DUBLIN (Reuters) - Changes to Ireland’s public sector pensions system, agreed as part of an EU-IMF bailout, will save the country billions of euros, the minister in charge of public sector reform said on Sunday.
Brendan Howlin said the changes, which mean public sector pensions will be calculated on the basis of a person’s average salary over the lifetime of their career rather than their final salary, would save around 1.5 billion euros (1.3 billion pounds) a year by 2050.
“It will be a number of decades before this impacts. We estimate that by about 2050 the annual pension bill unchecked would be of the order of 5 billion. This should save more than 1.5 billion thereafter,” Howlin told state broadcaster RTE.
The changes will apply to new entrants to the public sector. At present there is a recruitment ban in large parts of the public sector as the government seeks to reduce its huge budget deficit under the terms of its 85 billion euros bailout.
Howlin will publish the pensions legislation this week.
Reporting by Carmel Crimmins; Editing by Greg Mahlich