Raising retirement age first step in defusing time bomb

CHARLIE MCCREEVY took the first steps yesterday to defuse the public pension time bomb by raising retirement ages for new entrants to certain public service jobs, but leaving arrangements for existing public service employees unaffected.

He also brought in provisions to allow new entrants to the public service to stay on in their jobs after they reach 65.

Perhaps with one eye on the resistance faced by continental governments in raising retirement ages, the minister decided against making any changes that would affect those already working in the public service. The new provisions will apply only to those who join the public payroll from April 1 next year.

New gardaí and prison officers face a minimum pension age of 55. New gardaí will also face a compulsory retirement age of 60, but will be subject to annual fitness certification from 55. Currently, gardaí can retire after 30 years’ service once they are over 50, and the compulsory retirement age is 57.

New civil servants, teachers, local government officials, healthcare workers and staff in non-commercial State-sponsored bodies will face a minimum pension age of 65. New entrants to the Defence Forces will get a new pension scheme and a minimum pension age of 50.

The minister said these measures would not yield benefits until the first crop of new recruits retired in 30 to 40 years’ time. He predicted they would save up to 300 million each year at that stage.

The Government decided against implementing recommendations from the Commission on Public Service Pensions that would have introduced an extra 1% pension contribution from existing employees or using a new index to determine pension increases.

Outside the public service, most pensioners can look forward to an extra 10 a week from January.

The increase applies to those in receipt of old-age pensions, retirement or invalidity pensions, or death benefit.

Also benefiting by the same amount are those receiving in receipt of disablement and blind pensions.

Widows and widowers over 66 will get an extra 11.50 per week, bringing their payment in line with the old-age pension, while those under 66 will get 10.

The increases will be applied pro-rata for those in receipt of reduced rate pensions. Under the new arrangements, the contributory old-age pension will rise to 167.30 per week.

There was also limited good news for those over 65 who continue to work. The minister raised the tax exemption limit for a single person by 500 to 15,500 and by 1,000 to 31,000 for a married couple.