Cuts to public service pensions start at €32,500 threshold in draft of new deal

Retired public service staff who receive annual pensions in excess of €32,500 face further cuts under the new Croke Park agreement to tackle the public sector pay bill.

The deal, which is being resisted by major health unions, was signed yesterday morning after talks continued throughout Sunday night.

Draft background documents to the deal also suggest that compulsory redundancies could apply in certain circumstances where staff could not be redeployed and who declined voluntary redundancy.

The threshold for pension cuts set out in drafts of the agreement is half the €65,000 threshold at which pay cuts of 5.5 per cent will kick in.

The pay reductions rise progressively to a cut of 10 per cent from salaries above €185,000. Pay increments will also be frozen under the new deal.

It is understood about 80 per cent of public service pensioners receive less than €30,000, so the pension reduction will apply to a relatively small but significant number of retirees.

Exact level of cut unclear

However, the exact level of the pension cut remains unclear.

The draft agreement, seen by The Irish Times, said the parties noted that the Government was planning to align cuts to pensions paid to retired personnel to the reductions being put in place in pay for serving public servants under the new agreement.

The Labour Court recommendation has not been published in full so far, although it is expected to be released today. The Department of Public Expenditure made only a passing reference to the situation in relation to retired public service staff in its official briefing note on the deal.

Those facing cuts include former taoisigh, former ministers and other office holders.

As a result of the pay deal, Taoiseach Enda Kenny will see his €200,000 salary reduced to €185,350, while Tánaiste Eamon Gilmore will see his €184,405 salary drop to €171,308.

Following the 2011 referendum on judicial pay, the salaries of judges will also be decreased under the new deal.

The Government, which said it would have to introduce legislation to underpin the agreement, expects a campaign of resistance from unions.

“These proposals constitute a fair and balanced agenda to repair our public finances,” Minister for Public Expenditure Brendan Howlin said. “All public sector workers have already made a significant contribution to our economic recovery. However, these further measures are absolutely required to achieve a sustainable payroll cost.”

Unions to meet

The executive committees of most public service unions expect to meet in the coming days to consider the Labour Court recommendation on the deal. By the weekend it should become clear whether unions are to ballot members and what recommendation, if any, they are making on the proposals.

However, many of the unions that left the talks process before the agreement was reached showed no sign of changing their stance. Whether they ultimately decide to take industrial action remains to be seen. The Irish Medical Organisation said the proposals “confirmed we were right to walk out of the talks”.

The executive council of the Irish Nurses and Midwives Organisation will meet on Thursday to agree its next steps.

Fianna Fáil public expenditure spokesman Seán Fleming said the test that should apply was whether the deal was fair.