No gain for post-1995 public servants

I would like to correct Eddie Hobbs, who was on Prime Time last week debating with Shay Cody of Impact.

Mr Cody said public service pensioners do not receive the state contributory pension, in addition to their occupational pension.

Mr Hobbs said this was not true, and that those hired after 1995 receive the state contributory pension, implying this was an advantage.

Mr Cody seemed to concede the point when he said public servants hired after 1995 were not retiring yet.

However, the public service pension for those hired after 1995 is reduced or ‘co-ordinated’ to allow for the state pension at age 66 or after. It amounts to the same pension payment as those hired before 1995, but ensures that public servants do not benefit from both an occupational pension and the State contributory pension.

A PRSI class A contributor retires on their 65th birthday with entitlement to full pension on pensionable pay of €50,000. Their pension is coordinated: ie, double the maximum rate of contributory old age pension (COAP) is taken from pensionable pay before the calculations are made. Pension, therefore, is €13,000: ie, €50,000 – €24,000 (double maximum rate of COAP at Jan 2010) x 40 ÷ 80.

This annual pension of €13,000, together with the state pension (transition) of €12,000 (maximum rate the same as COAP) brings the total to €25,000, the same as that of the PRSI class D employee.

It gives no advantage, despite the impression given by Mr Hobbs. Newer recruits to the public service have had further erosion of pension entitlements.

Philomena Doherty

Bray

Co Wicklow