Public service pay and pensions

16 May 2017

May 2017

The CIPD welcomes the Report of the Public Service Pay Commission and its main conclusions. The Commission compiled a lot of valuable analysis on pay trends in Ireland, and drew extensively on the CIPD/IRN annual private sector pay surveys in examining current pay settlements in the private sector.

The CIPD believes that, in any negotiations that seek to unwind the financial emergency FEMPI legislation, it is incumbent on all parties to give serious cognizance to the Commission’s main conclusions, summarised below.

In relation to pensions, in view of the need to overhaul our national pension coverage and address the unsustainable level of occupational pension provision, the 2017 CIPD/IRN survey sought the views of the HR profession and found strong support for action to tackle this growing crisis. In the survey, 88% of the HR professionals agreed or strongly agreed that employees should be required to contribute to a pension scheme, 93% agreed or strongly agreed that employers should be required to contribute and 79% agreed or strongly agreed that a programme of pension auto enrolment should be introduced in Ireland. Four in five of those surveyed already had some form of pension scheme in place.

As part of building a more sustainable national pensions model, upcoming negotiations on public sector pay should build in appropriate pension contributions for public servants. Alongside this the Government needs to immediately act on the recommendations of the 2014 OECD Review of pensions, in order to improve the adequacy of pension coverage across the public and private sectors.

Main conclusions of the Public Service Pay Commission Report

  1. Capacity to Pay
    The State’s ability to pay is a crucial factor for any negotiations, in the context of competing pressures on the public purse. Negotiations and timeframes should have regard to:
    • Maintaining sustainable national finances and competitiveness
    • Other Government spending priorities
    • The Public Service Reform agenda
    • Equity considerations on public service pay

  2. Pension contributions
    A critical recommendation from the Commission was that staff benefiting from accrual pension schemes should make a contribution to continue to benefit from those schemes. This would be a replacement vehicle for the current pension levy. In the Commission’s opinion the valuation to be placed on public service pensions would be between 12% and 18% for the pre-2013 standard accrual cohort of public servants.

  3. Security of tenure
    Security of tenure has a value. However, the Commission was unable to present evidence as to what specific monetary value could be assigned to it.

  4. Recruitment and retention
    The Commission did not find significant difficulties in recruiting for the various large scale public service vocational streams, but acknowledged recruitment problems in some specific and specialist groups across the public service. Some previous flexibilities may need to be revisited and, in view of structural and organisational constraints, it suggested an examination of the underlying difficulties in recruitment and retention where difficulties are evident.

  5. Sectoral issues
    The report did not address specific remuneration issues relating to particular sectors or employment streams as their focus was the pan-public service.

  6. Ongoing reform and productivity
    The Commission recognised that a modern agile and flexible public service must continue to implement reform to meet the evolving demands of a modern society. Therefore it recommended that any pay adjustments are contingent on the delivery of reform and continuous improvements in productivity.