Thanks to 9th level ireland for keeping note of these articles. The lifting of this directive could cause huge pressure on individual teachers. Let’s see how they respond to this likelihood..
Following a good suggestion from Denis O’Boyle who is also a member of the A.S.T.I. Pensions Committee, attached is a one page document with information about public service pensions that can be used to “win the argument,” confront politicians or write reply letters to newspapers when writers criticise us our our pension arrangements. In confronting politicians and others on the issues of public service pay and pensions it is important to have as much information as possible and to use it to counter the relentless “spin” that is being orchestrated by members of political parties in pursuit of their own agenda (note the singular).
Best wishes, and roll on the Summer,
The following quotes from this year’s budget speech are very worrying:
“The Government has decided . . . by the end of the year . . . it will change the calculation of benefits so that pensions are based on “career average” earnings rather than final salary on retirement as at present.” As shown in a document I circulated recently by email and by hand to C.E.C. members, this change will reduce the value of pensions for new teachers and other public service workers by over 20% even if contributions remain the same. This is quite shocking!
“The link to earnings or ‘pay parity’ basis for post-retirement pension increases is a feature of Irish public service schemes. The recent special report by the Comptroller and Auditor General estimated that the present actuarial cost of public service pensions is €108 billion. A change to a CPI basis for post-retirement increases would reduce that cost to €87 billion, a reduction of 20 per cent.”* A reduction of 20% in pension pay-out for all teachers and public service workers is scandalous given their legitimate expectations after years of contributing to the present scheme. However, together with the first change, above, this would also mean a total reduction in pension for new teachers and public service workers of 40%, which is absolutely staggering!
This second change is currently “on hold” for serving public service workers only. This is because the Government believes that for the next three years it would cost less to tie the pensions to a 0% level of pay increase than to tie it to an inflation level (consumer price index) that may actually rise. (In taking this position it is contradicting its own claims that the cost of living is falling). However, legislation is still being processed so as to apply these changes to new public service employees including teachers from 2011. Given that the number of newly appointed public service workers will be quite small due to the embargo (despite recent announcements for education) the Government will save very little through this arrangement for many years. However, if it applies it to all public service workers it will make the 20% savings once the pay freeze ends. Might it even be used as a trade-off to end the pay freeze?
The Government promise that there will be no “salary cuts” in the next three years is very interesting. It can, after all, maintain the gross salary level to keep that promise while adding further levies, increasing present levies, increasing taxes, freezing increments etc. etc. It needs more money and has set its face against replacing the public service “pension levy” with general tax across all the currently working population so what do you think it will do?
The Government continues to give the impression that our pension contributions are about 6.5% p/a for 40 years, (give or take variations for certain groups like the defence forces, Gardaí etc.). There is no mention of the fact that since the P.C.W. (1998) and the Benchmarking exercises of 2002 and 2007 we are also paying at least another 7% in the form of pay cuts related to our pension arrangements. Its figures are completely wrong.
*(The enormous figures quoted are long term figures for pension commitments already entered into. The Comptroller and Auditor General Special Report 68: Central Government Pensions states: “The State’s accrued liability in respect of pensions for serving staff, pensioners and preserved pensioners was estimated at €108 billion at 31 December 2008.” Much of this may not be paid out as pension for many years. The €87bn figure is all that retired public service workers would be entitled to if the Consumer Price Index were used to guide/control pension increases in the future. The Minister is quite right. The difference is about 20%).
Sorry to depress you but you might as well know what we are up against. I wish all members had this information before voting on the Croke Park proposal.
Firstly, word games – and the expression “The Croke Park Deal.” As you know it is not a “Croke Park Deal” at all but rather a “Croke Park Proposal.” It would only be a deal if the parties involved agreed to it. I think that by calling it a Deal the Government and ICTU are trying to give it more credibility than it deserves in the hope of a yes vote that suits their purposes rather than ours.
Secondly, the pension issue – can I draw your attention to another part of the “Proposal” that is very worrying, the second paragraph of Section 1.17 where it says “Discussions will take place on the method of determining pension increases for existing Public Service pensioners and current public servants in the context of the review of pay policy in Spring 2011″ (my emphasis). If the proposal is accepted then the Government can change the method/timing/scale of awarding of pension increases in any way it wants to suit itself. What is particularly worrying about this is that it has been Government policy to force down public service pensions since 1999 when the report prepared by Fitzpatricks and Ernst & Young was adopted as Government policy. The Government has been waiting for this chance, working for this chance, preparing the way for this chance through its media allies having twice been thwarted previously by the A.S.T.I. (once when it wanted supervision and substitution payments to be non-pensionable and once when it wanted benchmarking awards to be non-pensionable but we fought to retain the pensionability despite media villification, ICTU cold-shouldering etc).
Now there is talk of tying pension increases to the Consumer Price Index but there is no limit to what it could do if this proposal is accepted. Let us not forget that it can break any contract and tear up any agreement in the shortsighted (at best) and deceitful (at worst?) name of the “national interest” and get away with it. Let us say that it chooses the C.P.I. to guide it. Is there agreement as to what the C.P.I. actually is. Is it based on or influenced by, among other things, the cost of housing, the cost of a bottle of wine, the cost of cigarrettes, the cost of petrol? Can it be changed after an agreement is made, and if so is the Government likely to do this to pursue its agenda? Are we to offer them this option? Clearly, voting “yes would be like turkeys voting for Christmas.
Thirdly, there is talk of basing the pensions of future public service workers on average lifetime earnings rather than final salary of colleagues who are still serving (at last using the current breach in pension parity to its advantage and our disadvantage). The table below, based on the current salary scale for teachers (available on the ASTI website), is for a sample teacher who serves for 40 years, with a pass H.Dip and an honours Degree and who gets a Special Duties post after 25 years and an Assistant Principal post after 35 years. The table indicates that the change referred to would involve a huge loss for future teachers like this teacher.