RECENT DISMAY OVER former Taoiseach Bertie Ahern’s decision to claim his full pension of €150,000 despite offering it as a ‘gift’ to the state, has highlighted how out-of-touch our political representatives’ pension entitlements are from the context of austerity which has infiltrated all other sectors of society.
The International Parliamentary Standards Authority (IPSA) in the UK, an independent regulatory body tasked with determining British politicians’ wages and entitlements following a series of expenses scandals, is currently conducting a review of the final salary pension scheme, which entitles MPs to claim around €35,205 annually after 20 years of service. The chairman of IPSA, Sir Ian Kennedy stated that the current UK system is “expensive to the taxpayer and out of kilter with the modern idea of where public sector pensions should be”.
As recommended by the report issued by the Oireachtas Committee of Public Accounts in November last year, Ireland desperately needs to establish an independent commission to oversee TD expenses and allowances. However this body should operate like IPSA in the UK and go further than the recommendations of the report and include a mandate to evaluate the pension entitlements of our elected officials.
How much is each TD entitled to?
Each TD receives a salary of €92,672 and each TD’s (or Senator’s) basic pension is calculated by dividing their salary by 40 and multiplying it by their number of years service, capped at 20 years.
On top of a basic pension, each TD and Senator is entitled to claim a once-off, non-taxable ‘Pension Lump Sum’ equivalent to three times their annual pension, upon retirement.
Any member who has served for more than 6 months in the Dáil or Seanad is entitled to a Termination Lump sum equivalent to two months salary. For a TD, this figure translates to €15,445.
These entitlements amount to an annual pension of €46,336 and retirement lump sum of €139,008 for a TD who has served for 20 years.
Furthermore, if a TD has served longer than three years, they are entitled to claim a maximum of 12 monthly ‘Termination Payments’ calculated according to number of years of service and amounting to up to a maximum annual payment of €57,920 for anything over and beyond 14 years service. A Deputy’s annual pension only officially begins after this year.
TDs and Senators who began their term in office before 1 April 2004 which includes Deputy Joan Burton, Deputy Simon Coveney and Taoiseach Enda Kenny among many others, are entitled to retire and draw their pension once they reach 50. Those who were elected after this time must wait until they turn 65.
Ministerial pensions
Although those with ministerial responsibilities receive no lump sum upon retirement, the Taoiseach, Tánaiste, Ministers, Ministers of State and other Ministerial positions – ie Ceann Comhairle, Leans Cheann Comhairle, Cathaoirleach, Leas-Chathaoirleach, Attorney General and the Leader of the Seanad – are entitled to a more generous remuneration.
In addition to their TD salary, a Minister of State receives an extra €37,370, bringing their total salary to €130,042. A person with at least two years’ service in a Ministerial office qualifies for a Minister’s pension.
After serving two years in any ministerial position, a representative is entitled to claim a pension equal to 20 per cent of their annual salary upon retirement. This rate of pension increases by 5 per cent for each year of additional service thereafter up to a maximum of 60 per cent. Therefore, after 10 years serving in one of these positions, a deputy can claim a maximum annual entitlement of 60 percent of their salary upon retirement.
Furthermore, if a TD who worked in a ‘secretarial’ position such as a junior minister before being promoted to Minister of State, they are entitled to claim a full ‘ministerial’ pension for half of the time served as in the lower paid position.
Time for change
We should not expect our former representatives to decline their remuneration, instead we need to reform the system so that their entitlements are realistic within our current economic situation and in line with the sacrifices that are being made across sectors. In a climate of political distrust and economic instability, a pension scheme that exhibits such blatant incongruity from the national reality is disheartening to the morale of the Irish public and undermines citizens’ ability to tolerate the necessary sacrifices outlined in the most recent budget.
Furthermore, we must consider the impact these ludicrous entitlements have on the ability of our leaders to position themselves favourably in negotiation talks regarding a reduction in Ireland’s promissory note. How can ECB officials take seriously reports that Ireland has suffered the harsh reforms necessary and simply cannot finance further repayments when our government officials are paying themselves salaries above the European average and shamefully generous pensions?
Sarah O’Neill is a TCD student and founder of www.dailwatch.ie, a non-profit, politically neutral platform for direct, public Q&A between citizens and TDs.
Dáilwatch will be hosting a Twitterchat around Political Representation in Ireland at 12-2pm on 6 February. Join the conversation by tweeting @dailwatch #AskaTD at this time.’ To read more articles by Sarah for TheJournal.ie click here.
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