Daniel McConnell: 'Rolls Royce' pensions face slash
Senior civil servants, semi- state bosses and members of the judiciary face major reductions to their 'Rolls Royce' pensions in the Budget, under drastic plans being considered by the Government, the Sunday Independent can reveal.
The proposal has come on foot of mounting public anger and increased unease on the Government backbenches over recent huge pension pay-offs to senior civil servants.
If included in the Budget, recently retired public bosses like Dermot McCarthy, who received a pension package of €713,000, and Director of Public Prosecutions James Hamilton, who received a net pension lump sum of €319,315 and will receive an annual pension of €114,840, will be subjected to the new reduction.
Ministers are acutely aware of public outrage over such large pension payments and the proposal is an attempt to ensure the Government has sufficient "moral authority" to impose €3.8bn in spending cuts and tax increases on an austerity-weary public in nine days' time.
The new proposal will not affect lower to middle income State employees, and is solely for those at the very top of the public sector, senior government sources have said.
News of the proposal comes as we today reveal the recently retired head of An Bord Pleanala will receive a pension package of almost €500,000 this year. He stepped down several months ago.
John O'Connor received a pension lump sum of €364,617 when he left and will receive an annual pension of €121,539 for the rest of his life.
The drastic proposal was brought forward by Public Expenditure Minister Brendan Howlin's department. Attorney General Marie Whelan is currently working on the legal mechanisms about how such a clawback would operate, but the measure is to apply to annual pension payments and not lump sums.
Last year, the previous Government introduced the Public Service Pension Reduction which came into effect on January 1. In that, a reduction of 12 per cent on pensions over €60,000 was applied to existing pensioners. Under the new proposals, higher civil and public service pensioners, including members of the judiciary, on pensions over €100,000, will be subjected to a new higher reduction rate.
Senior government sources have told this newspaper that while the matter is "legally problematic" there is a real intent on behalf of ministers to bring "equity" at a time of real hardship for the Irish people.
"This is a move that focuses in on the highest earners in the public sector. It is legally very tricky to isolate one cohort of people for inclusion," one senior government source said.
The proposal will apply to all existing pensioners up until the end of the grace period at the end of February, meaning those who have retired this year on substantial pensions will be subjected to the new measure.
Former secretary-general at the Department of Jobs, Enterprise and Innovation Sean Gorman retired on a package worth €634,087.
Last week, it emerged that the soon-to-retire secretary-general of the Department of Education, Brigid McManus, will receive an annual pension of €114,000 for the rest of her life, despite being just 53. She will also receive an after-tax lump sum of €204,000 though she waved an additional severance payment of €126,817.