Public servants already pay enough for pensions - union boss

The value of pension benefits and contributions will be the most contentious issue in forthcoming talks with the Government on a new agreement with public servants, trade unions have forecast.

Bernard Harbor of the trade union Impact, the country’s largest public service union, said on Tuesday that the priority for unions in the new talks was to secure a timetable for the elimination of pay cuts imposed over recent years and to maintain the value of public service pensions.

Public service union leaders met on Tuesday to discuss their position in advance of an expected invitation to attend talks in the weeks ahead on a successor to the Lansdowne Road pay accord.

Speaking after the meeting Mr Harbor said unions would be opposed to any move to increase staff contributions to their pensions or to link pension rises in the future to the rate of inflation.

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“We think public servants already make a very significant contribution towards their pension. Every euro you earn over €28,000, you are paying 20 per cent of that euro in pension contributions of one sort or another.”

“So we do not think there is a case for an increased contribution. But we are aware that the Government side is going to seek that in the talks and we will have to see what happens in the talks.”

Mr Harbor said unions would also see any move to link pension increases in future to the consumer price index as a reduction in the value of the benefit of pensions. “For many years pensions increases have been linked to the pay of people in the grade from which the public servant retired. We want to keep that in place. There is an argument from the other side that it should be linked to inflation instead but our priority in these talks will be to maintain the value of pensions and increases in pensions when they come along.”

He said unions were opposed to any move to link pension rises to inflation.

Commission report

Talks on a successor to the existing Lansdowne Road accord are expected to get under way in about a fortnight after the Public Service Pay Commission completes a report on the issue. The outcome will affect the pay and conditions of 300,000 State employees.

The report is expected to be presented to the Minister for Public Expenditure and Reform Paschal Donohoe by next Monday, May 8th.

Speaking on his way into Cabinet on Tuesday morning, Mr Donohoe said: "The Government will not be formulating its negotiation approach on these matters until the aftermath of the Public Service Pay Commission producing their report.

“I understand that the Commission are in the final stages of putting together their analysis.

“Their analysis will take account of what has happened in pensions across all of our economy and country over the last number of years.

“And when they have completed that analysis and made it available to my Department, myself and my Government we will then outline an approach for dealing with these issues which we will do in the context of the negotiations that we’ll have on the future of public pay.”

Pay increases

Any new deal is expected to involve across-the-board increases of about two per cent per annum over three years, provision for additional sectoral increases on foot of local bargaining and reforms of existing public service pension arrangements.

For public service employees earning above a set threshold, the Government may seek to convert the existing public service pension levy - introduced under financial emergency provisions in 2009 after the economic crash and which unions want abolished - into a permanent higher pension contribution.

The Irish Times reported last week that a confidential Government submission had maintained the cost of public service pensions was now running at €3.3 billion per year.

It argued that the differential between the amount the Government contributed to pensions for its staff and the amount private sector companies put aside for their workers was now about 18 per cent -- an increase of about 50 per cent in the last decade.

The Government has maintained the Pay Commission should take into account the increased value of public service pensions in making its findings.