New public sector pay deal: What it means for you What are the proposed pay improvements?

As retired Public Servants – what it means to us – we have to wait for the Alliance meeting with Government which hopefully will happen next week.

From January 1st 2018, public service staff will receive a 1 per cent pay rise with a further 1 per cent increase to follow on October 1st next year.

Staff earning up to €30,000 will receive a 1 per cent rise in January 2019 with all personnel to get a 1.75 per cent increase in September 2019.

A further rise of 0.5 per cent will be put in place for those on salaries of up to €32,000 in January 2020 with all staff to get an additional 2 per cent in October 2020.

What are the changes to the pension contribution?

The existing public service pension levy, which was introduced as a financial emergency measure in 2009 is to be converted into permanent additional superannuation contribution on a three-tier basis which is aimed at reflecting differing pension benefits.

For those appointed before 2013 the rate of the new contribution will be the same as the pension levy at between 10 per cent and 10.5 per cent, depending on salary levels. However, the income threshold on which payment is exempt will rise to €32,000 in January 2019 and to €34,000 in January 2020.

What about those appointed since 2013?

For staff appointed since 2013, and who are covered by the less generous career average scheme, the contribution will be set at 6.6 per cent for those earning between €32,000 and €60,000 and 7 per cent for on salaries above that level from January 2019.

It will be reduced to 3.33 per cent for those earning between €34,500 and €60,000 and at 3.5 per cent for those earning more than €60,000 in January 2020.

What about those on faster-accruing pensions, including certain Gardaí, military personnel and prison officers?

Those with faster-accruing pensions will continue to pay the existing levy rate of 10 per cent on salaries between €28,750 and €60,000 and 10.5 per cent in salaries above €60,000.

In absolute terms, what does this mean?

Average-earning staff on about €55,000 who were appointed before 2013 will receive pay improvements of about €4,000 over three years.

Employees on similar salary levels recruited since 2013 will get about €5,400. The pay improvements come from a combination of salary rises and reforms to pension contributions.

Those with faster accruing pensions will benefit least. The move will erode in relative terms some of the gains made by Gardaí from the controversial deal last November to avert a threatened strike.

Are there any changes to the additional “unpaid hours”?

The highly controversial requirement for staff to work additional, unpaid hours – introduced under the Croke Park and Haddington Road agreements – is to remain in place. However, staff will be given two opportunities, next year and in 2021 to revert back to their previous shorter working week on condition that they agree to a corresponding pay cut.

The Government argued this productivity measure was just too valuable to concede as the elimination of these additional working hours would cost it over €600 million.

How much will the deal cost the State?

It is understood the deal will cost the exchequer €880 million over three years, thus using up around one third of the total room for spending increases and tax cuts in the October budget.

Minister for Public Expenditure Paschal Donohoe said the deal was “in line with what is affordable to the State”. He said he would now take these proposals to Government – for approval by the cabinet next Tuesday.

What happens next?

The proposed deal will have to be considered and voted on by individual trade unions and staff associations before it can be finally ratified, probably in September.

 

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