Retired civil servants and ministers to have pension deductions checked
Around 13,000 current and former civil servants and ministers are to have their pension deductions assessed for possible anomalies, Public Expenditure Minister Jack Chambers said.
Mr Chambers said that serious and systemic operational issues in the National Shared Services Office (NSSO) were brought to his attention in late March, after which further issues were found.
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Because of administrative errors in the NSSO, members of the current Government, some members of previous governments and a number of office holders have had incorrect application of pension deductions.
Retired civil servants who were in receipt of allowances prior to retirement were also the subject of miscalculations.
The NSSO provides services such as human resources, payroll, pension, and finance management services to public service bodies.
The full scale of the issues, relating to payroll and pensions, and the number of people impacted is still being assessed.
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The Cabinet was briefed on the administrative errors in the NSSO on Tuesday.
There are three cohorts impacted by these errors: current and former ministers and office holders, Civil Service retirees with work-sharing patterns, and retired senior civil servants.
The Department of Public Expenditure said the issues were not the fault of any of the individuals impacted.
A pool of 13,000 retired civil servants is being assessed, a small fraction of whom are expected to be affected by the anomaly.
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One issue relates to the miscalculation and under-payment of pensions for some work-sharing Civil Service retirees who were in receipt of allowances prior to retirement in the last 20 years or so.
Another issue relates to the incorrect application of pension deductions for most members of the current Government, Ministers of State, some members of previous governments and recent office holders.
This relates to superannuation deductions and Additional Superannuation Contributions (ASC) with respect to salaries, allowances and gifted income.
The NSSO is starting a process to contact ministers to outline the issue to them and to make arrangements for the recoupment of monies owed or to issue refunds as appropriate.
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The amounts involved range from hundreds of euros to the low 30,000s of euro, in terms of monies to be recouped.
A number of ministers are due refunds ranging from hundreds of euros up to the low 20,000s of euro.
The third issue relates to the administration of Chargeable Excess Tax (CT) and Withholding Tax (WHT) in respect of senior grade Civil Service pensioners.
Chargeable Excess Tax is a tax on pension funds at retirement which exceed the Standard Fund Threshold, which is currently €2 million.
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In a small number of cases, this tax was not correctly applied by the NSSO.
Similar to the CET issue, withholding tax is deducted from retirement lump sums over €200,000 and most likely applies to those from principal officer level upwards.
In total between CET and WHT, NSSO has identified 30 cases. The liabilities for this cohort range from a few hundred euros to €280,000.
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Minister for Public Expenditure Jack Chambers said the issues brought to his attention are 'completely unacceptable'.
'The NSSO has responsibility for the essential function of the provision of pay and pensions to public and civil servants and it has failed in this fundamental duty.
'I have instructed the CEO of the NSSO that the multiple errors must be corrected by the NSSO as a matter of urgency, particularly regarding the treatment of retirees who had been on a work-sharing pattern in the Civil Service.'
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