Pension concessions to be offered to public servants retiring in 18 months

The Government has offered significant pension concessions to public servants retiring in the next 18 months in a bid to encourage support for the new Croke Park agreement.

Staff retiring before the end of August 2014 will have their pensions and retirement lump sums based on their salaries before pay cuts under the new deal. A letter sent to unions yesterday said that Minister for Public Expenditure and Reform Brendan Howlin wanted to facilitate public service management in planning for staff departures in an orderly fashion.

“Accordingly, he has decided public servants who retire before the end of August 2014 will have their pension and lump sums calculated by reference to the current pay rates, that is the rates before the pay reductions which will apply from July 1st, 2013.”

Smaller pension

However, the letter sent yesterday by the Department of Public Expenditure seemed to draw a distinction between serving staff retiring before the end of August 2014 on a pension of more than €32,500 and those with a smaller pension.

“As you know, the Government has decided that all public service pensioners on pensions of €32,500 and above will be required to make a fair and proportionate contribution to the consolidation measures, with the largest reductions being borne by those on higher pension rates. To achieve this it is proposed that with effect from July 1st, 2013, an increase in the existing public service pension reduction (PSPR) will be applied to pensions in payment above €32,500 for those who retired before end-February 2012.

“In addition, a new separate rate will be introduced to apply to all those who have retired on pensions above €32,500 since March 1st, 2012, to the date on which the new reduced pay scales will take effect. The new rate will be lower than the present PSPR to take account of the fact that these pensions are based on already reduced pay rates.”

It said for serving staff who retired by the end of August 2014 on pensions of €32,500 or more, the effect of the measure would be to cut the pension by the amount of the new rate but that their retirement lump sum would be unaffected.