We can't trust our ministers to end pension madness
It will take 40 years to claw back money ploughed into public service benefits, says James Fitzsimons
The cost of public sector pensions increased by 65 per cent between 2005 and 2010, during the worst recession in the history of the State. Last week, Minister for Public Expenditure and Reform Brendan Howlin published the Public Service Pensions (Single Scheme) and Remuneration Bill 2011. It restricts pension entitlements for new entrants to the public service. So it will take at least 40 years before we see any savings. And then they expect it might cut the pension bill by 35 per cent.
It took five years to feather their nests, but it will take 40 to claw back half of what they grabbed. That's not good enough! Who will even remember what it was all about?
The annual cost of public service pensions was €2.235bn in 2010. In 2005 it was €1,350m. There were just over 103,000 public service pensioners in 2010, according to the Department of Finance. In 2005 there were 95,000. The number has increased by less than 9 per cent in a period when the cost rose by 65 per cent. There are still nearly 280,000 public servants and another 8,500 will take voluntary redundancy by 2012. But they will do so under the old rules based on higher salaries. So their pensions will be inflated even more.