|Source: Sunday Independent
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,
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
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
pension fund charges are taking as much as 17.4% of retirement savings in
- - in the interval, it has done nothing about
the issue while the taoiseach (prime minister) is entitled
to 3 public pensions.
Finfacts Sept 2011:
Ireland's top civil servant retires at 57 on €713,000 package and future cost of
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.
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.
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:
In universities, there is some doubt about the extent to which some
additional payments resulting from awards of added years have become de facto
entitlements of the staff.
The Attorney General has advised that in certain instances they may have become
entitlements through statements made or commitments given to staff by
universities. The Department has indicated that work is underway to identify all
sets of circumstances where de facto entitlement exists."
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.
They received the lucrative payments -- a special entitlement of academics and
other senior figures in Irish third-level colleges to allow them to obtain the
maximum possible pension allowed under public service rules -- as they retired
In several cases, the top-ups amounted to 10 years -- or one-quarter of the
total value of the pension. The payments were requested by the individual
colleges and sanctioned by Ruairi Quinn, education minister, Brendan Howlin,
public expenditure minister.
In NUI Galway, 2 retiring members received top-ups worth more than nine years of
pension payments - - an actuarial valuation for 20 years or more is more than
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.
"Since the transfer of the pension funds to the State in 2010, all added years
decisions for retiring staff now rest with the relevant government departments
and not with the university," he said.
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.
OECD‘s at-a-glance reports on the government sector and on education and health
find that public pay in Ireland is elevated, especially for school teachers and
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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