Deadline to avail of public pensions at pre-emergency cuts level extended

The Government has extended, by a year, the deadline before which public servants must retire if they want to receive a pension based on the terms and conditions they had prior to the introduction of emergency financial legislation.

The deadline had been set at August 2014. It was then extended to June 2015. Yesterday, Public Expenditure Minister Brendan Howlin moved it back to June 2016.

His department said that if no extension was granted “it could prompt the retirement this summer of substantial numbers of staff at senior levels, including office holders, medical and other specialists, as well as those at managerial ranks”.

“The new expiry date of June 2016 was chosen to minimise impacts on schools, in particular, and it also coincides with the expiry of the Haddington Road Agreement,” said Mr Howlin.

“Concerns have been raised with me by both public service management and unions regarding the potential impact of the loss of key managerial and specialised staff at a single point in time where many would, in any event, need to be replaced to maintain vital front-line services.

“Such an exodus of senior staff would also carry with it the short term financial effect of once-off superannuation costs.”

Section 9 of the Financial Emergency Measures in the Public Interest Act 2013 let public servants with a preserved pension benefit calculate their gross superannuation benefits on the basis of the pay rates that applied before the passing of the Act.

Public service pay rates for some staff were reduced in July 2013 by 5.5% or more. Retiring within the extension period will allow an affected public servant to benefit from superannuation calculated at the pre-cut pay level. However, the pension is then subject to a reduction under the same legislation of between 2% and 5%, which reduces the benefit.

Trade unions have welcomed the extension.

Shay Cody, general secretary of Impact trade union, said: “This decision takes some pressure off public services where a mass exodus of experience and expertise could have a negative effect on the delivery of services.

“It also takes pressure off individual workers who are in the process of planning their retirement, and allows them the scope to consider their plans without the threat of a loss of income hanging over them.”