The savings of the Irish public sector Single Scheme pension, introduced in 2013, will materialise in 2050, according to an expenditure review by the Department for Public Expenditure and Reform (DPER).

Publishing an update on the scheme, the report said it was “arguably the most fundamental reform to date” within public sector pensions. Introduced in January 2013, the scheme is available for all new public sector workers, as well as those who have a break in service of more than 26 weeks.

When the Single Scheme was introduced, it was projected to reduce long-term expenditure on public service pensions by 35 per cent, primarily through three elements: later normal retirement ages, the career average method of calculating benefits and the application of CPI indexation.

“The majority of these savings will materialise after 2050, when significant volumes of Single Scheme members will become eligible to retire. In the near future, DPER intend to conduct an updated actuarial analysis of the long-term projected savings the Single Scheme will deliver,” the report stated.

By the end of 2019 there were 140,000 active members of the scheme, with an average annual increase in membership of 20,000 since 2013. Scheme membership will increase further and depending on assumptions used, could range between 180,000 and 200,000 at the end of 2025.

In addition, Single Scheme members contributed €201m in Single Scheme contributions in 2019 and a further €69m in Additional Superannuation Contributions (ASC) in 2019.

Single Scheme benefit pay outs are not expected to be a significant portion of the overall public service pension bill until the second half of the century and are anticipated to remain below €100m annually until after 2040.

“The reform measures introduced since 1 January 2013, with higher contributions required (through the introduction of ASC) combined with lower retirement benefits payable (through benefits based on career-average pay, later normal retirement ages and CPI indexation), have clearly improved the sustainability of Irish public service pensions,” the report concluded.

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