IRELAND - The net cost of pensions to the Exchequer increased by 56.5% between 2004 and 2009 to reach almost €2bn, figures from the department of finance have revealed.

In the document 'Analysis of Exchequer Pay and Pensions Bill 2004-2009' the government confirmed the net pay and pensions bill, or 'Paybill', was equivalent to 12.7% of GDP in 2009.

The Paybill outlines the actual cost to the Exchequer for providing pay and pensions to civil servants, teachers, the Gardai (police force) and the defence forces, as well as amounts set aside for remuneration within grants to health boards and agencies, universities and non-commercial state-sponsored agencies, although it excludes the costs of local authority staff.
Figures showed the pensions of these public sector workers now account for 10.7% of the total Paybill, up from 9.1% in 2004, while the overall cost of pensions has increased from €1.26bn to €1.97bn over the five-year period.

This is equivalent to an increase of 56.5% compared to a rise in pay of just 31.8%, although it noted one of the highest increases was in the health sector where the pension bill increased 48% between 2004 and 2009.

The department of education and science is expected to produce the highest pension costs in 2009 totaling €650m, closely followed by the Health Service Executive which is estimated at €528m, as between them these two departments have almost 50,000 pension members.

However, the report noted the net Paybill will have fallen by 2.2% to €18.3bn in 2009, from €18.8bn in 2008, which it claimed "is the result of the impact of the pension related deduction introduced to take account of the need to reduce public service pay costs".

It stated: "Public servants enjoy significantly better pension terms than the generality of their counterparts in the private sector, both in terms of the benefits of their pension schemes and greater security. It is appropriate that a deduction should be made to reflect this reality."

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