Parliamentary Question addressed to the Minister for Public Expenditure and Reform

To ask the Minister for Public Expenditure and Reform if the portion of pension resulting from the payment of AVCs will be subject to the proposed public sector pension reduction; and if he will make a statement on the matter.

Reply (Minister for Public Expenditure and Reform ( Mr Howlin)

As the Deputy will be aware, AVCs are private funding arrangements for augmentation of pension benefits which are facilitated by individual public service employers, in particular, in respect of payroll deduction. Benefits realised are paid by the AVC provider, not by the public service employer, and are, therefore, not subject to the Public Service Pension Reduction (PSPR). In those cases where AVC funds are utilised to purchase service in public service pension schemes, no distinction is made, for PSPR purposes, in respect of that part of the pension which is derived from the AVC transfer. This is consistent with the practice applying generally i.e. since its introduction on 1 January 2011, the PSPR has applied and will continue to apply to affected public service pensions in an across-the-board fashion, with no distinction or exception being made in respect of any part of a pension which derives from a particular source, for example from purchased or transferred service.