Pensions figures proved unpalatable
Muddying the water has long been a staple of political debate, especially when public representatives find themselves in uncomfortable positions.
Little surprise then that, faced with deeply unpalatable figures about the private sector cost of their generous pensions, the first instinct of some senior Ministers following The Irish Times disclosures was to introduce a series of items irrelevant to the issue.
The temptation was obvious. Figures compiled by this newspaper suggest that funding the retirement entitlements of Cabinet Ministers, if they were to retire at the next general election, would cost €36.3 million if they operated in the private sector.
Taking their departmental juniors into the equation brings that figure above €56 million, with the 15 Ministers of State between them accruing entitlements that would cost almost €19.8 million to fund in the private sector. Both figures include service as TDs as well as their ministerial pensions.
Taking into account other political appointees in the current Government – the Attorney General, the Ceann Comhairle, the Leas Cheann Comhairle, the Cathaoirleach, the Leas Chathaoirleach and the leader of the Seanad – adds a further €10.2 million to the figure, as the table shows.
Of course, that assumes that all the individuals involved retire at the end of the current Government – a major assumption in itself, given the political ambitions of many of those involved. It is not difficult to see why Ministers would be looking to deflect attention and suggest the figures were in some way inaccurate.
Minister for Public Expenditure and Reform Brendan Howlin was first out of the traps. As the man responsible for guiding the Public Service Pensions (Single Scheme and other Provisions) Act, 2012, through the Oireachtas, he is more familiar than most with the area – especially as he also has portfolio responsibility for reform of the public service.
Dismissing the figures as “not accurate”, he cited “mistakes” in the calculation.
He said the Government had taken steps to a different type of annuity, a sovereign annuity, which he said he had been advised would reduce the calculation by 20 per cent.
He also noted that increases in ministerial pensions were not tied to the consumer price index.
Sovereign annuities – essentially purchasing Irish Government debt – have indeed appeared on the landscape in an effort to reduce the cost of pension provision.
However, the pension regulator, the Pensions Board, has been extremely cautious in its view of how reliant private sector pension funds should be on them.