Paschal Donohoe (Dublin Central, Fine Gael)
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I and my Department are responsible for the civil service pension schemes, which cover members of established and unestablished civil service and State industrial schemes.

The authorities responsible for the administration of the large number of pension schemes operating in the various sectors of the public service are, in general, the relevant employers and Ministers in those sectors.

It would be a matter for those sectoral authorities, including relevant Ministers, to supply such information as may be available in respect of the number of people in receipt of a pension from those individual pension schemes.

There were 30,299 civil service pensions in payment in respect of the Superannuation and Retired Allowance (Vote 12), as per the latest audited and published Appropriation Account at year-end 2022.

My officials estimate that the number of civil service pensions will increase by c.2-3% p.a. over the next two decades.

It should be noted that a significant number of reforms have been implemented over time to improve the sustainability of public service pensions, namely:

• Integration of public service occupational pensions with the State Pension Contributory in 1995;
• Increase in the normal retirement age to 65 in 2004;
• Introduction of the Single Public Service Pension Scheme for all new entrant public servants from January 2013;
• Increase in the maximum retirement age to 70 for pre-2004 public servants in 2019; and

The conversion of the Pension Related Deduction (PRD) to a permanent Additional Superannuation Contribution (ASC), increasing employee contributions from €1.0bn to €1.7bn in 2022.

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 188 and 189 together.

The Department of Public Expenditure, NDP Delivery and Reform made a technical submission on the value of public service pensions to the Public Service Pay Commission in 2017. Following analysis of all submissions, the Commission set out findings in relation to the relative value of the various categories of public service pension schemes, as well as their relative value compared to private sector occupational pensions.

The Commission proposed a costing estimated in the range of 23-25% for pre-2013 public service employees with standard accrual terms. This reflects the notional contribution, as a percentage of salary, which would be required to be paid throughout the working life of an average employee in order to generate the pension and gratuity accrued by the member at retirement.

In respect of new entrants to the public service since January 2013, the Commission concluded an estimated costing in the range of 6-7% for post-2013 public service employees (Single Scheme) with standard accrual terms and 7% for post 2013 private sector employees. This implies a differential between the estimated costs for post-2013 public service employees and private sector comparators in the range of -1 to 0%.

Further detail in relation to the Commission’s findings can be found at:

PSPC-report-2017-WEB.pdf (paycommission.gov.ie)

It's important to note that following the publication of the Commission's findings, an Additional Superannuation Contribution (ASC) was brought in for all public servants under the Public Service Pay and Pensions Act 2017. This effectively reduced the notional employer cost of public service service pensions with different ASC rates applying to those in the pre-2013 pension schemes and post-2013 pension scheme (Single Scheme). See rates set out below.

Salary Band	Pre-2013 - Standard accrual Rate	Post-2013 - Single Scheme rate
€0 to €34,500	Exempt	Exempt
Over €34,500 to €60,000	10%	3.33%
Over €60,000	10.5%	3.5%

Public service employees make a significant contribution to the overall cost of benefits with €1.7 billion paid in employee contributions and ASC in 2022. This provides substantial ongoing support towards the cost of public service pensions.

In terms of funding, public service retirement benefits are in the main unfunded or paid out of general taxation as and when the cost arises, i.e. ‘Pay-As-You-Go’. Contributions and ASC paid by employees are treated as appropriations-in-aid. Consequently, the concept of a ring fenced fund does not arise in the context of public service occupational pensions.