Category Archives: Pensions

Pension Reduction & Restoration – A Summary

Public Service Pension Reduction

Under the Financial Emergencies Measures in the Public Interest Act 2015 (FEMPI 2015), the Public Service Pension Reduction is being ameliorated providing for a total reduction of €1,680 in three phases for retired officers: 01 January 2016 – €400; 01 January 2017 – €500; and 01 January 2018 – €780.  The final adjustment under FEMPI 2015 will be reflected in the January 2018 payslips.

Public Service Stability Agreement 2018 – 2020

The Public Service Stability Agreement was approved by Government and ratified by the Public Service Committee of the Irish Congress of Trade Unions. Paragraph 6.2 of the agreement prescribes that future policy on public service pensions in payment for the duration of the agreement will be guided by:

  • The need to adopt an equitable approach to the various public service pensioner cohorts who are now not only differentiated by amount of pension in payment (determined by grade and service) as heretofore but also by date of retirement (in particular pre and post end-February 2012).
  • Accordingly, for those who retired or will retire post end-February 2012, to the extent that they retired on reduced salaries, they will receive pension increases in line with the pay increases due to their peers currently in employment under the terms of this Agreement.
  • When alignment is achieved between pre and post end-February 2012 pensioners, as will happen progressively for salary pay ranges up to €70,000 by 2020 under this Agreement, pay increases will continue to benefit pensions in payment for the duration of this Agreement.

 

Public Service Pay and Pensions Bill 2017

General

On 09 November, the Minister for Finance and Public Expenditure and Reform, Paschal Donohoe, T.D.  secured Government approval for the publication of the Public Service Pay and Pensions Bill 2017.  

The Public Service Pay and Pensions Act 2017, (Number 34 of 2017), was enacted on 16 December.   The Act provides legal basis for the provisions of the Public Service Stability Agreement 2018 – 2020, which was approved by Government in June, and was ratified by the Public Services Committee of the Irish Congress of Trade Unions in September.

Pension Restoration

Regarding pensions, part three of the Public Service Pay and Pensions Act 2017 provides for a further substantial lessening of the impact of the Public Service Pension Reduction (PSPR) on public service pensions in 2019 and 2020, with a provision to provide for the elimination of the remaining impact of the measure by Statutory Order to be made by 31 December 2020.

The Act provides for the lessening of the PSPR for both pre- and post-March 2012 retirees.

From 01 January 2019, retired officers in receipt of pensions up to €39,000 will be exempt PSPR, and from 01 January 2020 the figure increases to €54,000.

Officers who retired on or before 29 February 2012 had their pension calculated by reference to their ‘pre-cut’ salary. Officers who retired after that date had their pension calculated on their (lower) salary at January 2010.  Because of the difference in salary, different rates of PSPR were applied to these cohorts.

For the pre-2012 cohort, the following table applies:

Annualised Pension (2019) Annualised Pension (2020) Reduction
Up to €39,000 Up to €54,000 Exempt
€39,000 – €60,000 €54,000 – €60,000 12 per cent
€60,000 – €100,000 €60,000 – €100,000 17 per cent
Over €100,000 Over €100,000 28 per cent

 

For the post-2012 cohort, the following table applies:

Annualised Pension Reduction (2019)  Reduction (2020)
Up to €60,000 Exempt  Exempt
€60,000 – €100,000 3 per cent  1 per cent
Over €100,000 8 per cent  6 per cent

 

Consistent with PSPR application to date, the band-specific percentage reduction rates above apply to the relevant slices of an affected pension; they do not apply to the entire pension.

The Minister for Public Expenditure and Reform is required to make a Statutory Order by 31 December 2020, which provides for a date by which any remaining PSPR impact will cease to apply.

Pay Increases

Pay increases since 2016 to end-2020 will be passed along to pensioners whose pensions were based on lower salary levels than are paid to pensioners who retire after each increase.

For post-March 2012 retirees, all pay increases since 2016 will be passed along.

For pre-March 2012 retirees, pensions based on (pre-cut) salaries of over €70,000 will not receive any parity increases.  For this cohort on (pre-cut) salaries of less than €70,000, pensioners will benefit where the PSSA increases result in the current salary exceeding its pre-FEMPI peak.

These increases will be applied in addition to the lessening of PSPR as outlined above.

ARCO’s Strategy – Pension Related Issues

Members are encouraged to peruse ARCO’s Strategy, ARCO’s Submissions to the Pay Commission, to the Minister for State with Responsibility for Defence, and to the Minister for Public Expenditure and Reform, and subsequent responses, all of which are posted and available on this website.

In this context, the Alliance of Retired Public Servants is continuing to pursue full restoration of all pensions to all cohorts by the end of 2019, the determination of pension increases, and access to an independent third party mechanism for pension related issues.

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Pension Restoration – Responses from DPER

On 08 August, the Department of Public Affairs and Reform responded to ARCO’s submission dated 04 May to the Minister for Public Affairs and Reform.  Link to letter.

Following a meeting on 12 July between the Alliance of Retired Public Servants and the Minister of Public Expenditure and Reform, the Alliance received a letter from the Department on 18 August.  Link to letter.

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Understanding the Pension Schemes

ARCO’s Strategy on Pension Related Issues includes relative information on the pension schemes for retired commissioned officers of the Permanent Defence Force.

The Representative Association of Commissioned Officers has kindly provided permission to post its information booklets which provide general information on the four pension schemes that have evolved.

The booklets, prepared by Colonel Brian O’Keeffe (Retd) former General-Secretary of RACO and commissioned by the Irish Pensions and Finance, may be accessed through the following links:

 

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Submissions by ARCO to Government Ministers on Pension Issues

Having already made a comprehensive submission to the Public Service Pay Commission on 03 April, and having published its Strategy on Pension Related Issues on this website, the EXCOM of ARCO made submissions to the:

Minister of State with Responsibility for Defence and the

Minister for Public Expenditure and Reform,

on 04 May 2017, in which it took the opportunity to advance its position on the following pension related matters:

  • the valuation of public servants’ pensions,
  • the process of pension restoration under FEMPI,
  • the mechanisms associated with pension abatement,
  • the determination of pension increases, and
  • access to an independent third party mechanism for pension related issues.

These additional submissions may be accessed by clicking on the respective Minister’s titles above. Again, the EXCOM welcomes feedback on these documents.

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ARCO’s Strategy on Pension Related Issues – May 2017

The Public Service Pay Commission is expected to submit its report to Government in May 2017. Talks on public service pay will follow. In parallel, the Government will focus on significant pension reform for State employees. A commitment to reverse the public service pension deductions by 2021 is provided for in the Programme for a Partnership Government. In the interim, corrections in pensions are reflected in the amelioration process on 01 January 2016, 01 January 2017, and 01 January 2018. Beyond the process of pension restoration and pay negotiations, it is likely the Government will further address the adjustment of the value of public service pensions by means of pay or other linkages.

During active service and in retirement, ARCO’s membership made a significant financial contribution in the delivery of unprecedented savings across the public service. In the current financial climate, 2021 as a possible date for the full restoration of pensions is unwarranted and unfair. The value of pensions should be protected, and an appropriate independent third party mechanism is necessary to address pension anomalies and entitlements.

In this context, the EXCOM has developed a comprehensive Strategy on pension related issues. The Strategy provides relevant information, outlines ARCO’s position on specific subjects and prescribes the associated implementation process. The objective is to inform ARCO’s membership on evolving pension issues and to provide the EXCOM with material for use in submissions to external stakeholders.

Subjects addressed include: Valuation of Public Service Pensions, Pension Restoration, Pension Abatement, Provision for Pension Increases, and Independent Third Party Mechanism.

Each section contains relevant information, statistics, and constructive analysis. Within key sections, both the Government’s position and ARCO’s approach to address specific issues are outlined. For ease of reference, ARCO’s position on all issues is consolidated in Annex ‘A’. Annex ‘B’ provides an Aide Memoire (TACAID) of key lobbying issues.

Availing of the information contained within the Implementation Section and Annex B, members are encouraged to be actively engaged in the lobbying process. Feedback on the Strategy will be welcomed by the EXCOM.

Following on from its submission to the Pay Commission, the EXCOM made submissions to the Minister of State with Responsibility for Defence and the Minister for Public Expenditure and Reform on 04 May 2017. These additional submissions will be posted on the website, in due course.

Link to Strategy

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Submission to the Public Service Pay Commission

Public Service Pay Commission. On 18 October 2016, the Government approved the establishment of an independent Public Service Pay Commission to advise it on public service pay. The Commission will shortly provide an initial report to Government on public service remuneration in the context of the Financial Emergency Measures in the Public Interest Acts 2009 – 2015. In its findings the Commission will take account of the superannuation and other benefits that apply in the public service and will consider the issue of public service pensions in the context of the Department of Public Expenditure and Reform’s pension evaluation. The inclusion of the value of Public Service Pensions in the determination of the Commission’s findings will have major implications for future levels of pay in the Public Service and will impact significantly on how pensions are calculated.

ARCO’s Submission. On 03 April 2017, ARCO made a substantial submission to the Commission, advancing its concerns on the mechanism used for calculating the value of public service pensions and conveying the Association’s position on the process of pension restoration under FEMPI. ARCO’s submission also addressed the determination of pension increases, existing pension anomalies, and access to an independent third party mechanism by retired public servants. The EXCOM welcomes feedback on the submitted document.

LINK to ARCO’s submission

PENSIONS

On 03 April, ARCO made a formal submission to the Public Service Pay Commission on pension related issues. A STRATEGY ON PENSION RELATED ISSUES, drafted by a Working Group, will be presented for approval by the EXCOM on 21 April. Subsequently, the Strategy will be made available to the membership by means of the Association’s website. In the interim, the Alliance of Retired Public Servants has circulated a Toolkit as a guidance document in lobbying politicians on key issues such as the restoration of pensions.

At both national and local level, the lobbying process will target political stakeholders, especially Government Ministers, their respective advisors, and members of the Oireachtas, Councils and County Councils. 

Link to Alliance’s Lobbying Toolkit.

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Information Needs

Members of ARCO will have information needs, from time to time, in relation to a wide range of areas that come under the responsibility of state and other bodies. These include social welfare benefits, education grants, the administration of a deceased person’s estate, tax and investment issues, marriage and other relationships, consumer rights, pensions, domestic charges etc.

The most effective way of getting information on these issues is through the Citizens Information Board.  This organisation provides information on public services and entitlements in Ireland through its website, www.citizensinformation.ie, which contains comprehensive information on these matters, and more. 

You can also phone the Citizens Information Phone Service at 0761 07 4000, Monday to Friday, 9am to 8pm, or visit your local Citizens Information Centre.

Relate, the journal on developments in social services, policy and legislation in Ireland, is published by the Citizens Information Board. If you would like to receive Relate by email you can subscribe by sending an email with the subject line SUBSCRIBE to relate@ciboard.ie, including your name.

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DUBLIN REGIONAL MEETING – Alliance of Retired Public Servants

The Alliance of Retired Public Servants (ARPS), of which ARCO is a member, has held a number of meetings with senior officials of key Government Departments on pension issues. Regional Meetings are being held countrywide by the ARPS Executive Committee to update retired Public Service Pensioners on these issues.

The Dublin Regional Meeting will take place on Monday, 22nd February, at 2 pm in Wynn’s Hotel, Abbey Street, Dublin 2.

ARCO Members are encouraged to show their support by attending this meeting.

Payment of December’s Pension

We have been informed by the Department of Defence that December's Pension Cheque will be lodged to members' bank accounts on Friday, 18 December 2015.

 

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