Ministers of State's pensions would cost almost €20m at market prices
The 15 Ministers of State will have pension entitlements at the end of this Dáil’s term that would cost €19,789,274 if bought in the marketplace today, according to further analysis of the value of the pensions of political office holders conducted by The Irish Times.
The figures are based on the Government serving its full term to March 9th, 2016. The equivalent value for Cabinet Ministers’ pensions was €36 million, an earlier analysis found.
Fine Gael Minister of State for Small Business John Perry will have a pension entitlement that pension providers would charge €2.2 million for if he was to buy it at today’s prices. He will also be entitled to a lump sum of €125,107.
The next most expensive pension entitlement is that of Minister of State for Tourism and Sport, Michael Ring, whose pension would cost €2.16 million at today’s prices. He will also be entitled to a lump sum of €139,008.
The Ceann Comhairle, the Leas Cheann Comhairle, the Attorney General, the Cathaoirleach of the Seanad, the Leas Chathaoirleach of the Seanad, and the Leader of the Seanad, who also get pensions under the ministerial scheme, will have entitlements that would cost €10.2 million combined.
Politicians’ defined-benefit pensions are paid by the exchequer. Those who served in the Dáil prior to 2004 are entitled to a full pension on retirement once they reach 50.
Ministers of State receive a TD’s salary and a separate ministerial salary. Each of the salaries has its own pension scheme and the two pension schemes have different rules in relation to entitlements.
In the private sector, defined-benefit pension funds traditionally buy annuities, which provide for pensions with specified conditions at the time people retire.
The Irish Times has priced how much annuities would cost today for the pensions that Ministers of State will be entitled to at the end of this Government’s term, should they retire at that date.
Annuities have become particularly costly because of low bond yields arising from the economic slump which has hit the pension funds on which private pensions depend.
TDs and Senators pay 6 per cent of their salaries towards their pension and a public sector pension levy of slightly more than 8 per cent. The ministerial pension scheme does not involve salary deductions.