HSE: Voluntary Early Retirement Scheme and Voluntary Redundancy Scheme.

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belview

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On the basis of the redundancy terms mentioned today these redundancies will only have a payback in the fifth year after the individual vacates their job.

As I understand it the terms are as follows:
Individuals will recieve an immediate pension with no acuarial reduction.
Individuals must sign up to go by mid Novemeber 2010 and leave by the 31st December 2010.
Individuals availing of these terms must be 50 years or over by 31st December.
Lump sum to be based on 3 weeks pay per year of service and capped at 2 years salary.
Individuals will also receive statutory redundancy terms if eligible.

Take an example of an individual on 60 k a year who is 55 years of age and has service of 35 years. The costs and savings to the HSE ( the exchequer) of this type of individual availing of the terms would be as follows.

Year Costs Savings

1 lump Sum of -----------------------120k Salary 60k
Statutory Redundancy payment----- 42k
Pension -----------------------------30k

2 Pension -----------------------------30k Salary 60k


3 Pension-----------------------------30k Salary 60k


4 Pension ----------------------------30k Salary 60k

TOTAL AFTER 4 YEARS 252K versus 240K

N.B THESE FIGURES DO NOT INCLUDE THE MASSIVE COST OF BACK FUNDING THE PENSION COST OF PAYING OUT A PENSION TO SOMEONE 10 YEARS EARLIER THAN NORMAL.


So its only in the 5th year after the person leaves their job that any savings accrue to the State and thats on the far from certain basis that there is a real job saving i.e not replaced by a contractor or consultant and that those staying on in the HSE absorb any residual work.

Sound like to me that we are once again spending money without getting any real gain
 
Nothing new here. I know an accountant who 'retired' from a well know guango in the 80s, during a previous government initiative to cut costs. He started to work for them as a consultant the following week.
 
Hi Belview,
Where did you hear you had to be over 50? Is there more detailed info available on what's on offer and the Ts&Cs....my sister (late 20's) is working in Admin in St. Vincents so is she even eligible?
Thanks,
FTB1975
 
Yes she is they are offering it to anyone with over 2 years service i think there is more on the HSE website
 
Year Costs Savings

1 lump Sum of -----------------------120k Salary 60k
Statutory Redundancy payment----- 42k
Pension -----------------------------30k

2 Pension -----------------------------30k Salary 60k


3 Pension-----------------------------30k Salary 60k


4 Pension ----------------------------30k Salary 60k

TOTAL AFTER 4 YEARS 252K versus 240K

Isn't the lump sum payment for a public servant 1.5 times their final salary (i.e. 90K in your example rather than 120K)?
 
There are 2 separate schemes on offer. Voluntary Early retirement for people 50 plus and a voluntary redundancy scheme for anyone with 2 years service.

[broken link removed]
 
Expect the tax free rules applying to redundancy lump sums to change in the December budget.

Hence the sign up deadline of 19th November should see a stampede of punters getting in before the changes take effect for the new tax year starting on 1st January.
 
Belview, I think your figures are wrong. 120k is the max your sample can get as a lump sum. You should also factor in what tax & levies will be paid by the pensioner.Full details here [broken link removed]
 
Belview your figures are wrong. Please stick to facts. There are two options.
1. Early Retirement
2. Voluntary Redunancy.

Under early retirement the maximum lump sum one can get is 1.5 times their salary. To get this you must have worked and contributed to pension for 40 years. If you have less then 40 years service your lump sum is calculated pro-rata. A person on a salary of €60k with 40 years pension contributions would get a Lump sum of €90k. A person on 60k with 35 years service would get approx 78.75k. A person with 20 years service would get a lump sum of €45k
If a person avails of this early retirement they would not get redundancy payment.

The voluntary redundancy scheme maximum redundancy payout is 2 times salary. The deal of 3 weeks pay & 2 weeks statutory is very low! It is way below a lot of recent redundancy awarded. Aer Lingus staff got 6 weeks pay, National Irish Bank Staff got 7.25 weeks pay for every year of service! An Post employees offered 9 weeks pay per yearof service. Intel workers offered 6 weeks pay & 2 week statutory! Also there is a clause that prevents staff taking up employment for 7 years
 
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The essential point here is that people with little or no work are being paid large sums of money to get out of the way.
This is money that the country cant afford.
The point about other organisations paying out better redundancy payments does not apply anymore. That was in the Bertie era of monty python economics.
And most importantly of all it is far from certain given the trade union attitudes that the " stayers" in the HSE will absorb even the small volume of residual work left after the " goers" depart
 
Implications for Social Welfare ?

Does anyone know what the social welfare implications are for someone who takes up the HSE voluntary redundancy scheme ? The trade union lady on morning ireland this morning said that people employed by the HSE prior to 1995 will never be entitled to social welfare again.......??
 
The essential point here is that people with little or no work are being paid large sums of money to get out of the way.

Hopefully this is correct, but isnt getting rid of these people what the croke park agreement is all about? Getting rid of these waster?



The point about other organisations paying out better redundancy payments does not apply anymore.

Its voluntary redundancy, they're not being sacked so they have to be offered an amount that will make them go. The fact that its a lot less than previously offered shows at least some attempt by the govt. to not overspend..

And most importantly of all it is far from certain given the trade union attitudes that the " stayers" in the HSE will absorb even the small volume of residual work left after the " goers" depart

Again, your view on the CPA is quite clear, but i've a little bit of faith in it, so i think the work will be absorbed by the "stayers".
 
Hse vsr & ver

Does anyone know how a redundancy payment would be taxed for a public servant? The Revenue website is very difficult to understand. Slim
 
The essential point here is that people with little or no work are being paid large sums of money to get out of the way.
This is money that the country cant afford.
The point about other organisations paying out better redundancy payments does not apply anymore. That was in the Bertie era of monty python economics.
And most importantly of all it is far from certain given the trade union attitudes that the " stayers" in the HSE will absorb even the small volume of residual work left after the " goers" depart


Why are they being offered 2 weeks statutory on top of the 3 weeks?
thanks
 
Why are they being offered 2 weeks statutory on top of the 3 weeks?
thanks
They're not. It's max of 3 weeks per year, subject to max weekly pay €600 for the purpose of the calculation. Slim
 
They're not. It's max of 3 weeks per year, subject to max weekly pay €600 for the purpose of the calculation. Slim

Are you sure? According to the Irish Times "staff taking the voluntary redundancy scheme will receive three weeks salary for each year of service in addition to their statutory entitlement, up to a limit of two years pay."

In reply to suemoo1's question, I presume the three additional weeks are being offered to entice a large take up. Under the Croke Park agreement, compulsory redundancies are a no-go at the moment, and offering just statutory redundancy payments wouldn't generate the same level of interest.
 
I thought it was 3 weeks plus statutory leave. Thats what was mentioned on the news last night.
 
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