Press Release

Minister Mary Harney announces voluntary early retirement/severance schemes for management and administrative grades and support staff in the health sector

The Minister for Health and Children, Mary Harney T.D., announced today (Monday 1st November, 2010) that the Government has decided to approve a voluntary early retirement scheme and a voluntary redundancy scheme for certain categories of staff in the public health service.

HSE management has informed staff of the decision this morning and has also briefed trade union representatives.

The purpose of the schemes is to achieve a permanent reduction in the numbers employed in the public health sector from 2011 onwards and to facilitate health service reform. The Government has decided that funding of up to €400m will be made available in 2010 to fund the up-front costs of both schemes.

The Minister confirmed that the schemes will be open to both management and administrative grades, and support staff, but said that priority will be given to the management and administrative grades. Those wishing to avail of the schemes must retire or resign by 30 December 2010.

The Minister said: “The Croke Park Agreement provides that the Government may offer voluntary mechanisms to exit the public service in specific sectors, bodies, locations or services.

“I am pleased that the Minister for Finance has found it possible to provide funding this year to meet the upfront costs of these two schemes.

There is general acceptance of the need to reduce the numbers of management and administrative staff in the health service. For that reason, all applications from management and administrative staff to avail of the schemes will be approved.

“It has been decided, given that funding is available this year, to offer the schemes to support staff also. There is scope for greater efficiency in the way these services are delivered.

“These are voluntary schemes. It is a matter for each individual employee in the grades concerned to decide whether she/he wishes to avail of them. However, the terms on offer, particularly given the current budgetary, are fair and reasonable. The schemes will be available on a once-off basis to employees in the grades concerned and will not be repeated.

“The voluntary nature of the schemes means it is not possible to predict how many individuals will avail of the schemes. Whatever the uptake is, the HSE and health service employers will have to use the other provisions of the Croke Park Agreement to ensure they continue to deliver services with reducing numbers.”

Full details of the package are available on the HSE website.

Background

Summary of Voluntary early Retirement and Voluntary Redundancy package for target groups in the health service.

Applications from management/administration staff will be prioritised over those from support staff in all cases, and will be approved automatically subject to the overall cost of the schemes not being breached. Approval for applications from support staff will depend on the numbers of management and administrative staff who apply and the overall cap on costs not being breached.

Voluntary Early Retirement Scheme (VER)

The VER scheme is open to eligible employees who are at least 50 years of age and over by 19 November 2010, who have already accrued entitlement to preserved superannuation benefits under a public health service scheme (2 calendar years’ reckonable service) at that date, and who have not yet reached normal preserved pension age (60 or 65 as appropriate).

The scheme provides for

  • Immediate payment of pension entitlement on retirement, with no reduction in respect of payment prior to minimum retirement age (no actuarial reduction).
  • Immediate payment of pension related lump sum entitlement on retirement, i.e. full lump sum entitlement accrued to retirement date with no reduction in respect of payment prior to minimum retirement age (no actuarial reduction).

The January 2010 pay reductions will be disregarded for the purpose of calculating pensionable remuneration under the VER , i.e. payment will be based on salary rates applicable at 31st December 2009.

Voluntary Redundancy Scheme

The Voluntary Redundancy Scheme will apply to those in the target categories who are under preserved pension age at 19 November 2010, who have already accrued entitlement to preserved superannuation benefits under a public health service scheme (2 calendar years’ reckonable service) at that date.

The voluntary redundancy terms provide for the payment of a severance payment of 3 weeks pay per year of actual service plus statutory entitlement under the Redundancy Payments Acts, or the equivalent, subject to an overall limit of

  • (1) 2 years pay; or, if less
  • (2) one-half of the salary payable to preserved pension age.

Preserved pension and lump sum payable on attaining preserved pension age (60 or 65, as appropriate).

Employees who pay modified PRSI rates (Class D) will receive the equivalent terms to those with statutory entitlements.

Process for application and timeframe

Employees in the eligible groups have up to 19 November 2010 to submit completed application forms under the relevant scheme. All applicants whose application is approved must confirm their acceptance of the offer by the 30 November 2010 and their decision is irrevocable from that date.

The absolute deadline for departure from the health service under either scheme is 30 December 2010.