Retirement update

23rd February 2012

Final details of the scale and scope of public service retirements will emerge next week, when the deadline for retiring on a ‘pre-pay cut pension’ passes. The latest figures from the Department of Public Expenditure and Reform suggest that some 6,270 people will retire at the end of February, but this figure may change marginally.

Most nervousness about the possible impact on services has related to the HSE, where some 1,700 staff are reported to have already retired over the last four months. The total number of HSE staff going between September 2011 and the end of this month is put at just over 4,200 individuals, or about 3,700 ‘whole time equivalents’.

The HSE says its management at local and regional level have full details of the staff that have left or are leaving, including posts that can’t easily be filled by redeployment. The HSE says hospital chief executives and community service managers have undertaken risk assessments and other preparations for individual hospitals or community services.

In an interview on RTÉ’S Morning Ireland on 8th February, HSE national director of integrated services Laverne McGuinness said the HSE would deploy Croke Park flexibilities including redeployment, flexible working practices, service reorganisation and roster changes to deal with the immediate and long-term situation. She also said money had been set aside in the HSE’s 2012 service plan to replace “key posts necessary to deliver essential services,” that can’t easily be filled by redeployment, in maternity, emergency departments, critical care, intensive care, mental health and primary care.

Ms McGuinness also said staff consultations were underway or planned, although IMPACT and other unions have been critical of delays in consultation meetings, especially in the west and south where the age profile of staff means that higher numbers are retiring. IMPACT has called on the HSE to demonstrate that its preparations are in place in all the affected areas.

Unions have told the HSE and other public service employers that they are committed to ensuring that services are maintained, and that flexibilities will be delivered to deal with the immediate and longer-term issues that arise from these and other staff reductions.  The Croke Park agreement provides the tools for ensuring that priority services are protected as staff numbers fall.

In early 2011, unions agreed a temporary protocol to deal with the immediate impact of the HSE’s early retirement/voluntary redundancy schemes, which saw 2,000 staff leave with no major impact on service delivery.

Teacher unions believe that interim arrangements, including plans to temporarily rehire retiring teachers with exam classes, will be sufficient to ensure few if any problems. Teachers rehired on this temporary basis will be paid at the bottom point of the pay scale.

A new gardai roster, which will cater for the reduced number of gardai, has been agreed and will be introduced on 1st April.

In the public debate, IMPACT has stressed that there is no ‘early retirement scheme’ in place and no facility for public servants to get ‘extra’ lump sums or pensions by retiring now. Everyone who retires before the end of the month will be subject to the average 4% cut in public service pensions introduced last year. Those who retire early will have their pension further reduced, on an actuarial basis, to reflect their reduced years of work and pension contributions and any earlier payment of pension. The actuarial reduction can be as much as 5% for every year of early retirement.

The fact that pensions are being adjusted down for early retirees means that only those already at, or very close to, retirement age can benefit in any way by leaving next month. A relatively high number will be going at one time. But it’s not an exodus of people who would otherwise have remained in the service for years. Virtually all of them would have been due for retirement over the next year to 18 months anyway.

The facts about the February retirements

  • There is no early retirement ‘scheme’ or enhanced lump sum/pension for leaving by 29th February. Rather, 1st March is the date at which retirees will get pensions based on post-pay cut salaries. Public servants who are at or near retirement can opt for a slightly smaller reduction in their pension if they retire now.
  • Everyone who goes prior to 29th February will incur the public service pension reduction introduced last year.
  • Any of them who are retiring early will have their pensions further (actuarially) reduced to reflect their reduced years and contributions and any earlier payment of their pension. The actuarial reduction is as much as 5% for every year of early retirement.
  • The latter point means that only those at or very near retirement date can benefit in any way – and the benefit is a reduced cut rather than an enhanced pension or lump sum.
  • These people would be retiring in the next year to 18 months anyway – and, in terms of staffing and service issues, the recruitment embargo rules and regulations would apply in that case.
  • The Government has been clear that some vacant posts that arise will be filled. This will protect services and deliver represent a significant saving as new staff will be employed at the bottom of pay scales and on the reduced salary scales for new entrants (10% below that of existing staff, on top of 2010 pay cut and pension levy). If staff are promoted into vacancies, they will earn the new (reduced) pay rates.
  • The Croke Park agreement has been effective at managing exits through redeployment, etc. Some 20,000 have gone in recent years (half the Government target up to 2015). And a large number went in one go at the end of 2010 due to the HSE exits – but this was managed.