Increasing Cost of Public Health Sector Pensions: Impact on the Exchequer

Previous work prepared by this Department has looked at the various factors influencing the HSE pay bill and set out the implications these factors would have on the overall health budget (for example see – Callaghan, 2014; MullinsA, 2015; MullinsB, 2015; Mullinsc, 2017). However, the ongoing annual cost to the HSE for pension payments made to retired health sector workers was not included in any of this analysis. Pension costs are a significant financial burden on the HSE budget every year. Indeed, in 2016 the organisation spent €818 million on this line of expenditure (HSE Report for Joint Employment Control Monitoring Group, December 2016). To date, no analytical publications have been produced looking at this issue. This paper seeks to address this gap in the literature.

Expanding on this, there are a number of factors that would impact on the cost of pensions for the HSE in a given year. In this paper these factors will be explored in detail and the implications for budget sustainability going forward set out. More specifically, the following issues will be explored:

  • An historical look back at HSE retirement numbers over the last five years.
  • The annual cost to the HSE of providing pension cover for retired Health sector workers.
  • The impact of pay agreements on HSE pension costs.
  • An overview as to how health worker pension contributions are used to part-fund HSE pension costs.

Arising from this analysis, the paper concludes with a discussion on the potential pension liability of the HSE going forward and the implications this will have on the Exchequer.

This publication is available here.

This entry was posted in Economic Analysis. Bookmark the permalink.