As reported today By Daniel McConnell Political Editor
Fine Gael has now been in power since March 9, 2011, and just three of its 10 ministers appointed to the Cabinet that day remain at the table — Taoiseach Leo Varadkar, Tánaiste Simon Coveney, and newly appointed Communications Minister Richard Bruton.
As a result of their years of service to the public, they are entitled to a generous set of retirement benefits whenever they choose to bow out of political life, writes Daniel McConnell
A TD’s salary is €93,599, so to calculate that TD’s pension entitlement, one divides the salary by 40 and multiply it by 20, which means the TD is entitled to a €46,799 a year pension once they reach retirement age.
Retiring TDs are also entitled to a one-off pension lump sum of three times their pension. So, in this example, the TD would receive three times €46,799 — a lump sum of €140,398.
On top of this, TDs who have served more than six months in Dáil Éireann are also entitled to a termination lump sum equal to two months’ salary (€15,599).
If TDs have served for longer than three years they are also entitled to up to 12 monthly payments based on their length of service (for a TD the maximum payment total over 12 months is €57,920). Only after these payments end do they receive their pension proper.
Mr Bruton, a veteran TD of 36 years’ service, has also served as a minister for a considerable time.
Mr Coveney has, since last month, also reached the 20-year cap since he was first elected a TD in 1998 and his three-year stint as an MEP counts towards his service
Mr Varadkar has only been a TD since 2007 and his TD pension will be lower than the other two.
Those called upon to serve as a minister are entitled to another pension relating to the additional salary they receive for sitting at Cabinet. After two years, a retiring minister is entitled to a pension equal to 20% of his or her salary. After three years this becomes 25%, four years 30%, and five years 35%. The maximum entitlement is 60% after 10 years’ service.
Using the official guidelines to calculate the pension entitlements of ministers, we calculate the following:
- Mr Bruton earns €93,599 as a TD and a further €73,456 as a minister, a total annual salary of €167,055. Having well more than the maximum 20 years’ service as a TD, he is entitled to the maximum benefits which include termination payments of €74,069, a lump-sum payment of €140,398, and an annual pension for the rest of his life of €46,799.On top of this, we calculate he is entitled to an annual ministerial pension of €36,728. So combined, his annual pre-tax pension is worth €83,527, giving him an estimated retirement fund worth €1.8m.
- Mr Coveney also earns €93,599 as a TD but as Tánaiste earns an additional €88,284, giving him a total annual salary of €181,883.As he also now has 20 years’ service, he is also entitled to €74,069 in Dáil termination payments plus a lump sum of €140,398. He is also entitled to an annual TD’s pension of €46,799 but on top of that his ministerial pension with seven years’ service is calculated to be worth €39,727 a year. In total, this would entitle him to an estimated pension pot of €1.9m.
- Mr Varadkar is also paid €93,599 as a TD but gets an additional €103,587 for being head of Government. He would get a lower TD pension of €25,739 a year after he received termination payments worth €62,375 and a lump sum of €70,199.His ministerial pension has now been greatly enhanced because of his time as Taoiseach and all his seven years as a minister can be treated at the higher Taoiseach rate for the purposes of his pension.
This means in total he is entitled to an annual combined pension of €72,321 already and a total retirement pot worth €1.6m. This will only increase the longer he remains in office.
Since 2009, pension-related deductions apply to all State pensions.