THE GOVERNMENT’S decision to apply a second cut to public service pensions over €100,000 will save the exchequer just €400,000 a year, according to Minister for Public Expenditure and Reform Brendan Howlin.
Mr Howlin admitted the savings involved were modest but said the change was being introduced in the interest of fairness and the public interest. “In the circumstances the country finds itself, those with the broadest shoulders should bear the greatest burden,” he told the Dáil last night.
The measures will affect about 250 retired taoisigh, ministers and judges as well as heads of semi-States and universities and Garda commissioners. They will see their pension entitlement above €100,000 reduced by 20 per cent, on top of a 12 per cent reduction on pensions above €60,000 which was introduced last January.
The reduction will knock just over €5,000 off former president Mary McAleese’s pension of €162,754 and almost €4,200 off former taoiseach Bertie Ahern’s pension of €152,331.
The change is being introduced in the Seanad by way of amendment to a 2010 Bill on public expenditure before being brought back to the Dáil.
The Government had asked Attorney General Máire Whelan to advise on whether the proposed reduction could be considered fair and proportionate and whether it was justifiable given the relatively small amount of money it would save.
Mr Howlin said Ms Whelan had advised that the pension rights were vested property rights which had already been earned, but he pointed out that these rights had already been affected by the earlier pension cut.
He said the measure would not solve the country’s “extraordinary” problems of borrowing and indebtedness but argued it was just and equitable in the circumstances and would reinforce principles of fairness and leadership.
A former public servant on a pension of €125,000 a year would see a cumulative reduction in his or her pension as a result of the two cuts of €13,760, or 11 per cent, Mr Howlin said. Someone on a €150,000 pension would suffer a cut of €18,760, or 12.5 per cent.
After taxes, a person on a €125,000 pension would still receive a net take-home amount of €71,716, he told the Dáil.
Sinn Féin said the Minister should have capped public pensions and banned the payment of public pensions to people in employment. Public expenditure spokeswoman Mary Lou McDonald accused Mr Howlin of once again failing to tackle bumper pensions for “high rollers” in the public service.
“In real terms this means former taoisigh Bertie Ahern and Brian Cowen’s annual pension payment will be reduced by a mere €4,000 leaving both in receipt of a pension to the tune of a massive €147,000 each year.”
Fianna Fáil said the Government should go further by cutting public sector salaries as well as pensions.
Figures published last month show that 30 former politicians are receiving pensions over €100,000, while more than 100 senior civil servants are in the same bracket. Thirteen former Supreme Court and High Court judges are in receipt of pensions over €100,000.
After Mr Ahern, the highest political pensions are paid to former taoisigh: Brian Cowen, on €151,061; Albert Reynolds, who is getting €149,740; and John Bruton, on €141,849.
The pensions payable to former politicians and public servants have been a subject of controversy since former secretary general of the Department of the Taoiseach Dermot McCarthy stepped down earlier this year with an annual pension of €142,670, plus a lump sum of €428,011 and a special severance payment of €142,670.