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The gap between private pensions and public pensions has the government worried

Enda Kenny said Minister Paschal Donohoe will not deal with its strategy for public pay until the Public Pay Commission sends its report.

Image: Shutterstock/beijersbergen

THE GAP BETWEEN the value of private and public pensions is a concern for the government as it enters a new year.

In the midst of strike action in 2017, with Siptu announcing yesterday that it is to ballot some 25,000 health service staff, the government said the Public Pay Commission should be allowed to do its work – and that includes looking at a viable path forward in the cost of public sector pensions.

Retired public sector workers have generally seen an increase in their pension as the salary of the person in their old job increases. It’s understood the government believes that halting such a mechanism could save millions.

“In respect of public pay, the government has decided here that the Public Pay Commission has been asked to take into account the value of public pensions.

“Clearly, the gap between private pensions and public pensions has grown so the government are anxious that the Public Pay Commission will be allowed to do its work and report back to government in due course,” Kenny recently told reporters.

The Public Pay Commission will advise the government about pay for hundreds of thousands of public sector workers.

shutterstock_182754593 Source: Shutterstock/PhotographyByMK

The commission will provide an initial report some time between April and June of next year.

In a recent interview with The Sunday Business Post, Public Expenditure and Reform Paschal Donohoe said the value of public sector pensions has increased and the differential versus private sector pensions has widened.

He said his department will be doing work on what the future cost will  be and how it will need to be met.

Despite the possible threat of further strike action in 2017 the Taoiseach said it would not be addressing issues of public pay until after the commission’s recommendations have been published in their report.

8/12/2016. Creative Minds Launch Minister for Expenditure and Reform Paschal Donohoe with Taoiseach and Fine Gael leader Enda Kenny Source: Sam Boal

“The minister [Paschal Donohoe] will not deal with its strategy for public pay until the Public Pay Commission sends its report.

“Obviously the government is fully supportive of Lansdowne Road and the structures are there to roll back FEMPI (Financial Emergency Measures in the Public Interest).”

In the past year, the government has had to deal with a number of industrial action threats – the most high-profile being the threat of garda strike action.

Following a Labour Court recommendation, which was accepted by government, the Justice Department will have to find €25 million from this year’s budget to pay for the half of the pay deal.

The other half will come from other departments, in what the government is dubbing a “burden sharing” approach.

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