"cuts to state pensions must be considered"

Slim said:

Post 1995 Public Servants paid a contribution that was co-ordinated with the contrib. OAP rate. Since the 1970,s all new public servants paid 5% superannuation plus(in most cases) 1.5% Spouses & Childrens, total 6.5%. Salaries did not change for new appointees.

Based on a salary of €49,000, the pre(Class D) & post(Class A) 1995 public servants pay as follows:

Class D: Pension Contrib (6.5%) = €3,185 Plus PRSI of €1,151.50 Plus Pension Related Deduction (PRD) of €3,528....Total Pension contribution of €5,978 or 12.2% of gross pay.
Class A: Pension Contrib (1.5% of gross plus 3.5% of gross less twice cont. OAP rate of €230.30) = €7,661 Plus PRSI of €1,960 Plus PRD of €3,528 or 15.63% of gross pay.

Clearly, Class A pay more in PRSI and presumably have a little additional entitlement, optical & dental, occupational illness etc.

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The above calculations look correct to me but I think you have omitted the fact that post-1995 public servants also qualify for the social welfare contributory pension.

It also ignores the fact that PRDs have only been in place for a limited number of years and we do not know whether they will continue into the future (ie they will almost certainly not be applicable throughout the relevant service period).

In any event, I dare say that most post-1995 private sector workers earning a gross salary of €49,000 per annum would be more than happy to sacrifice 11.63 per cent of their gross income, plus 4 per cent PRSI, in order to guarantee the sort of replacement income in retirement (together with the valuable benefits accruing to their spouse) that is available to public servants.

The problem of course is that the State's pension promises to workers (public and private sector) are unfunded and will become increasingly challenging to fulfil as we move through the next 40 years in the absence of major policy changes.

PS employees recruited post 1995 paying Class A PRSI contributions will receive the OAP but will have their occupational pension reduced to reflect this - it is integrated.

Deiseblue said:

PS employees recruited post 1995 paying Class A PRSI contributions will receive the OAP but will have their occupational pension reduced to reflect this - it is integrated.

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True, but my comment related to Slim's comment regarding the limited nature of the PRSi-related benefits accruing to post-1995 recruits. I'm not trying to advance an argument that post-1995 public servants get a better deal than their pre-1995 colleagues.

To be honest Sarenco, despite your numerous posts, I have no idea what you are putting forward in relation to solving implicit pension debt.

Sophrosyne said:

To be honest Sarenco, despite your numerous posts, I have no idea what you are putting forward in relation to solving implicit pension debt.

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Well, I did advance some potential solutions earlier in the thread (introduce career averaging for all public sector pensions and materially reduce all social welfare pensions and/or benefits now rather than leaving more dramatic cuts for the future) but I take the point that the majority of my more recent posts are trying either (a) to emphasise the extent of the core issue; or (b) to bring the discussion away from sectional pleading.

I really hoped that we could have a discussion on the merits of possible solutions to what I regard as an issue of considerable importance but I may have to concede defeat as the discussion keeps getting bogged down in the detail of a public v private sector argument.

Would you like to suggest any alternative possible solutions to the core issue of unsustainable State pension promises?

http://www.rte.ie/news/2015/0210/679191-pensions/

Interesting to note that the Government today extended the deadline for public servants to retire based on their salaries prior to pay cuts imposed under the Haddington Road Agreement. Defusing our growing pension time bomb is obviously not an urgent policy objective for the present Government.

Meanwhile, the pension entitlements of recently recruited public servants will be determined on the basis of average career earnings (rather than their final salary) but they are still subject to the same pension related deductions as their more established colleagues. I can only assume that the profoundly unequal treatment of different age cohorts within the public service is not doing wonders for the morale of its younger members.