The Tánaiste and Minister for Finance, Brian Cowen TD, has received the Report of the Public Service Benchmarking Body from the Chairman of the Body, Dan O'Keeffe, SC.

The Report covers all the major groups in the public service (apart from top posts which are covered by the Review Body on Higher Remuneration in the Public Sector and craft workers and related grades such as general operatives who are covered by a separate parallel process which is before the Labour  Court at present). 

The Benchmarking Body found that, in general, public service salaries at these levels compare well with the private sector. No increase is recommended for the vast majority of grades examined.

The Benchmarking Body found that the pensions of the public service groups examined are significantly more valuable than those of private sector groups and that the superior value of public service pensions should be quantified at 12%.

Taking the pensions discount into account, increases are recommended for just 15 of the 109 grades examined - the  increases are recommended for some of the more senior grades examined. The cost of the increase is estimated at €50 million (an increase of 0.3% of the paybill of those covered by the report).

“I will be reporting to the Government on the Report next week. The Social Partnership Agreement,  Towards 2016, provides that implementation of the Report will be discussed by the parties in the context of discussions on whatever arrangements on pay and conditions are to be put in place on the expiry of the current public service pay agreement”, the Tánaiste stated.  

“I would like to thank the Chairman  Dan O’Keeffe, SC, and all of the members of the Body and the secretariat for the extensive work they have done in carrying out this examination and the commitment to finalising  the report within the timeframe set”, he added.

The first benchmarking report was completed in 2002 and was not published as the claim that private sector workers by grade, were earning more than their public service counterparts, was an absolute sham. No account was taken of pensions and Ministers got two payments - both as TDs as Ministers. The average increase was 9%.

SEE Sham Benchmarking section here.

SUMMARY:

The Public Service Benchmarking Body carried out a detailed evaluation of the pay and jobs of 109 grades in the public service in accordance with its terms of reference. With the assistance of
consultants, the Body conducted the following exercises:

• examinations of the pay and jobs of the public service grades it was charged with benchmarking and the jobs, pay and reward structures in the private sector. The research methodology adopted in the public service and private sector is described in Chapter 3;
• an examination of the value of public service pensions by comparison with pension arrangements available in the private sector. The outcome of that examination is discussed in Chapter 7; and
• The annual cost of the increases recommended by the Body is in the region of  €50 million on full implementation (this represents an average increase of approximately 0.3% in overall pay costs).

Conclusions

The Body reached the following main conclusions:

• the pensions of the public service groups covered by the benchmarking exercise are significantly more valuable than those of private sector groups;
• having regard to actuarial advice received the Body decided that the superior value of public service pensions should be quantified as 12% of salary and that a discount of this amount should be applied in comparing remuneration levels in the public service and the private sector;
• in general public service salaries compare well with the private sector;
• the comparison exercise conducted by the Body combined with a discount of 12% in respect of the value of public service pensions relative to arrangements in the private sector showed that the salaries of only a small number of the public service grades examined were below private sector rates;
• in general, where remuneration was found to be below private sector levels this arose in the case of some of the more senior grades examined; and
• The annual cost of the increases recommended by the Body is in the region of €50 million on full implementation (this represents an average increase of approximately 0.3% in overall pay costs).

IBEC welcomes Benchmarking Report

IBEC, the business lobby group, said the report of the Public Service Benchmarking Body brings reality into pay settlement in the public service at a time when the economy is facing more uncertainty and employment growth is slowing.

IBEC Director General Turlough O’Sullivan said: “Unlike the report of five years ago, it acknowledges the state-backed pensions enjoyed by public sector employees. As public sector workers do not face competition, it is only fair that their pay be properly matched against those who do. As we seek to restore our competitive edge in the world and protect jobs and living standards for all, pay moderation is essential.

According to the CSO National Employment Survey for 2006, public sector workers enjoy average earnings which are 49% higher than the private sector. Research from the European Central Bank (ECB) found that between 1999 and 2006, average public sector pay in Ireland increased by 67%, while that in the euro area grew by just 22%. In the private sector, average pay in Ireland increased by 42% compared to just 15% in the euro area. Benchmarking has resulted in Irish public sector pay growing faster than any other country in the EU and actual pay levels overtaking those in almost every other OECD country."