An improved pension sought by directly elected mayor of Limerick John Moran could end up costing an extra €320,000 for just a single term of office, Government officials have said.
The Department of Public Expenditure said it could not sanction fast-accruing benefits for Moran, adding such a move would set a risky precedent.
A standard pension arrangement for the mayor from one five-year term was estimated to have a net cost of just over €124,000 based on 20 years of retirement.
However, the fast-accruing pension that Moran sought, the same as that of a junior minister, had an estimated cost of almost €450,000.
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Officials said the difference was close to €325,000 and that if granted, it would likely apply to other directly elected mayors in future.
The estimates were based on a mayor serving one five-year term, meaning the potential cost would be even higher if they were re-elected.
An internal department submission suggested other people could start looking for special pension deals where they would look to “mix and match salary and retirement terms”.
“The decoupling of pension and salary entitlements for new posts would set a precedent that could create challenges for maintaining cohesive employment and retirement terms across the public service.”
Moran had sought the enhanced retirement benefits that apply to Ministers of State.
A business case submitted by the Department of Housing supported his request and said that at the very least, enhanced pension terms for TDs and Senators should apply to the position.
However, the Department of Public Expenditure (DPER) disagreed and said arrangements should be consistent with chief executives of local authorities.
An internal submission said: “A decision to adhere to the original sanction would also be associated with significantly lower exchequer liabilities, with cumulative savings of over €300,000 over the retirement span of someone who held the office for one five-year term.”
“There is also a possibility of other mayoral posts being created in the future, for which the Mayor of Limerick terms will likely serve as a benchmark.”
It said the bigger risk was that others would seek to “capitalise” to try to wangle better pension terms in State jobs.
“[This] would in turn have an inflationary effect on overall compensation packages for senior public servants,” the department said.
A decision would also be needed on how to manage a situation where a directly elected mayor reached, or had already passed, the age of 70, it said.
Standard members of the public service pension scheme are generally required to step down at 70, but a directly elected mayor could, technically, top the poll at any age.
A letter was subsequently sent by the DPER to the Department of Housing saying it could not agree to any enhanced terms.
It said the “unique nature” of the position was acknowledged but that pension terms had to be compatible with the original sanction for the role.
The letter concluded: “Therefore, in line with current pension policy, the position of Mayor of Limerick shall be pensionable on a standard accrual basis.”
Asked about the records, a spokesperson for the DPER said it had nothing further to add.
