THE REPUBLIC’S largest public service employer, the Health Service Executive, has said it will make savings on average of only about 33 per cent on the salaries of each of its staff who leave before pension changes are introduced next month.
The executive expects that more than 3,000 may leave before the expiry of the Government’s “grace period” at the end of February. Those leaving after this date will leave on inferior pension terms, prompting an exodus of thousands next month.
However chief executive Cathal Magee told the Dáil Public Accounts Committee yesterday that when a staff member left, it lost out on their superannuation contribution as well as their health levy payment. He said the executive had to pay out the cost of the lump sum payment and pension from funds for the year.
On average there was only about a saving of one-third, even if the person was not replaced.
Last night Fianna Fáil questioned the actual level of savings which will be made through the several thousand retirements across the public service in the weeks ahead.
However, the Department of Public Expenditure and Reform said that reduced numbers on the State payroll would produce the anticipated savings of about €2.5 million in the coming years.
Fianna Fáil Public Accounts Committee member Seán Fleming said: “The Minister for Public Expenditure and Reform, Brendan Howlin, has refused. . . to reveal the actual net savings to the taxpayer as a result of many people retiring from the public service.
“It was established with the HSE today that based on expected numbers of retiring staff that the gross cost to the HSE will be €183 million this year.
“However Mr Magee also confirmed. . . that this will lead to annual payroll savings of just €57 million. The cost of these retirements is three times the amount of the annual savings to the HSE.”
Mr Fleming said that the HSE had confirmed that the cost of the lump sums, the cost of the pensions of those retiring, the loss of the levy from retired employees and the loss of the superannuation payments from retired employees must be taken into account to establish the actual true net cost of these retirements.
He said that the Minister had refused to acknowledge or debate these facts.
However, a spokeswoman for the department said the reductions would deliver €2.5 billion pay savings.
“In 2008 the pay bill was €17.2 billion, in 2015 it is forecast as €14.7 billion. This is a difference of €2.5 billion.”
The spokeswoman added that “the Government targets in relation to pay bill have always been based on gross pay bill. This is consistent with the approach adopted in the previous government’s national recovery plan.”
