Public service pensions bill rises to €129bn

THE total cost of paying public service pensions has risen to €129 billion despite government measures aimed at reducing the soaring pensions bill.

The bulk of the public pensions time-bomb has increased by 7.4% or nearly €9bn in one year, new figures reveal.

According to &C&AG, the rise in the public pension costs can be blamed on lower discount rates maintaining schemes as well as a rise in the numbers retiring.

The financial burden on the state of providing for the retiring citizens in public employment is spread across several sectors.

The largest sector with pension liabilities now is teachers (€30.9bn) followed by health (€24.3bn) and the civil service (€14.2bn).

Other public sectors with high occupational pension liabilities include the Gardaí (€8.9bn), the Defence Forces (€8.8bn), non-commercial state bodies (€7.6bn) and local authorities (€7.3bn).

The C&AG found that the total cost of the public servants pensions bill was estimated at €116.4bn at the end of last year.

But when entitlements of public servants who pay full rate PRSI are added, the bill rises to €129bn, he found.

The report also found that while the Government had taken measures to reduce public servant pension costs in March last year by reducing amounts paid into schemes, the saving only amounted to €837 million for that year.

Meanwhile, the C&AG report also reveals the actual amounts in the National Pension Reserve Fund are far below what is needed to meet future social welfare costs and public service pensions.

The fund at the end of 2009 was valued at €22.3bn.

The fund is expected to contribute to paying pension costs from 2025 to the year 2055.

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