Maintaining value of pensions priority for public service unions

Public service trade unions are to oppose any moves by the Government to increase the financial contribution of staff towards their pensions, or to link pension rises in future to the rate of inflation.

Unions have forecast that the value of pension benefits and contributions will be the most contentious issues in forthcoming talks with the Government on a new public service agreement.

Bernard Harbor, head of communications at Impact – the country's largest public service trade union – said on Tuesday the priority for unions in the new talks was to secure a timetable for the elimination of pay cuts imposed over recent years and to maintain the value of public service pensions.

Public service union leaders met on Tuesday to discuss strategy in advance of an expected invitation to attend talks in the weeks ahead on a successor to the Lansdowne Road pay accord.

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Speaking after the meeting, Mr Harbour said unions would be opposed to any move to increase staff contributions to their pensions or to link pension rises in the future to the rate of inflation.

“We think public servants already make a very significant contribution towards their pension. Every euro you earn over €28,000, you are paying 20 per cent of that euro in pension contributions of one sort or another.”

“So we do not think there is a case for an increased contribution. But we are aware that the Government side is going to seek that in the talks and we will have to see what happens in the talks.

Mr Harbour said unions would also see any move to link pension increases in future to the consumer price index as a reduction in the value of the benefit of pensions.

“For many years pensions increases have been linked to the pay of people in the grade from which the public servant retired. We want to keep that in place. There is an argument from the other side that it should be linked to inflation instead but our priority in these talks will be to maintain the value of pensions and increases in pensions when they come along.”

Report

Talks on a new agreement are expected to commence later this month after the Public Service Pay Commission completes its report. This document is expected to be given to the Government in the coming days and published next week.

The talks are expected to centre on across-the-board increases of potentially about 6 per cent over three years as well as provision for additional money to deal with problems in individual parts of the public service.

However, it is also expected that the Government will raise the issues of linking pension increases to inflation and converting part of the existing public service pension levy – which averages at about 5 per cent – into higher contributions for those earning above a certain threshold.

The Irish Times reported last week that a confidential Government report had maintained the cost of public service pensions was now running at €3.3 billion per year.

It argued that the differential between the amount the Government contributed to pensions for its staff and the amount private sector companies put aside for their workers was now about 18 per cent – an increase of about 50 per cent in the last decade. It is understood the pay commission will estimate that this differential is about 12 per cent.

The Taoiseach Enda Kenny told the Dáil that the Government had not yet received the pay commission report.

He repeated comments made last December by the Minister for Public Expenditure Paschal Donohoe that "the value of public service pensions has clearly increased in recent years and this is why the work of the Public Service Pay Commission is going to be so important."

It is understood that at the meeting of the public service committee on the Irish Congress of Trade Unions on Tuesday, union leaders were told pensions were likely to be major issue in the talks and that the Government had advised that 2018 was going to be a very difficult financial year.

It is understood nurses raised the issue of recruitment and retention and lower-paid civil servants highlighted the requirement on staff to work additional hours. However, it is understood that may be considered as a “red line “ for the Government.

Union leaders were urged not to talk to the media.