Ken O'Flynn (Cork North-Central, Independent Ireland Party)
Link to this: Individually | In context

351. To ask the Minister for Public Expenditure and Reform if he will review the operation of the revised spouses’ and children’s pension scheme (2004) as it applies to teachers and other public servants, and to address the issue of compulsory contributions by single members with no dependents, who cannot benefit under the scheme, and for whom contributions are not refundable on retirement or death; and whether this constitutes discriminatory treatment of single employees compared with married or partnered colleagues. [57238/25]

Jack Chambers (Dublin West, Fianna Fail)
Link to this: Individually | In context

As the Deputy may be aware, my Department has overall responsibility for public service pension policy, including the policy pertaining to Spouses’ and Children’s schemes.

I am aware of concerns raised regarding the operation of the Revised Spouses’ and Children’s Pension Scheme, particularly in relation to compulsory membership of the scheme and the requirement for single members without dependents to make contributions to the scheme.

The original widows’ and orphans’ contributory pension schemes were first introduced in parts of the public service from 1968 and were open to male employees only; membership was subsequently extended to female employees, and the schemes were renamed Spouses’ and Children’s (S&C) schemes. At the time of their introduction for each cohort, membership was made optional for serving staff and mandatory for new entrants. In the Education sector the original scheme was introduced for male teachers in 1969 and female teachers in 1981.

Revised S&C schemes were introduced in the public service from 1984 onwards and replaced the original schemes for all new entrants on or after their operative date(s). The Revised Scheme relevant to the Education sector was introduced following recommendations of the Commission on Public Service Pensions 2000 and implemented via Department of Education Circular PEN14/05. Membership of the revised scheme is compulsory for new entrants from 1 September 2005, and like the original S&C scheme, contributions are set at 1.5%. Member contributions are compulsory under Revised S&C Schemes and there are no exemptions available based on marital or family status. In certain circumstances where a member has in excess of 40 years' service, they are entitled to a refund in respect of the excess period only, starting with the initial contributions paid.

The Revised S&C Schemes prevailing across the public service, which were introduced in agreement with staff interests, extended the benefits payable to include post-retirement marriages and also extended the children's benefit to include a broader category of eligible children, including adoptive, post-retirement/resignation and non-marital children of the member. S&C schemes operate on a similar basis to any group insurance scheme, whereby each member pays a contribution to ensure coverage, but not every member will receive a benefit from their scheme. The nature of the schemes is such that they provide for contingent benefits to each member. S&C Scheme benefits only become payable in the event of the member’s death; if a married member is pre-deceased by their spouse/civil partner, no spousal benefit is payable. Children’s benefits are only payable where the child is under 16 years of age or under age 22 and in full-time education or where the child is dependent (due for example a disability), and the disability occurred before the child reached age 16 or 22.

The Revised S& C Schemes do not provide for refunds of contributions to single members without dependents at retirement. This reflects the scheme’s structure as a collective risk-pooling arrangement, where contributions partially fund benefits for eligible survivors across the membership base. Furthermore, it is not possible to determine that a person will never benefit from the Revised S&C schemes as the schemes provides for marriage/civil partnership after retirement and or children outside of marriage, stepchildren of marriages after retirement, children adopted after marriage etc.

All public service S&C schemes, both original and revised, are contributory in nature, regardless of whether the relevant main pension scheme required pension contributions. Members of the original scheme receive a full refund of contributions on retirement if they remain unmarried throughout their period of membership, as post-retirement spouses/civil partners and children are not covered under that scheme. Members of the revised scheme do not receive this refund because the scheme is designed to cover post-retirement marriages/civil partnerships and a broader category of children.

For public servants appointed on/after 1 January 2013, Survivor Benefits and associated contributions are embedded in the Single Public Service Pension Scheme. The applicable Survivor Benefits are in keeping with those available through membership of a revised S&C Scheme.

All public servants hired after a scheme relevant date are enrolled in the applicable scheme on a mandatory basis, regardless of their marital or family status. Contributions are payable at the same rates by all scheme members, and marital or family status does not impact upon the members’ benefits within the main pension scheme; the pension benefits payable for any public service scheme are calculated in the same manner for all members regardless of this.

While the scheme does not differentiate contribution rates based on marital or parental status, it is acknowledged that some members may not ultimately benefit from the survivor provisions. However, this does not constitute unlawful discrimination under current pension legislation, as the scheme applies uniformly and is based on actuarial principles common to defined benefit arrangements. Public service S&C Schemes are not in contravention of equality legislation, and any refund mechanism, other than those permitted under the scheme rules, is not possible.

As mentioned above, Public Service S&C schemes are structured on a group insurance basis and the member contribution rates take account of the fact that payment of benefits will not arise in respect of all members. I have no plans to review these arrangements.