Public sector faces exodus as staff try to avoid cuts
'7,000 planning early retirement' to take advantage of pension deals
Published 14/08/2011 | 05:00
THE public sector is expected to be hit by an exodus of an estimated 7,000 staff as workers plan to retire before cuts to their pensions are introduced in February.
More than 1,500 gardai are expected to take early retirement, while another 1,000 teachers are expected to follow suit. The health and social welfare sectors are also expected to be heavily depleted by retiring staff.
Department of Finance sources estimate that between 7,000 and 8,000 staff will have quit the public service in the year to February 2012 to avail of the better pension deal -- far in excess of earlier forecasts of 3,000.
The reason for the exodus is that the Government is allowing public servants to retire on pensions linked to the salaries they earned before the budget cuts. According to the Department of Finance, public sector salaries have been cut by 14 per cent and pension lump sums will be taxed from February 29.
The Government introduced the "grace period" for the pension cut to encourage the reduction in numbers in the public service. The Government must cut €1.2bn from the public pay roll as part of the bailout package.
Opposition politicians such as Fianna Fail's Sean Fleming have expressed concerns that the departure of so many senior staff will leave cracks in the system.
Public servants were told last month they must give three months' notice of their intention to retire, in anticipation of the large numbers expected to avail of the scheme.
A circular to personnel officers dated July 6 said that in order "to protect services, it is critical that management in the civil service have knowledge of the numbers of staff retiring and the business areas that will be affected by potentially large-scale departures".
Gardai have been told they must submit their intention to retire by November 28 and up to 1,500 are expected to take up the offer. That would reduce the strength of the force to around 12,000, the level it had been at before the last government's recruitment drive in 2008 and 2009 when garda numbers reached a record of more than 14,000.
After 30 years of service, an officer of garda rank receives half his or her salary, currently at €58,822 and a tax-free gratuity of €79,232 on retirement. For most gardai with 30 years' service who are entitled to retire on a pension of 50 per cent of final year's salary, the cuts to their gratuity would mean a loss of €5,000.
The concerns about losing so many high-ranking and experienced gardai caused the previous government to delay introducing the pension cut, but the IMF and EU demands for public spending cuts have put the Government under pressure to introduce them.
In 2009, a record 800 gardai -- more than half beneath the compulsory retirement age of 60 -- retired, leaving unprecedented number of vacancies at senior rank, which are still being filled. Many experienced officers have left in the past two years, particularly from the detective ranks.
Experienced gardai say the loss of so many senior officers will also mean that the recent trend of having entire units comprised of gardai under the age of 30 will continue.
Gardai say that many of these young guards, particularly in Dublin, are under considerable pressure as many bought houses or apartments well outside the city during the boom years and are under financial as well as work-related stress.
Public Expenditure and Reform Minister Brendan Howlin told the Dail recently he expected to know by September of the numbers who would leave under the scheme.
"I would be confident that the 3,000 figure will be very significantly exceeded," he said.