Public sector pensions – is there any three-word formulation more likely to angry up the blood? Not likely (except, maybe, ‘public sector pay’). Mention public sector pensions in polite company and animal sounds will be heard. We are constantly told that we can’t afford public sector pensions, they are a burden on the taxpayer (the private sector taxpayer, the public ones don’t count as they will become a burden when they retire), that they will in a few years sink the economy.
Listening to the debate, you’d think it was public sector pensioners that caused the fiscal and economic crisis, sank the banks and forced us into a bailout.
But a few facts that are emerging suggest otherwise (a few facts are always a healthy tonic to unsubstantiated assertions). WorldByStorm over at Cedar Lounge Revolution pointed to the Sunday Business Post article based on documents obtained under the Freedom of Information legislation:
‘A quarter of public service pensioners receive a pension of only €5,000 annually, according to government documents [and] almost half of all public service pensioners get a pension of about €10,000 or €11,000 annually.’
25 percent received a pension of only €5,000? Almost half on €11,000 or less? Can this be true? And, if so, where does that leave the ‘public-sector-pensions-are-ruining-us-school’?
Well, yes, it can be true. The latest Analysis of Exchequer Pay and Pensions Bill shows that the average public sector pension is €20,800 a year. It should be noted that much of this includes payments for spouses. Further, many recipients do not receive a social insurance top-up pension.
Of course, this doesn’t cost the state an average €20,800 per year. Some of this will be returned via the tax system. Further, the pension income is returned to the economy in spending, resulting in greater economic activity and consumption tax revenues.
This doesn’t deter the great campaigners.
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