FINANCE Minister Michael Noonan, who is suffering a public backlash after imposing the controversial private pensions levy, will be able to pick up a pension of just under €2,000 every single week within two years.
Leading firm IFG Corporate Pensions said that under existing rules, any TD who serves a decade or more as a Government minister is automatically entitled to receive 60% of their existing salary as a pension every year.
As the current ministerial salary is €181,000, this equates to an annual defined benefit pension fund of €120,000 — which amounts to €10,000 every month. Anyone who meets this criteria will be handed €8,333 by the state every month. This equates to €1,923 in pension payments every week.
Mr Noonan, 67, has already served eight years as a minister since the early 1980s. This includes terms as Justice Minister (December 1982-February 1986), Industry and Commerce Minister (February 1986-March 1987) and Health Minister (December 1994-June 1997). Provided the current Fine Gael-Labour coalition remains in power, in November 2013, the Finance Minister will be able to access the mammoth ministerial pension if he retires after this date.
“The Government’s generosity to themselves and unfair treatment of private sector pensions will further decimate the gap between the middle-income earner and those in ministerial and other senior political positions,” IFG corporate pensions director, Fionán O’Sullivan, warned.
Of the current cabinet only Mr Noonan will be eligible for the pay-out during this Dáil term.
He will also be eligible for a tax-free lump sum payment of €200,000 under the 10-year service ministerial pension scheme.
While the situation is in stark contrast to those being affected by the private pensions levy — who will lose an average of €500 a year over the next four years from their fund — it is also significantly higher than what the average public service worker can expert in old age.
According to the fourth quarter 2009 Central Statistics Office (CSO) earning report, the average public service worker receives a salary of €50,000. With an employee contribution of 5% and 40 years of service, the estimated monthly pension to be obtained is €469 — the equivalent of €117 a week — with a tax free lump sum payment of €37,500.
The value of the average public service worker’s pension fund will be €150,000.
The figures emerged as Taoiseach Enda Kenny admitted some high-earning private workers will escape the controversial private pensions levy.
He confirmed that people who hold “approved retirement funds” will be excluded from the scheme as they are technically not classed as pensions.
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