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Tuesday 24 October 2017

Retirees will not escape axe as pensions fall 4pc

Anne-Marie Walsh Industry Correspondent

RETIRED public sector workers, including former politicians, judges and hospital consultants, will suffer a cut in their pensions.

Their pensions were not cut last year, even though they are linked to the pay of existing public service workers who suffered an average 6pc reduction in income.

Under the four-year plan, legislation will be brought in before the end of the year to reduce public sector pensions by 4pc on average.

Pensioners on more than €12,000 a year, including former TDs, retired members of the judiciary and their survivors, will be affected by the change. The reduction does not apply to the first €12,000 of a yearly pension, but after that the rates are:

•6pc between €12,001 and €24,000.

•9pc between €24,001 and €60,000.

•12pc above €60,001.

The plan says: "Given the budgetary constraints, the Government considers it appropriate that some public service pensioners contribute to the required adjustment".

It noted there was a "gap" between the burden on public servants -- who suffered the pension levy and pay cut -- and those who were retired.

Commenting on the new measure, Labour spokesperson Pat Rabbitte said he believed there was a "certain unfairness" about people who retired on very high incomes in the last few years continuing to enjoy pensions fixed to salaries they were on three years ago, when pay was at a peak.

However, savings made will be offset to a large extent by increased pension costs due to the plan's target to reduce public sector numbers.

The plan estimates that pension costs for public servants will rise by 13pc to exceed €3bn in 2014. Pensions now account for almost 15pc of the total pay bill, having risen from €1.35bn in 2005 to €2.8bn this year.

Irish Independent

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