Madam, – Pay parity for public service pensions is appropriate where there is no pension fund – a “pay as you go” system. Unlike with “pension funds”, in this system, pay increases automatically entail increased pension contributions that pay for the parity-related pension increase.
Also in a “pay as you go” system, for the number of retirees to increase beyond what could be funded through employee pension contributions, there would first have to be many years where those same people, as employees, generated a huge surplus through their pension contributions. This happened when “free education” led to extra secondary teachers’ pension contributions for 30 years, providing a bonanza for the government of over €5 billion in today’s terms. This is also happening today with the increased number of health service employees hired in recent years giving a huge surplus of pension contributions over pension payments.
While maintaining parity in this kind of system there can be times of surplus when Ireland benefits (as it does now) and times of scarcity (as is forecast) when Ireland should rightly expect to have to pay back. However, the Government wants it both ways by breaking the parity now. This is dishonest and unfair. – Yours, etc,