Kevin Myers: Predatory cycle of golden handshakes will ruin us all
The substantive issue is not the pension of a few Fianna Fail politicians, but of the public sector pensions. While the public service lives in a different world from the rest of us, we shall endlessly be in an incipient state of civil war. No resolution is possible within this apartheid economy.
Civil servants upon retiring are given a lump sum equivalent to 150pc of their salary, tax-free. For senior civil servants, this can amount to several hundred thousand euro. Even for school teachers, this can be life-transforming: one teacher I know was able to buy a holiday-home in France with his gratuity.
This tax-free capital transfer is not paid for by extra contributions made by the public servant. Indeed, the opposite is the case. Up until the mid-1990s, public sector employees paid PRSI at half the rate of private sector. Public servants who joined after the mid-1990s then had to pay the higher rate of PRSI, but those already employed by the State -- including such stellar characters as Rody Molloy and Patrick Neary, who took early retirement after screwing up, but were allowed to enjoy full, huge golden handshakes, as if they had successfully served their full career to retirement age -- continued to pay the lower rate of PRSI.