In a graphic illustration of the gulf between the cosy arrangements made for insiders in the Irish system in contrast with the lot of many Irish private sector workers, it has been revealed that during the recent years of crisis, 2012-2013, ministers who themselves avail of one of the world's best pension schemes linked to current earnings, secretly approved pension top-ups for more than 500 third level academics and senior managers.
While the majority of Irish private sector workers have no occupational pension with an employer contribution, and those who do face the prospect of meagre payouts, it has been an exception in universities for both academic and non-academic staff to retire without additional pensions years allocated.
Those in the private sector who have pensions are losing the right to have a defined benefit pension (with a guaranteed payout); some profitable overseas companies have used the recession to close Irish schemes and a levy on private pension funds was introduced in 2011. Two levies apply this year -- last year the Government announced an increase in the levy on private pension savings from 0.6% in 2013 to 0.75% in 2014 and a further 0.15% levy in 2015 will apply.
Meanwhile in 2012, a report commissioned by the Government said that pension fund charges are taking as much as 17.4% of retirement savings in occupational schemes - - in the interval, it has done nothing about the issue while the taoiseach (prime minister) is entitled to 3 public pensions.
In 2010, we revealed that the Government was taking over responsibility for pensions from universities and non-commercial state bodies including IDA Ireland, and a deficit of over €1bn had been identified with university deficits amounting to about €630m led by Trinity College at €315m.
In a 2010 report, the Comptroller & Auditor General said additional years had become a feature of pension awards in universities. By way of example, in UCD 78% of staff retiring between October 2007 and September 2008 had years added to their service for pension purposes. These 42 employees had an average of 4.2 years added to their pensionable service and their average salary on retirement was €74,434.
Similar provisions applied in other universities - - Trinity College stated that since 1972, on the basis of custom and practice the award of added years has become a legitimate de facto entitlement under its Master Pension Scheme and that Scheme members were advised that they had been granted added years.
"Legitimate de facto entitlement" is an interesting concept for some in Ireland. In a strange place called Sweden, all workers have equal rights under the law and apart from judicial level positions, there are no jobs for life.
In Ireland, the public sector pension top-up has been used an apparently
cost-free inducement. It's always easy to spend others' money.
In UCC, academic staff appointed prior to 8 July 1986 are eligible by statute for seven professional added years at age 60. The years are accrued in the first ten years so that in the 11th year a member of the academic staff has gained a right to seven added years at age 60. Where such academics retire at age 65 they are entitled to a maximum of ten added years as with the normal application.
The C&AG said in 2011:
The Sunday Independent
reported earlier this month that information released via a Freedom of
Information request showed that more than 500 of the country's leading academics
and senior managers in our universities were gifted lavish pension top-ups worth
"tens of millions" of euro.
The newspaper said a spokesman for UCD
(University College Dublin) said the college no longer had a role in approving
the awarding of added years, saying it was a matter for the Government --
the ministers and their civil service advisers are in a conflict of interest
situation as they are beneficiaries of a corrupt system.
The IMF said in 2012:
Ireland‘s share of public compensation in government expenditure and the ratio of average public pay to per capita GNP are among the highest in the OECDAccording to a higher education report submitted to the Irish Government in 2011, payroll accounts for 75% of Irish university budgets compared with two-thirds internationally.
It's official government policy to keep employer social security costs low but parallel with the operation of this policy which means Irish occupational pension coverage is among the worst in Western Europe, the insiders devised a special system for themselves and in recent years a reduced benefit one for new entrants to the public service.
Why would the existing turkeys agree to a fair system when the insiders motto is Mé Féin!
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