Public service pensions to cost exchequer €2.9bn

PUBLIC SERVICE pensions will cost the State €2

PUBLIC SERVICE pensions will cost the State €2.9 billion this year, Minister for Public Expenditure and Reform Brendan Howlin has confirmed.

Mr Howlin said legislation outlining a new public service pension scheme would be published before the end of the month.

“In 2011, it is estimated that the cost to the exchequer for public service pensions will be €2.9 billion. This is a very substantial bill for the Government which requires structural change,” he said.

Mr Howlin likened the public service to a “patchwork quilt” of individual structures “with different pay rates, different grades, holiday arrangements and working hours”. The Government needed to “take a handle on this”, he said. However, he added: “You can’t change it all overnight. These are things that have been there for decades.”

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Under a planned scheme, which will apply to new entrants to the public service, there will be a maximum retirement age of 70 and a minimum pension age of 66. Pensions will be based on career-average earnings, rather than on final salaries. The Government is committed to introducing a new public service pension scheme under the terms of the memorandum of understanding with the EU-IMF.

“In time, all civil and public servants will have the same basic pensions scheme, with appropriate accommodation for whatever terms and conditions might be required in particular areas, such as An Garda Síochána or the Defence Forces.”

Mr Howlin also told the Oireachtas finance committee of progress on the Government’s policy of capping future public service pay rates at €200,000.

A €200,000 maximum pay rate for new secretaries general of Government departments was introduced in June this year, representing a reduction of almost 30 per cent on 2008 pay rates. Current secretaries general effected waivers to bring their remuneration within the new limit, Mr Howlin said. “I can tell the committee there’s no secretary general receiving a salary greater than that now.”

Mr Howlin said as far as he was aware no civil servant now earned more than €200,000.

Cabinet had discussed imposing a €200,000 pay ceiling on medical consultants, but Minister for Health James Reilly is negotiating with consultants.

Meanwhile, Mr Howlin said Government wanted to honour its commitments under the Croke Park agreement, but warned this would only be possible if the agreement was implemented in full.

“While some good progress has been made to date . . . it is clear that there can be no let up in the efforts of all sides to ensure that further change and reform is delivered as quickly as possible.”

Mr Howlin said a reform-and-delivery office was being established within his department and a programme director would be appointed to take charge of the office in the coming weeks.

A proposal for a constitutional amendment to safeguard the rights of members of the public to communicate in confidence with the public representatives would be brought forward, he said.

Mary Minihan

Mary Minihan

Mary Minihan is Features Editor of The Irish Times