“The new single pension scheme for the public service is good in principal but it will be at least 40 years before we know if it is actually good in practice,” said Fianna Fáil’s Public Expenditure and Reform Spokesperson Seán Fleming TD.
Deputy Fleming said: “The scheme will only apply to new entrants into the public service and will create a more direct link between public servants final pension and their contribution to their pension during their working life.
“The Minister has not made clear how much this new arrangement will reduce the public sector pension bill in the years to come. It is clear that the biggest losers will be those public servants who work their way up through the service through promotion during their careers and end up on a reasonably high salary at retirement age. Their pensions under this arrangement will be a lot less than under current rules as it will be based on their average earnings during their career.
“For many other public servants who stay on the same grade or do not get major promotions for example nurses, teachers, Gardaí, soldiers and others they will also suffer a cut to their pensions but not to the same extent.
“The idea of linking increases in pensions after a person retires to increases in inflation rather than to increases in public sector pay is a double-edge sword. For example in times like now, public sector pay increases are not keeping up with inflation and under these new arrangements people on pensions in the future would be getting larger increases than those still working in the public service.”