New staff in public service to be allowed to work until 70

 

THE GOVERNMENT has signalled that new staff recruited to the public service in future will be allowed to work until age 70.

The Department of Finance yesterday held the first round of talks with public sector unions on Government proposals for pension reforms.

In the Budget last December, Minister for Finance Brian Lenihan said the Government had decided to introduce a single pension scheme for all new entrants to the public service.

He said the scheme would be in place by the end of the year.

Among changes in the new scheme would be that benefits would be calculated in a manner in which pensions were based on “career average” earnings rather than final salary on retirement, as at present, he added.

“This will be more equitable than the present system, which favours those with higher earnings later in their careers,” he said.

The Minister also said that the minimum pension age for new public servants would also be increased from 65 to 66 and then linked to increases in the State pension age.

Informed sources said that at the meeting yesterday, the Department of Finance indicated the maximum retirement age would be 70 for future entrants.

In the budget, Mr Lenihan said the Government would also review the current arrangement whereby public service pensions were linked to increases paid to serving personnel. He suggested that in the future the Government would consider linking pensions to increases in the cost of living.

Union sources said this issue was not addressed at the meeting yesterday.

The proposed changes to public service pension arrangements have caused concern to staff, and the issue is another which unions want addressed as part of any new negotiations with the Government.

Taoiseach Brian Cowen and Minister for Social and Family Affairs Mary Hanafin will launch the Government’s new national pensions framework next Wednesday.

This document will outline reforms to State, private and public service pension provision and will address the role of the employee, employer and State in providing for pensions, as well as the future age of retirement.