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Pension costs soar by €11m at farming state body

PENSION costs at state body Teagasc have soared even though it has slashed its pay and non-pay costs.

New figures from the farm advisory body show that pensions are an ever increasing part of current expenditure, soaring by a third from €33m in 2008 to €44m this year.

That means paying pensioners now swallows up 27pc of its annual spend, up from 18pc in 2008.

That's even though the organisation has managed to cut its pay bill from €96m to €72m in that time, while reducing non-pay costs from €59m to €50m.

The organisation now has more pensioners than employees, having slashed its workforce from 1,574 in 2008 to 1,189 now, while the number of retirees has grown to around 1,500.

The number of pensioners is expected to increase as Teagasc will also have to shed up to 300 more staff over the next three years to meet government targets, through retirement, redeployment and voluntary redundancies. That will bring the total numbers employed to under 1,000 by 2015.

Professor Boyle said their high pension costs were similar to the rest of the public service but were shown very transparently as they were paid by Teagasc directly from its government grants, instead of coming out of the general pension pot used to pay most public service retirees.

Its overall pension liability rose by €57m last year alone to reach €937m.

However, there was no threat to these pension payments as they were guaranteed by government in the same way all public sector pensions are, he said.

Teagasc's primary objective had to be to maintain core services and it had managed to do this over the last few years by working within the funding constraints, Professor Boyle said.

It had shut 40 offices to reduce costs since 2009, nearly half its total, but is still providing advisory services to 40,000 farmers, with a greater emphasis on group advice and technology to overcome staffing reductions.

Its total income last year was €173m, and nearly a third of that came from client fees and levies, the remainder coming from the government.

Farmers had strong growth in incomes last year but 2012 will be more difficult, mainly because of weather related problems, Professor Boyle said.

Irish Independent