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Sunday 20 August 2017

Civil servants won't pay more for pensions under new pay deal

There was mounting speculation that those with gold-plated benefits could end up paying more than they currently do in existing contributions and pension levy payments. (Stock photo)
There was mounting speculation that those with gold-plated benefits could end up paying more than they currently do in existing contributions and pension levy payments. (Stock photo)

Anne-Marie Walsh

Public servants will not pay any more than they currently do for their lucrative pensions in a new deal with the Government.

Sources revealed any amount they will be asked to pay into a new permanent contribution will not surpass the €720m currently being paid under a pension levy.

The Government is likely to agree that the pension levy - introduced under emergency legislation in 2009 - is phased out at talks to extend the Lansdowne Road deal.

Instead, it will ask its employees to pay a higher permanent contribution that would include their existing contribution.

There was mounting speculation that those with gold-plated benefits could end up paying more than they currently do in existing contributions and pension levy payments.

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But senior sources revealed that the contribution is unlikely to exceed the €720m currently paid in a levy.

Unions do not expect Government officials to look for more than the levy, which averages 5pc of wages.

The most likely scenario is that the Government will only end up with a portion of the current value of the levy when a deal is struck.

Sources also revealed that unions will push for a watertight guarantee that the Government will not come back in future seeking pension cuts if they agree to a higher permanent pension contribution.

They will also seek to have earnings that are not pensionable, including overtime, exempted from contributions.

The source predicted that no public servant would end up suffering a cut in remuneration as a result of any deal.

However, those on lucrative fast accrual pensions who can retire on a full pension in a shorter timeframe than other public servants, including gardaí and judges, will be asked to pay most.

Recent recruits - who joined the public service on a far less beneficial scheme since 2013 - may have the levy lifted altogether.

Gardaí are among 23,000 workers who enjoy the best gold-plated retirement benefits in the public sector.

They have fast accrual pensions that mean they qualify for a full pension in a much shorter timeframe than the 40 years most workers have to serve.

Targeting these could wipe out part of the €50m pay deal they won last year.

Meanwhile, judges have suggested they may take legal action over pension cuts that left younger judges on worse pensions than their longer-serving colleagues.

In a submission to the pay commission, the Association of Judges of Ireland said they had noted that a successful case was taken by judges in the UK in relation to similar pension cuts.

It said the fact that new appointees have to serve two years on lower salaries than colleagues sitting in the same courts as "anomalous and deeply unsatisfactory".

It said the pre-cut salary of a High Court judge was €243,080 and €147,961 for a judge in the District Court. Those appointed today would be on salaries of €172,710 and €114,771.

"Judges hope that the merits of their situation will be recognised and that individuals will not be tempted to initiate similar litigation," said the association.

"Most judges were appointed at a time when the Constitution contained an unqualified guarantee that the remuneration of a judge would not be reduced during his or her continuance in office," it said.

It said although that had since been modified, this was for a limited derogation only. "Judges are entitled to look to the guarantee under which they were appointed," it said.

Judges are also among the groups on fast accrual pensions who are likely to be targeted to pay a higher permanent pension contribution.

Irish Independent

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