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
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.
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 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.
ARCOIreland’s Strategy – Pension Related Issues
Members are encouraged to peruse ARCOIreland’s Strategy, ARCOIreland’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.