Public servants protected against pension-age rise
Unpopular change only applies to private workers
CONTROVERSIAL rule changes that delay the payment of the State pension do not apply to public servants, it has been discovered.
Thousands of workers in the private sector are being forced to draw the dole as their employers force them to leave work at the age of 65. The State contributory pension is now only paid from the age of 66.
But the Irish Independent can reveal that public servants are immune from the rule change. Pensions experts said it showed the State had one rule for its own and another for the rest. It has emerged that public servants get a “supplementary pension” until they qualify for the State contributory pension at the age of 66.
This is despite public servants recruited since 1995 being part of the pay-related social insurance (PRSI) system that funds State pensions.
And they get the full supplementary pension payment even if they do not have sufficient PRSI contributions to give them the maximum State pension.
The Department of Public Expenditure has confirmed the existence of the “supplementary” pension, which is basically a substitute State pension until public servants reach the State pension age. Pension experts said this meant that public servants have insulated themselves from the decision to raise the State pension age.
And the issue is set to become more pronounced, as private sector workers retiring from 2021 will have wait until they are 67 to get the State pension of €227 a week. For those retiring after 2028, the contributory pension will not be paid until they reach 68, with suggestions it may rise to the age of 70 in the coming years.
The revelation means all categories of public servants are effectively protected from the extension of the State pension age, and the averaging test for the State pension. The Irish Independent can reveal: ■ Public servants recruited before 1995 do not pay PRSI. This means their pension is not integrated with State pension, so they do not face having to wait until they are 66 to get their full entitlements.
■ Those recruited between 1995 and 2013 can get the “supplementary pension”, as long as they are not working. This is effectively a substitute for the State pension, paid as soon as they retire.
■ And public servants recruited after 2013 have a guaranteed job until State pension age. This means they do not have to retire at 65 and claim bobseekers’ benefit until the age of 68.
Kevin Coghlan (inset) of the Association of Pension Trustees, the representative body for administrators of pensions, said he is increasingly concerned that pensions reform has been focused by the State on the private sector.
Mr Coghlan said: “The information you have uncovered is extremely disappointing and shows, yet again, the State has one pension rule for its own and one for the rest of us who live in the harsh
er realities of private sector life.”
He accused the Government of refusing to address “the outlandish cost of pension provision for their employees and yet they are prepared to consider attacks on private pensions and their tax reliefs”.
A spokesman for the department said: “In certain circumstances, civil servants whose pension is integrated with the State pension may qualify for a supplementary pension to make up the difference between the amount of the occupational pension to which they are entitled and the amount they would have received if their occupational pension was not integrated.”
Separately, Cabinet figures have signalled imminent plans to address the pensions anomaly that has left tens of thousands of women out of pocket.
Rules introduced in 2012 resulted in 35,000 women being hit with reduced pensions because they took time off to look after their children. Yesterday, Taoiseach Leo Varadkar and Children’s Minister Katherine Zappone said they were confident solutions could be brought forward to address the issue.