Thursday 21 September 2017

Public servants face paying more to keep pensions

Minister Paschal Donohoe. Photo: Tom Burke
Minister Paschal Donohoe. Photo: Tom Burke

Anne-Marie Walsh

Public servants face paying far more in pension contributions if unions insist the final value of their retirement packages must be untouched.

The public services committee of the Irish Congress of Trade Unions met yesterday to discuss its strategy on pensions at the upcoming talks.

It is understood the union leaders are expecting the issue of higher contributions to be raised early at the talks - but will insist the final value of pensions is retained.

Making higher contributions in return for preserving the value of pension pots at retirement time could be a quid pro quo at the pay talks on a new deal to extend the Lansdowne Road Agreement.

The Government is adamant pension reform is needed and there is a growing acknowledgement behind the scenes that public sector workers must contribute more.

Now Impact has told its members that Public Expenditure and Reform Minister Paschal Donohoe is likely to seek higher contributions to cover the cost of their retirement benefits under any new public sector pay deal. It said the department gave different assessments of pension costs to the Public Service Pay Commission.

"And the minister has indicated that he will seek increased contributions to the cost of pensions as Fempi (emergency legislation) is unwound," said union official Bernard Harbor.

He said recent official figures showed public servants earned less than private sector workers, when a pension levy imposed during the financial crisis is taken into account.

This data would be "useful" at the upcoming talks, he said.

"However, the value of public sector pensions and the contribution that public servants make towards their retirement income will be a major issue of contention in the talks," he added.

Read more: Public servants to lose up to €100,000 in reform of 'gold-plated' pension system

Union leaders have argued that public servants already pay PRSI and 6.5pc in superannuation contributions. The pension levy represents a further 10pc or 10.5pc contribution on earnings above €28,750 a year, said Mr Harbor.

He said unions also pointed out that staff who joined the public service since 2013 have significantly reduced pension provision.

"Both sides are anxious to conclude the negotiation as quickly as possible so that any agreement can be balloted and, if accepted, reflected in next year's budget calculations."

The Irish Independent revealed last week that the Public Service Pay Commission - which is due to report shortly - is set to back an increase in pension contributions.

Meanwhile, the Government has been warned that moves to target 300,000 public service workers' pensions just as they are heading for retirement are in breach of the Constitution.

Labour leader Brendan Howlin pointed to a report in this newspaper which noted that big changes on how public service pensions are calculated will be part of upcoming talks on public pay.

Mr Howlin said a change to the pension regime for new recruits would be fair. But people coming up to pension age - many of whom had worked up to 40 years in the public service - faced big pension cuts which were illegal and unfair.

Taoiseach Enda Kenny said the Fine Gael party had always respected public servants' work. He said a report of the special Commission on Public Pay was now awaited.

Irish Independent

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