The two largest teacher unions in Ireland, the INTO and ASTI, have condemned changes to pensions proposed by the 26-County Minister for Public Expenditure and Reform Brendan Howlin as “larcenous” and “probably illegal”.
Secondary school teachers’ union, the ASTI, said it was considering challenging the measures in the courts. The national teachers’ INTO said it believed the new scheme was “unjust and potentially unlawful” and also signalled it would challenge the plan.
The legislation published by Mr Howlin fulfils a commitment made by the last government, as part of Ireland’s bailout by the EU and IMF, to cut the public pensions system.
However, it leaves intact most of the seven-figure payoffs provided to politicians and judges, who will continue to enjoy accelerated accrual of pension rights, unlike teachers. The pensions of this so-called ‘millionaire generation’ of high-earners will continue to be calculated based on their final, six-figure salaries.
The burden of reducing pension costs will fall mainly on future public servants, as the changes do not apply to current staff. New entrants will have to pay increased contributions, and their final pensions will be calculated only in accordance with their average (reduced) salary over their career.
Further savings will be made from raising the minimum public service retirement age from 65 to 68.
Savings will be relatively small in this decade, but the measures are expected to cut the cost of the public sector pension bill by 1,800 million euro by 2050.
Tanaiste and Labour leader Eamon Gilmore said that Ireland faced a growing problem in terms of its demography and dependency and how it was going to pay pensions in 30 or 40 years’ time.
“It is in the interest of people who are now entering the workforce that the Government reforms the pension system so that by the time the new entrants into the public sector now come to pension age, the country will be able to pay their pension entitlements,” he said.
Sinn Fein Public Expenditure and Reform Spokesperson Mary Lou McDonald TD described the government’s refusal to address high pension payments retrospectively as “deeply disappointing”.
“Ending the culture of high pay and pensions across the civil and public sector is a priority.
“For far too long failure at the top has been rewarded with big bucks, bonanza pension pay-outs and early retirement.
“Currently 646 civil servants earn between 100,000 euro and 250,000 euro yet the government refuses to lift the recruitment embargo on frontline workers, many of whom would be in receipt of the average wage,” she said.
“Labour and Fine Gaels refusal to grab the bulls by the horn and address high pension payments retrospectively is deeply disappointing. If such payments are not dealt with via the current pension reform proposals then Government must do so through taxation.”