Big cuts in top public service pensions

Legislation giving effect to proposed pay cuts for public servants earning over €65,000 with a parallel reduction in pensions over €32,500 has been published by Minister for Public Enterprise and Reform Brendan Howlin.

The Financial Emergency Measures in the Public Interest Bill 2013 also contains a number of contingency measures, such as a universal freeze on increments, which will not be introduced if the public service unions sign up to the deal.

Mr Howlin told the Dáil that the legislation will provide a facility for unions to conclude collective agreements with their public service employers which will avoid the need for those contingency measures to be introduced.

The Bill also provides that some highly paid public servants, such as those working in the National Treasury Management Agency, who were excluded from earlier cuts, will now be subject to pay and pension reductions.

Under the terms of the legislation, increments will be suspended for three years for all public servants unless they are covered by the agreement that modifies the terms deal.

It also clarifies the existing powers of Ministers, the Government or other bodies to reduce the remuneration or increase the working time of public servants.

Small incentive
The Bill also contains a small incentive in that the pension deduction on all public servants will be reduced by €125 from January 1st next.

However, there are significant cuts in the pension paid to many retired public servants. The reductions contained in the Bill are in addition to two earlier cuts, one introduced by the Fianna Fáil-led government and the other by the current Minister for Public Expenditure and Reform.

Highly paid public servants, judges and politicians will have another 8 per cent cut in their pensions over €100,000, bringing their total cut to 28 per cent since the start of the crisis.

Those on pensions between €60,000 and €100,000 will have another 5 per cent cut bringing their total cut to 17 per cent.

Total cut
Pensioners getting between €24,000 and €60,000 faced another 3 per cent cut, bringing their total cut to 12 per cent, while those between €12,000 and €24,000 have another 2 per cent cut, bringing their total cut to 8 per cent. Those on pensions below €12,000 are exempt from any cuts.

Mr Howlin said the Government recognised that the savings being sought from the public service pay and pensions bill were extremely difficult and challenging for all public servants.

“The Government is conscious of the significant contributions made to the recovery of the State by public servants.

“They are a necessary further contribution to the fiscal consolidation process required to restore our economic sovereignty and bring our current expenditure deficit under control,” Mr Howlin said.