Thursday 22 August 2019

Payment rises linked to salary grade

Since 2012, a link between pensions and inflation was brought in for pensions awarded to new-entrant public servants hired from the start of 2013 (Stock photo)
Since 2012, a link between pensions and inflation was brought in for pensions awarded to new-entrant public servants hired from the start of 2013 (Stock photo)

Anne-Marie Walsh

Most public servants' pensions are based on their final salary in the job. However, more recent entrants' pensions are calculated on their average wage during their career. Their annual pension, if they have full service, is based on half their salary and they get a lump-sum payment worth one-and-a-half times their pay.

When they retire, their pensions increase in line with the grade from which they retired. This is known as pay parity.

However, under legislation since 2012, a link between pensions and inflation was brought in for pensions awarded to new-entrant public servants hired from the start of 2013.

Under the same legislation, it is possible to break the link between pay and pension rises for existing staff as well and tie them to consumer prices instead.

The issue of pension increases has not been high on the government agenda as pensions have been cut by a Public Service Pension Reduction since 2011 - with those on higher pensions paying proportionately more.

The cuts are being partly reversed in three stages up to January 1, 2018. When fully rolled-out, the changes will mean that all public service pensions up to €34,132 will be fully exempt from the cuts.

Irish Independent

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