Davy stockbrokers have today released a report on public sector pay in Ireland.
The report has found that average public sector wages are €47,400 in Ireland, 40% higher than in the private sector before allowing for differences in pension entitlements and job security.
At most, around half of this pay gap (20%) can be attributed to differences in education, experience, qualifications and other factors.
In the United Kingdom, average public sector wages are £26,200 – almost exactly in line with the private sector (£26,300) and lower than in Ireland.
Furthermore, Ireland’s public/private pay gap is high by European standards, similar to southern European countries. Lower-paid public servants benefit most from the pay gap.
It is estimated that at current annuity rates, a pension that provided €22,000 of annual income (above the contributory pension) would cost €1 million.
Davy Stockbrokers warns that the public sector enjoys retirement benefits that need to be taken into consideration. They calculate that a private sector worker would need to save €590,000 to buy an annuity that matched public sector career-average salary pensions of €23,000 per annum.
According to Davy Stockbrokers, "The overwhelming evidence is that public sector pay rates in Ireland are unusually high relative to the private sector and by European standards. Hence, any successor to the Lansdowne Road agreement should limit pay rises. Also, given the uncertainty of Brexit, pay rises should be conditional on the on-going performance of the economy."
Source: www.businessworld.ie
