ARCOIreland members will have been following the negotiations leading to the publication of the Labour Relations Commission's recommendations for a revised Public Service Stability Agreement 2013 to 2016 (The Haddington Road Agreement). In particular they will be anxious to know how the agreement will impact on their pensions. ARCOIreland has been maintaining ongoing contact with Pensions’ Section of the Department of Defence to seek this clarification on behalf of its members.
ARCOIreland has been informed that the existing Public Service Pension Reductions, which have been in place since 1 January 2011, (shown immediately below for ease of reference) will continue to apply to pensions in payment prior to 1 March 2012 where the amount is currently below €32,500. So the first €12,000 is still exempt, any amount over €12,000 but not over €24,000 is reduced by 6%; and any amount over €24,000 (but not over €32,500) is reduced by 9%.
|
Annualised amount of public service pension
|
Existing reduction rate effective 1 January 2011. Currently applicable to all public servants who retired before 1 March 2012. Note: These rates will continue to apply to pensioners currently on pensions of less than €32,500 a year |
|
First €12,000 |
0% |
|
Between €12,001 and €24,000 |
6% |
|
Between €24,001 and €60,000 |
9% |
|
Between €60,001 and €100,000 |
12% |
|
Balance above €100,000 |
20% |
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The increased reduction that applies to members who retired up to 29 February 2012 and who are on pensions of greater than €32,500 will be as follows:
|
Annualised amount of public service pension |
Revised Reduction 1 July 2013 |
|
Up to €12,000 |
Exempt |
|
Any amount over €12,000 but not over €24,000 |
Increased from 6% to 8% |
|
Any amount over €24,000 but not over €60,000 |
Increased from 9% to12% |
|
Any amount over €60,000 but not over €100,000 |
Increased from 12% to 17% |
|
Any amount over €100,000 |
Increased from 20% to 28% |
This particular reduction will apply to many ARCOIreland members. While it is not possible to provide specific examples, members will be able to calculate the approximate net reduction to their own current pensions by reducing by 2% any amount between €12,000 and €24,000 per annum and so on down the table provided above. The tax that would have been payable on the pension reduction should be factored out when calculating the net monthly reduction.
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For members with pensions of greater than €32,500 and who retired after 29 February 2012 and therefore before the end of a new grace period on 1 September 2014 (and whose pensions therefore reflect pay rates which factor in the 2010 pay reductions) the reduction to be applied under this Bill will be as follows:
|
Annualised amount of public service pension |
New Reduction1 July 2013 |
|
Up to €12,000 |
Exempt |
|
Any amount over €12,000 but not over €24,000 |
2% |
|
Any amount over €24,000 but not over €60,000 |
3% |
|
Any amount over €60,000 but not over €100,000 |
5% |
|
Any amount over €100,000 |
8% |
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Pensions will NOT be reduced to below €32,500 by virtue of these amendments.
LINKS:
Below are a number of links that will be of interest to ARCOIreland members in the context of the draft legislation on the proposed public service pay and pension reductions. These include the Draft Financial Emergency Measures in the Public Interest Bill 2013 (Section 5 of which deals with pension reductions), the new draft Labour Relations Commission pay agreement (Para. 2.27 of which refers to pension reductions), as well as the ongoing general Oireachtas debate on the legislation.
