7. Deputy Mick Barry asked the Minister for Public Expenditure and Reform the way in which he will ensure that public servants who opt to work until 70 years of age will be doing so out of a desire to work as opposed to feeling compelled to do so for economic reasons; and if he will make a statement on the matter. (Question 53259/17 asked on 14 Dec 2017)
Deputy Paschal Donohoe: The Deputy will be aware that last week the Government decided to increase the compulsory retirement age from 65 to 70 for public servants recruited prior to 1 April 2004. I announced this on Wednesday last with the Ministers of State, Deputies O’Donovan and Moran. The decision to remain at work beyond the age of 65 will be completely voluntary on the part of the employee. There will be no change to the minimum pension age, that is, the age at which a public servant can retire and receive his or her pension. Once the necessary legislation is commenced, public servants, when they reach the minimum pension age, will be free to retire and receive their pensions at the time of their choosing but will also be free to continue in work up to the age of 70. This will enhance the options available to employees as they approach retirement.
The gap between the current compulsory retirement age of 65 for the pre-2004 cohort and the age of eligibility for the contributory State pension, which is 66, is one of the key policy considerations which gave rise to the changes I announced last week. The pensions of post-1995 public servants are integrated with the contributory State pension. This results in a situation where the pensioner generally applies to the Department of Employment Affairs and Social Protection for social welfare benefit, which is usually jobseeker’s benefit, for the intervening year. Many pensioners are not comfortable with that arrangement because they are required to register for social welfare benefits despite the fact that they have retired. Pensioners feel that they have earned their pensions and should not have to sign on as jobseekers for that period. Many would prefer to continue to work until normal State pension age rather than engage in such a process. This process is likely to become more protracted as the age of eligibility for the State pension increases in 2021 and 2028.
Many public servants want to continue to work beyond the age of 65 because they are fit and healthy and have the ability to contribute further. Others might not feel the same. This decision recognises the rights and interests of both groups.
Deputy Mick Barry: Public servants will now be able to work until the age of 70. The question is whether they will be compelled to do so or whether they will they do it out of a desire to work. The Minister says that the decision for those public servant workers is completely voluntary. I put it to him that he has put in conditions which mean it is not completely voluntary. I will list three: the increased take in the form of the now consolidated public service pension levy; the replacement of half final salary with half career average earnings; and the breaking of the automatic link between salary and pensions post-retirement and its replacement with periodic non-automatic links with the consumer price index. Any reasonable analysis would show there is an economic push factor that will force many public servants to work until 70, long after they would wish to be the case.
Deputy Paschal Donohoe: If I came in here and told the Deputy that I am going to create a socialist republic in which the means of production are owned by every citizen of Ireland and would guarantee basic State income for everyone, it would not be good enough for him. This is a progressive measure that has been well recognised, appreciated and noted by unions, those they represent and civil and public servants across the State. There is no coercion or compulsion; it is entirely voluntary. As the Deputy well knows, the issues he has just raised have nothing to do with this decision. They are concerned with trying to ensure that our pensions in the future are on a more solid and sustainable footing. If they were not on a solid and sustainable footing in a few years’ time, the Deputy would be the first into the Dáil to lambaste the Government for not making the right decisions. His kind of government - and his abdication of responsibility and continued commitment to rhetoric - takes no account of the fact that this is a good decision, as recognised by many.
Deputy Mick Barry: That was a very interesting reply. If the Minister comes into the House to propose a socialist republic with public ownership of the means of production, I will second his proposal.
Deputy Thomas P. Broughan: Hear, hear.
Deputy Mick Barry: I bet, however, that the Minister would not do it. He is a defender of the capitalist system and the rule of the 1% elite. Despite all the bluff and bluster from the Minister, many people will be smelling a rat here. It is well known that the Government intends to bring the State pension age up to 68. It is not a wild leap of the imagination to suspect that the ultimate aim of the Minister and the political establishment is to eliminate the difference between 68 and 70 and make the latter the normal retirement age. When we have that socialist republic, which we will have, we will reduce it to 65 years and below so that workers will have a decent lifestyle. That is very different from what is on offer here.
Deputy Dara Calleary: No one will have to work.
Deputy Paschal Donohoe: The chances of a socialist republic coming about will always be significantly reduced by the unwillingness of the Deputy and those in his party to take any position of responsibility or to ever seek to enter office to better those whom we represent and take the inevitable consequences involved in holding public office. I do not know who the Deputy is looking at over here when he speaks about the establishment.
Deputy Mick Barry: I am looking at the Minister.
Deputy Paschal Donohoe: I am not a member of any establishment. I represent the people of Dublin Central. I do not represent the 1% of which the Deputy speaks. I am trying to make good decisions, which involve compromise, for the betterment of all. This is a sensible decision. The Deputy is right that there will be changes in the retirement age between 2021 and 2028. This is about ensuring that we have a State pension that is at a good level and affordable for all. This is trying to do the right thing by people who work and by those who will depend on the State pension and the non-contributory State pension in the future. These are not the actions of an establishment but of a Government that is trying to do the right thing by ordinary people.