Garda pension worth €1.1m
THE cost of buying a garda's pension on the open market would amount to €1.1m, new figures reveal.
But the garda will only have contributed €110,000, or 10pc, to their pension even after the imposition of the pensions levy, according to research carried out by actuary Fiona Daly of Rubicon Investment Consulting.
This means that ordinary members of the force are effectively retiring as millionaires, pensions experts said.
The State will have provided 90pc of their pension pot, or €1m, once account is taken of tax relief, Ms Daly said.
Gardai are unusual in the public sector as they can retire on full pension at the age of 50. The calculations are based on a garda who joins the force after changes made to pensions arrangements in 1995 and retires on a salary of €52,822.
On retirement after 30 years the garda is entitled to a tax-free lump sum of €79,233, and an annual pension of €26,411.
Ms Daly said the value of this retirement lump sum was €1.12m, of which the State will have contributed €1m.
Pensions experts said the most an employer in the private sector was contributing to a employee's pension fund was 20pc.
"No-one in the public sector is contributing anything like the value of their pension fund, even after the pension levy is taken into account," Ms Daly said.
The imposition of the pension levy has proved hugely controversial, with off-duty gardai marching in protest on the Dail recently.
The figures, which Ms Daly initially compiled for the 'Today With Pat Kenny Show' on RTE Radio, also show that a secretary general in the civil service will retire with a pension pot worth an incredible €3.3m.
But this person will only have contributed a total of €176,000 (equal to 5.3pc) to the pension, even after the imposition of the pension levy.
This person spends 40 years in the service and has a starting salary of €24,397 and retires with a salary of €227,912.
The secretary general is entitled to a tax-free lump sum of one-and-a-half times their salary, or €341,868. Their annual pension would then be €114,000.
The State will contribute €3.12m to the secretary general's pension, or 95pc of the value of the pension pot, according to the Rubicon calculations.
The value of pensions for senior public servants, such as government ministers, secretaries general, judges, university presidents and other senior state workers, are among the most generous in the world.
So generous are these pensions that the Review Body on Higher Remuneration in the Public Sector Report in September 2007 decided it would have to recommend a pay cut if it took account of the true value of the pensions.
That report stated: "If the Review Body were to apply a greater discount to these groups than to groups in receipt of standard [public sector] pension terms, this would effectively cancel the value of the special terms by reducing salary to take account of them."
The Rubicon figures also show that a clerical officer who joins the service on a salary of €24,397 and retires on a salary of €39,568. This officer would have a tax-free lump sum of €59,352 and a pension of €19,784.
The pension pot of this worker would cost around €570,000 to buy on the open market.
- Charlie Weston Personal Finance Editor
