THE STATE’S ACCRUED liability for 298,000 serving public servants, and 155,000 who have already retired, currently stands are €114.5 billion.
The figure, released in the Department of Public Expenditure’s latest actuarial review of its pension liabilities in respect of public service workers, represents the current value of all future payments to both former and current staff.
The €114.5 billion figure was calculated under the assumption that future pension increases will continue to be in line with pay rates, as had been the case historically.
Despite the large figure, Minister for Finance and Public Expenditure Paschal Donohoe said the accrued liability will have to be paid over the next 70 years – and not in any single year.
“It is also important to stress that we have taken a number of significant steps to improve the long-term sustainability of public service pensions in recent times,” Donohoe said.
He noted that the single public service pension scheme introduced in 2013 will, in time, reduce liabilities by around 35% from what would otherwise have been the case.
“Under the Public Service Pay and Pensions Bill (Act) 2017 we are making provision for the introduction of an Additional Superannuation Contribution by public servants,” Donohoe said.
“This will increase current employee pension contributions from over €700 million per annum to €1.25 billion in 2019, thus providing substantial additional ongoing funding support towards the cost of public service pensions from those that benefit from such pensions.”
The cost of public service occupational pensions is expected to increase from 1.2% of GDP in 2016 to 1.5% of GDP by 2040.
However, the cost is expected to reduce thereafter with a cost of 0.9% of GDP expected by 2060.
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