Pension entitlements multiply Ministers' pay
THE VALUE of the pension entitlements that accrue to Government Ministers means their total annual remuneration can exceed €400,000.
The age and gender of the politician concerned, as well as whether he or she is married, has an impact on the value of the pension entitlements that accrue to Ministers.
Adding a Minister’s salaries as a TD and “allowance” (additional salary) as a Minister to the pension entitlement that accrues for each year he or she is in Cabinet can give a total annual remuneration figure for the politician concerned.
On this basis the various levels of remuneration being earned by the members of the current Cabinet for their years with this Government, irrespective of previous years’ service, can be calculated.
On this basis the Minister for Agriculture, Marine and Food, Simon Coveney (40), is the most costly member of the Cabinet.
Changes to the rules governing politicians’ pensions some years ago mean retired politicians elected for the first time after 2004 cannot begin to collect their pensions until they are 65.
Retired politicians elected prior to 2004 can begin to collect a pension at 50. Mr Coveney, who was first elected in 1998, will be 43 in March 2016. The pension entitlement that will accrue to him during the five years of this Government, should it run to full term, would cost €1,706,176 if purchased privately today. This equals €341,235 per annum.
In cases where Ministers were of an age where they would have to wait a number of years until they reached retirement age, a calculation was done to work the annuity cost backwards. This was done using the 3 per cent inflation cap, and a 5 per cent return on investment (making for a net 2 per cent). In this way the cost was established for how much would have to be set aside now to pay for the annuity that would be required when the Minister concerned reached pensionable age.
In Mr Coveney’s case, when his salary is taken into account, his total annual remuneration is €510,510 per annum. This figure does not include his entitlement to a lump sum when leaving office. When contacted about the matter yesterday, Mr Coveney's spokeswoman said he had no comment.
Taoiseach, Enda Kenny, will accrue pension entitlements that over the five years to 2016 would cost €1,617,950 if an annuity to fund such a pension was being bought today. On this basis, the value of his pension entitlement accrues by €323,590 a year.
Mr Kenny’s salary as a TD and as Taoiseach is €200,000 per annum. Calculated in terms of total remuneration (salary and pension entitlement), he is getting €523,590 per annum.
Minister for Social Protection Joan Burton, who is married and will be 67 in March 2016, will have accumulated a pension entitlement over the course of the Government’s maximum term of five years that would cost €1,104,070 if an annuity to buy such a pension were purchased today. This translates into accumulating pension entitlements of €220,814 per annum. Adding her annual salary of €169,275 makes for a total remuneration per annum of €390,089.