Public sector pensions bill for next 60 years will be €116bn
Published 28/09/2012 | 05:00
A €116bn public sector pensions' timebomb has been identified in a report by taxpayers watchdog the Comptroller and Auditor General.
The staggering cost of pensions for state employees is the estimated bill for the next 60 years, according to yesterday's report, which quotes sums dating back to December 2009.
It also calls for a thorough review to be carried out every three years.
The Comptroller wrote: "The Commission on Public Service Pensions recommended in 2000 that actuarial reviews of public service pension schemes and projections of public service pension outflows should be carried out on a three-year cyclical basis. Regular reviews have not been undertaken."
A public servant with a full 40 years' service is entitled to a tax-free lump sum on retirement of one-and-a-half-times their final salary and a pension of half their salary at retirement.
Some public servants have ended up earning more in retirement than they did when they were working because benchmarking pay rises were also awarded to those in receipt of pensions.
New entrants to the public service will get smaller pensions as their salaries will be lower and the retirement payments will be based on average earnings over their career rather than their final salary.
The report also says that over the past five years about a third of overpayments were down to fraud.
The bill for fraud last year was €35m, but the "rate of recovery . . . is not known".
The report also says that hundreds of retired public servants have been re-hired at a cost of almost €80,000 each.
Some €924,571 has been spent re-employing 91 civil servants, with one in the Department of Agriculture earning €78,500 last year. Nearly 700 staff have been re-employed by the HSE at a cost of €11.6m.
Some €395,000 was paid in bonuses to staff in the Revenue Commissioners, Office of the Ombudsman and Department of Social Protection.