Group to lobby politicians on pension benefits

Former public servants who say they have lost "thousands of euro" in pension benefits are planning to raise the issue with trade unions and politicians ahead of the election.

The group, led by George O'Sullivan, a former national chairman of the Chartered Institute of Management Accountants and a lecturer in the subject in Cork Institute of Technology (CIT), argues that the State failed to inform them fully of their pension rights when they became public servants.

They say this has cost thousands of people as much as 20 per cent of their potential retirement benefits.

The group is calling on the Irish Congress of Trade Unions (Ictu) to tackle the issue, and is seeking to have it raised at next week's annual conferences of the State's teachers' unions. It has also approached a number of political parties, including Fine Gael.

Mr O'Sullivan explained yesterday that the people affected are mainly teachers, lecturers, nurses and other staff who joined the public service in mid-career, when it would not have been possible for them to accrue their full State pension on retirement.

Since the early 1980s, such people have had the option of buying into the State's defined benefit scheme, through its notional service purchase plan. This means they get a guaranteed, index-linked pension on retirement. Alternatively they can use additional voluntary contributions (AVCs) to purchase an annuity to top up their pension, which has tax benefits but does not have the same guarantees as the State scheme. Mr O'Sullivan said that in many cases, the State bodies for which they were working failed to tell these employees of their right to buy into the public service pension. As a result, they took the AVC option, which was more expensive and did not pay as much as the public service scheme.

"The State had the duty to inform them, and it was at the very least negligent about doing this," Mr O'Sullivan said. He added that the former public servants affected worked for bodies like vocational education committees, institutes of technology and health boards.

He explained that nurses on €48,000 a year who wanted to top up their pension would, under the State's service purchase plan, pay €10,300 gross or €4,200 net after tax, for an extra year's pension of €600. Using AVCs, the same extra benefit would cost €22,600 gross, he said.

The benefit paid under the State scheme would increase in line with the salaries paid to those still working.

This has worked out at over 5 per cent annually for the last 20 years.

According to Mr O'Sullivan, while the State established the trusts to safeguard the pension rights of the workers in its various bodies, the trustees were nominated by their trade unions.

He is a former member of the Teachers' Union of Ireland (TUI), and he and a founder member of the union, Donnchadh Ó Riordáin, want the issue raised at its conference next week.

TUI general secretary, Jim Dorney, said yesterday that the union has always "fully and clearly" informed its members of their pension options.