Gerald Nash (Louth, Labour)
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129. To ask the Minister for Public Expenditure and Reform if he aware of the pension proposal developed by CIÉ (details supplied) which includes provision for employees who reach 40 years of service and who cannot benefit any further under the defined benefit scheme, to then contribute to a new defined contribution scheme for their remainder of their time at work; if the Minister plans to consider such a system in the public service especially in light of the ability of public sector workers to work to 70 years of age; and if he will make a statement on the matter. [28123/25]

Jack Chambers (Dublin West, Fianna Fail)
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I am aware that CIÉ has developed a proposal, following discussions with the Trade Union Group, for amendments to the two Defined Benefit Schemes operated in CIÉ, that is the Regular Wages Staff Scheme and the 1951 Scheme. Under the Transport Act, 1950 and the Code of Practice for the Governance of State Bodies the approval of the Minister for Transport and my consent is required to amend or replace any existing Scheme. A consent request regarding CIÉ Schemes has not been received by my Department at this time.

It is a general principle of public service occupational pension schemes for individuals who commenced their employment before 1 January 2013 and who are pre-existing public service pension scheme members (i.e. not members of the Single Scheme) that their pension benefits are calculated on the basis of service accrued, up to a maximum of 40 years, and final pensionable remuneration. This calculation may also factor in the value of the State Pension Contributory (SPC) where integration with the SPC is a feature of the individual’s pension terms.

The pensions Benefit Cap was introduced in the Public Service Pensions (Single Scheme and Other Provisions) Act, 2012 to curtail entitlements to pension benefits across more than one scheme. The Benefit Cap provides that individual public servants can accrue no more than the ‘equivalent of 40 years’ service’ in total benefits across all pre-existing public service pension schemes. The Benefit Cap does not apply to the Single Public Service Pension Scheme as it has a different benefits structure that does not involve the accrual of service.

Public servants who are a member of a pre-existing public service pension scheme are required to pay contributions and the Additional Superannuation Contribution in accordance with the rules of the individual scheme. The contributions are required even if it is projected that the individual’s pension entitlements under the scheme will come within the scope of the Benefit Cap or where the individual reaches 40 years’ service within the same pre-existing public service pension scheme before retirement. This requirement is in place to ensure the long-term financial sustainability of relevant pension schemes. While the principle of the Benefit Cap limits the accrual of service to 40 years across one or more schemes, the pension scheme benefits are based on the relevant final pensionable remuneration, which increases in line with changes in remuneration up to date of retirement.

There is no plan to amend the pre-existing public service pension scheme rules to allow for cessation of scheme membership and/or provision of a Defined Contribution scheme for members who have attained 40 years’ reckonable service.