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Election Pledge: Reverse Public Service Pension Cuts

Campaign for Reversal of Reduction in Public Service Pensions

Chair: Paddy Healy, Dublin
Secretary: Cathleen Bowen, Cork
Please reply to cathleenbowen@gmail.com

Dear Oireachtas Member,

Pledge by General Election Candidates

“If elected to Dail Eireann, I will propose and support an amendment to the Finance Act, 2011 which would reverse the cut in public service pensions announced in Budget 2011.
I will also vote against any legislative measure which would impose further reductions in public sector pensions”
Please indicate your agreement to the above statement by sending a message on email to our secretary, Cathleen Bowen, at the above address.
The responses will be published on Wednesday, Feb 23
Paddy Healy 086-4183732
From Sean Fallon, Secretary Retired Secondary Teachers Association

Legality of Recent Pension Cuts?
We now know the impact of the budget pension cuts on our fortnightly cheques. Elsewhere in this newsletter there are sample figures showing the extent of the cuts on an annual basis for retirees on pensions ranging from €15,000 per year to €35,000 per year.
While the Government may have a right to increase the tax we have to pay on our pensions and may have a right to impose various levies, it is highly questionable and needs to be legally tested whether it has a right to cut our actual pensions. Three aspects of the pension cuts in particular need to be examined:
• Is there a contract between the retiree and the Government in relation to the size of pension due? When we signed our retirement documents and began receiving pension did that make it a contract and, as such, untouchable?
• Does the fact that our pension was improved in the past, like when pension parity was achieved in the early 1980s really give the Government the right to cut our pension if it chooses to? Retirees were happy with previous pension improvements. Does this not mean that on these occasions rather than breaching contract a new contract was being embraced by all parties, which superseded the old one? Naturally, nobody objected to the improvements. The current change is different in that it is a unilateral negative change by the Government. Is this a breach of contract?
• There is a question of ownership. When we paid our pension contributions, our “deferred salary,” the Government’s role was to hold this money in trust for us until we would retire. Does this make it “our property” and if so does the Government have the right to unilaterally reduce what it pays back or is it in breach of property legislation?
Our situation is different from that which arose in late 2010 in relation to bank bonuses. The money at issue in our case is money we contributed when working, our deferred salary. The money involved in the bank bonus issue may have a different legal status. Indeed, it is worth remembering that there was no court judgement in relation to the bank bonus payment since the bank in question did not contest the issue. The employee was paid the bonus but neither the right to receive it nor the right of the employer to refuse to pay it was established. Furthermore, when “experts” in contract law were interviewed on this issue at the time they were very strongly of the view that it is illegal for an employer to break a contract and the Government could not facilitate a breach of an existing contract. You cannot retrospectively unilaterally change the legal arrangements that applied when a contract was put in place. It is not always necessary, either, for a contract to be made in writing for it to be valid and binding.
It is interesting that our first two payslips since the cuts began to be implemented did not have the gross pension figure reduced. The cut was applied as a deduction, like a levy. Was this because the Government was not confident that it had a legal right to cut our pensions? Whether this is the case or not, and whether the gross figure is changed on future payslips or not, we need to know if the Government is acting illegally by cutting our pensions. The three teacher unions need to get legal advice on the specific matters referred to above and if necessary they need to take a test case to establish what will ultimately be the rights of all members of the unions. Emeritus members of the ASTI, supported by the union, would be ideal people to take such a case.
Legal advice from a non-teaching union, which suggests that if the Government can increase the pension at times it can also reduce it at times, does not provide the answers to the questions above. Clearly, when that legal advice was sought these were not the questions asked but they are the questions that need to be asked and answered. At the time of going to print these questions have not been answered. The three teacher unions had decided to jointly seek legal advice on this matter. Let us hope they do so quickly rather than accepting another union’s advice in response to the wrong question.

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