THE ENORMOUS gap between ministerial pensions and private pensions has been dramatically outlined in research which shows a self-employed person would have to pay €20,000 each month into their pension fund to achieve a pension equal to that of a minister.
A TD only has to serve as a minister for 10 years before he is entitled to his full €114,600 annual, index-linked pension upon retirement. Ministers are also fully entitled to retire aged 50 and are not obliged to wait until 65 before they can claim their entitlement.
Having viewed the research completed by the Independent Trustee Company (ITC), Irish Brokers Association (IBA) has slammed the Government’s policy on pensions saying the contrast between Government perks and self-employed entitlements was staggering.
The ITC research shows it would cost a self-employed person €35,000 per month over 10 years to generate enough money to retire at 50 on a €114,600 pension.
If the same person was to hold off on retirement until he was 65, it would still cost him €20,000 per year over 10 years to retire on a similar annual salary.
CEO of the Irish Brokers Association Ciaran Phelan said that it is astonishing that taxpayers are paying such vast amounts towards ministerial pensions, yet politicians have suggested that private sector tax relief on pensions could be dramatically reduced. He said the contrasting attitudes “makes no sense whatsoever”.
“At one end of the spectrum you have the politician’s pension scheme with its enormous pension benefits and massive taxpayer subsidy. And at the other end is the self-employed guy whose pension plan is under-funded and poorly subsidised. Current policy is to reduce the subsidy to the self-employed guy further whilst leaving the pension benefits of ministers untouched. In a fair society, this makes no sense whatsoever,” he said.
The Independent Trustee Company (ITC), who completed the research, stated that one minister’s pension entitlements would cost the taxpayer up to €6.9m, if the minister was to retire at 50. If the minister was to retire at 65, as is more normal, the taxpayer would still have to provide €3.9m over the course of his retirement.
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