Warning that Government plan to cut public pensions would be unconstitutional

Governmental plans to cut public-sector pensions would be unconstitutional the Dáil has heard.

Public-sector unions are vehemently opposed to asking workers to contribute more towards their pensions or to changing payments to link pensions to the rate of inflation.

It is understood that the Government wants to make significant reforms to public pensions when they renegotiate the Lansdowne Road Agreement.

Talks on a new pay deal are expected to begin in the next two weeks after the Public Service Pay Commission publishes its report.

Currently, public servants who joined before 2013 receive a pension based on their final retiring income and the number of years’ service. Those who joined the public service after 2013 get a pension which is calculated on the average they earned over their entire career, this is referred to as a career average system. This model could be rolled out to all workers in a bid to address “gold-plated” pensions.

However, Labour leader Brendan Howlin, yesterday told the Dáil such a measure would be unconstitutional. He said the introduction of a career average pension for existing public servants would particularly hit those who are now close to retirement age: “People approaching retirement will have considered what pension they will receive, will have planned for it for 40 years and will have planned their retirement on that basis. A dramatic cut to their pensions just before they retire would leave those plans in tatters.”

He added: “The Taoiseach will also be aware of the clear legal advice of successive attorneys general that pensions are preserved property rights under the Constitution.”

He pointed out that the average public sector pension is approximately €20,000 and said “there is not much gold-plating involved in that”.

Mr Howlin asked Taoiseach Enda Kenny to give the Government’s exact position on the pension rights of public servants.

Responding, Mr Kenny said Mr Donohoe had not yet received the report on public sector pay but said the minister will be bringing it to Cabinet and it will then be debated in the House: “The Government’s position on this matter is that we should first wait to receive the report of the Public Service Pay Commission. The minister has not received that and he has not made any comment, good, bad or indifferent, about it.”

After a meeting of public sector unions, Bernard Harbour of Impact said: “We think public servants already make a very significant contribution towards their pension. Every euro you earn over €28,000, you are paying 20% of that euro in pension contributions of one sort or another. So we do not think there is a case for an increased contribution. But we are aware that the Government side is going to seek that in the talks and we will have to see what happens in the talks.”

Mr Harbour said that “for many years” pension increases have been linked to the pay grade of workers: “There is an argument from the other side that it should be linked to inflation instead but our priority in these talks will be to maintain the value of pensions.”