Saturday 27 December 2014

Former leaders have cachet and earning power - why must we pay plush pensions?

Published 14/08/2014 | 02:30

John Bruton has no trouble earning a living outside of politics. GEORGES GOBET/AFP/GettyImages
John Bruton has no trouble earning a living outside of politics. GEORGES GOBET/AFP/GettyImages

Why are former Taoisigh, presidents and other senior officeholders awarded bloated pensions? So they don't have to find work as oil rig workers, clampers, sewage disposal staff, call centre operators, or any of the other jobs which feature regularly on least desirable occupation lists?

Oh, and to repay them for their services to the State. But those well-heeled pensions in a down-at-heel world are justified on the basis that former leaders shouldn't have to hawk their skills around. Pensions help protect the dignity of the title.

However, it's not uncommon for former titleholders to do the double. To take the pension, and bulk up with additional income. Sometimes, they accept a high-profile job with a salary. Failing that, there are lucrative sidelines in consultancies and after-dinner speaking.

John Bruton, who was Taoiseach from 1994 to 1997, is on a pension of €135,000. He has no trouble earning a living outside politics, and all credit to him for being industrious when he could be idle.

At 57, he resigned from the Dail to become EU Ambassador to the US, followed by chairman of the newly formed IFSC Ireland in 2010. Now 67, he remains energetic, engaged and able. No reason to put him out to pasture. His views may cause ripples, but they generate debate, which is healthy for democracy.

It seems unreasonable to suggest Mr Bruton and others like him should be disbarred from the labour force because of their public pensions. Remember, that extra income he earns is taxed at the top rate, so his work ethic benefits the Exchequer.

But it doesn't seem unreasonable to garnish the pensions of former Taoisigh, presidents, and senior ministers where they enjoy multiple income streams. If anyone pulls in fees from the private sector, simply adjust their pension accordingly.

It would be counter-intuitive to remove pension entitlements altogether when paid work is undertaken. Such a step would act as a discouragement to work. But there ought to be some trimming.

The answer is to devise a system whereby retired officeholders have an incentive to work, but the taxpayer's burden is reduced 
in proportion to their extra earnings.

When Taoisigh and presidents leave office in their prime, they can reasonably expect their services to be in demand. Former leaders can carve out successful careers on the world stage. They belong to an exclusive club, after all: members command high prices.

To that cachet, with its earning potential, are citizens really obliged to add plush pensions? Some pension contribution, by all means, but in Ireland what is bestowed is immoderate.

Former presidents Mary Robinson and Mary McAleese were entitled to just under €135,000 and €141,000 respectively in 2012, the most recent year for which figures are available. They served the State well.

Even so, at 63 (Ms McAleese) and 70 (Ms Robinson) they are relatively young and healthy, and in a position to earn money easily if they choose.

Senior officeholders in Ireland have an umbilical attachment to their pensions. It was with some difficulty that a number of them were prised free of their multiple Oireachtas pensions. Pensions remain high by international standards. While some gave back small sums in 2011, none of the retired ministers surrendered any entitlements in 2012, according to Department of Finance figures. President Michael D Higgins handed back his €37,000 ministerial pension, however, while Ms Robinson gave something back in 2011.

If we look at our nearest neighbour, we can see not everyone draws a pension from the public purse simply because it is their legal due.

Gordon Brown and David Cameron both announced they were giving up the perk when they entered 10 Downing Street.

Here, all five former Taoisigh continue to claim pensions, along with a host of senior officeholders. Mr Bruton is the most active and visible of the former Taoisigh. Little is heard from Brian Cowen, but Bertie Ahern has been involved in peace talks in Ukraine as an unpaid facilitator with Crisis Management Initiative. That's an appropriate use of his undeniable negotiation skills, and a way for him to take steps to restore his reputation.

By all means, let senior officeholders do such voluntary work. But where they earn money, it would be appropriate for some of their pensions to revert back to us.

Let's not leave it up to an individual's conscience, though. Changing the law strikes me as more transparent, as well as more prudent.

Irish Independent

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