Financial Emergency Measures in the Public Interest Acts 2009 – 2016 (FEMPI)
Beginning in 2009, in order to deal with the financial emergency, governments of various hues introduced measures to reduce public salaries and pensions. These measures were meant to be temporary and it was envisaged that there would be salary and pension restoration as financial conditions improved.
The process of restoration of pensions began with effect from 1 January 2016 and is still ongoing. It is due to be completed by 1 January 2018.
Two distinct classes of public pensioner exist for FEMPI purposes – persons who retired before 1 March 2012 and those who retired after that date on reduced salaries. The first group is subject to greater reductions in pension, since having retired before the end of the grace period, pension is calculated on the pre FEMPI salary cuts. The present position is that some of them will still be subject to reductions even after “restoration” has taken place
Original Introduction of PSPR:
PSPR was originally introduced for all pensions of persons who retired before 1 March 2012:
PSPR was introduced on 1 January 2011 under the Financial Emergency Measures in the Public Interest Act 2010 (“FEMPI 2010”)
It cut pensions then in payment, along with new pensions awarded until the expiry, at end-February 2012, of the 2010–2012 “grace period”.
During that grace period new retirement pensions were, exceptionally, awarded by reference to higher salaries than the retirees actually earned (being the salaries paid just before the public service pay cuts of January 2010).
Original PSPR rates for Public Servants retiring before 1 March 2012:
| Annual amount of Pension | Reduction |
| Up to €12,000 | Exempt |
| Any amount over €12,000 but not over €24,000 | 6% |
| Any amount over €24,000 but not over €60,000 | 9% |
| Any amount over €60,000 but not over €100,000 | 12% |
| Any amount over €100,000 | 20% |
NOTE: The band-specific reduction rates refer to the slices of income in each band; they do not apply to the whole pension.
Changes and increases in PSPR, (“FEMPI 2013”)
With effect from 1st July 2013, the government introduced a second FEMPI Act, which focused especially on higher value public service pensions.
The PSPR on pensions of up to €34,132 remained the same, but further PSPR increases on pensions over this amount were introduced.
PSPR applicable from 1 July 2013 on pensions over €34,132:
| Annual amount of Pension | Reduction |
| Up to €12,000 | Exempt |
| Any amount over €12,000 but not over €24,000 | 8% |
| Any amount over €24,000 but not over €60,000 | 12% |
| Any amount over €60,000 but not over €100,000 | 17% |
| Any amount over €100,000 | 28% |
(b) Public Servants retiring on or after 1 March 2012:
Pensions awarded after 1 March 2012 were originally exempt from PSPR, since they were based on the reduced salary once the grace period expired.
However, in 2013, The government introduced a second FEMPI Act, (“FEMPI 2013”) in which PSPR was deducted from pensions of those who had retired on or after 1 March 2012 and whose pensions exceeded €32,500. The PSPR rates are set out below:
PSPR rate for retirees post 1 March, 2012:
Pensions under €32,500:
Exempt: no deduction of PSPR
PSPR applicable from 1 July 2013 to 31 December 2015:
| Annual amount of Pension | Reduction |
| Up to €12,000 | Exempt |
| Any amount over €12,000 but not over €24,000 | 2% |
| Any amount over €24,000 but not over €60,000 | 3% |
| Any amount over €60,000 but not over €100,000 | 5% |
| Any amount over €100,000 | 8% |
NOTE: The band-specific reduction rates refer to the slices of income in each band; they do not apply to the whole pension.