction in 2010 or they were protected by the first 'grace period' so their pension does not reflect this reduction. As a result, some pensioners in this cohort are not eligible for pension increases arising from PSSA increases to serving staff as the salary on which their pension is based is still higher than the salary of serving staff on the same grade/scale point.

Individuals who retired from 1 March 2012 onwards retired either before the second round of FEMPI reductions were imposed in July 2013, were not affected by this second round of reductions as it only applied to salaries above €65,000, or the salary on which their pension is based does not reflect these reductions as a result of the second 'grace period'. Given that the salary on which their pension is based encompasses the first FEMPI reduction in 2010, this cohort of retirees are generally eligible for pension increases arising from PSSA pay increases as their pensionable salary will be lower than the salary of serving staff, following each of those pay increases.

Finally, I note that the question asks about pension increases in the ‘public sector’, which is generally understood as including the commercial semi State bodies. Under the various pension scheme rules operational to such bodies, in the first instance, it is a matter for the Government Department under whose aegis responsibility for individual commercial semi State Bodies falls to consider and approve any pension increase sought, with the consent of the Minister of Public Expenditure and Reform. Obviously, as part of such decisions, account must also be taken of the overall funding position in the relevant pension funds prior to taking any decisions on pension increases. The impact of pension increases on the sustainability of pension funds is an important overall consideration.