Opinion of the European Central Bank of 11 November 2015 on pay and pension provisions (CON/2015/44)
Date: 2015-11-11
Institutions: European Central Bank
Subjects: Ireland, central bank, national law, pension scheme, public service employee, remuneration of work

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 11 November 2015  

on pay and pension provisions  

(CON/2015/44) 

Introduction and legal basis 

On  23  October  2015  the  European  Central  Bank  (ECB)  received  a  request  from  the  Irish  Minister  for 

Public  Expenditure  and  Reform  for  an  opinion  on  the  Financial  Emergency  Measures  in  the  Public 

Interest Bill 2015 (hereinafter the ‘draft law’). 

The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the 
Functioning of the European Union and the third indent of Article 2(1) of Council Decision 98/415/EC 1, as 

the  draft  law  relates  to  the  Central  Bank  of  Ireland  (CBI).  In  accordance  with  the  first  sentence  of 

Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted 

this opinion. 

1.  

Purpose of the draft law 

1.1   The draft law amends the five Financial Emergency Measures in the Public Interest (FEMPI) Acts 

that  were adopted between 2009 and 2013  and reduced the remuneration of public servants and 

pensions  payable  to  former  public  servants. The  draft  law  amends  the  previous  FEMPI  Acts  with 

effect  from  1  January  2016  in  order  to  begin  a  partial  and  phased  reversal  of  the  remuneration 

reductions  made  under  those  Acts  and  to  make  provision  for  the  partial  reversal  of  pension 

reductions imposed on public servants. 

1.2   For that purpose, Part 2 of the draft law (Remuneration – Public Servants Generally) amends the 

Financial Emergency Measures in the  Public Interest  Act 2009  (hereinafter the  ‘2009  Act’),  which 

was  introduced  as  part  of  the  Government’s  programme  of  measures  to  urgently  address  the 

serious  position  of  the  public  finances,  and  which  provided  for  deductions  to  be  made  from  the 

remuneration of public servants. The draft law provides for the restoration in part or in whole of the 

basic  salary  of  a  public  servant,  where  that  reduced  basic  salary  does  not  exceed  EUR  24  000, 

EUR 31 000 or EUR 65 000 (as further detailed in the draft law). In addition, the draft law provides 

for  the  phased  restoration  of  the  annual  remuneration  of  a  public  servant  where  their  reduced 

annual  remuneration  is  above  EUR  65  000  or  EUR  110  000.  Finally,  the  draft  law  provides  the 

Minister with powers to correct anomalies relating to points on the pay scale of the public service 

that  may  result  from  the  draft  law,  by  increasing  the  basic  salary  applicable.  A  public  servant  is 

defined in the 2009 Act as a person who is employed by, or who holds any office or other position 

1  

Council  Decision  98/415/EC  of  29 June  1998  on  the  consultation  of  the  European  Central  Bank  by  national 
authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42). 

 
 
 
 
                                                 
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in,  a  public  service  body.  The  CBI  is  explicitly  defined  as  coming  within  the  meaning  of  ‘public 

service body’. It follows, therefore, that the 2009 Act and the draft law apply to both employees and 

office holders of the CBI.  

1.3  Part 3 of the draft law (Pension-related deductions and Pensions) amends the 2009 Act to effect a 

reduction  in  the  amount  deducted  from  the  salaries  of  persons  in  the  public  service  who  are 

members of an occupational pension scheme or pension arrangement. The draft law also amends 

the  Financial  Emergency  Measures  in  the  Public  Interest  Act  2010  (hereinafter  the  ‘2010  Act’)  to 

increase the amount of pension and other benefits payable to or in respect of persons that were in 

the public service under an occupational pension scheme or pension arrangement. To this end, the 

draft  law  commences  a  partial  and  phased  reversal  of  the  reductions  applied  to  public  service 

pensions  over  the  next  three  years.  Public  service  pensions  are  defined  as  including  pensions 

payable to or in respect of a public servant or former public servant under a public service pension 

scheme. Public servants are defined as persons  who  are employed by, or who hold any office or 

other position in a public service body, including the CBI, and include an office holder. Both current 

and  former  employees  and  office  holders  of  the  CBI  come  within  the  scope  of  application  of  the 

2010  Act,  and  thus  also  the  draft  law.  The  Financial  Emergency  Measures  in  the  Public  Interest 

(Amendment)  Act  2011  (hereinafter  the  ‘2011  Act’)  amended  the  2010  Act  by  introducing  a 

provision pursuant to which the 2010 Act applies in respect of employees and office holders of the 

CBI  only  with  its consent,  given in  writing to the Minister for Finance by  the CBI’s Governor, and 

with the consent of the Minister for Finance. 

1.4  Part 4 of the draft law (Miscellaneous) amends the 2009 Act so that the pay of public servants may 

be adjusted to reflect the terms of a collective agreement (the Haddington Road Agreement).  

1.5   Currently, the CBI enjoys statutory autonomy in determining its staff policy, including remuneration, 

with the CBI’s officers and employees subject to individual employment contracts and to collective 

bargaining  agreements  entered  into  between  the  CBI  and  staff  representative  groups.  The 

measures  provided  for  in  the  draft  law,  as  is  the  case  with  the  2009  Act  and  the  2010  Act, 

represent  a  departure  from  that  regime  in  so  far  as  the  provisions  proposed  are  to  be  imposed 

unilaterally. 

2. 

Central bank independence 

2.1  As the draft law applies to and directly affects the CBI’s decision-making bodies and its employees, 

it should be examined from the perspective of central bank independence, in particular institutional 

and financial independence, as  well as that of the  personal independence of the members of the 

CBI’s decision-making bodies. It is worth noting that the draft law commences a partial and phased 

reversal of the provisions of the five FEMPI Acts introduced between 2009 and 2013, on which the 
ECB  has  already  issued  its  opinion2,  by  partially  reversing  the  remuneration  and  pension 

reductions to public servants. Nevertheless, it is worth restating the principles outlined in the ECB’s 

previous opinions. 

2  

See Opinions CON/2009/15, CON/2012/6 and CON/2013/46. All ECB opinions are published on the ECB’s website 
at www.ecb.europa.eu. 

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2.2  The principle of central bank independence as enshrined in Article 130 of the Treaty prohibits third 

parties, including the governments of the Member States, from issuing instructions to the national 

central  banks  (NCBs).  In  addition,  the  principle  of  central  bank  independence  means  that  third 

parties  may  not  influence,  directly  or  indirectly,  an  NCB  in  the  performance  of  its  tasks  or  as 

regards  its  ability  to  fulfil  its  mandate:  both  operationally  in  terms  of  manpower,  and  in  terms  of 
appropriate financial resources3. 

Financial independence 

2.3  Member States may not impair an NCB’s ability to employ and retain the qualified staff necessary 

for the NCB to perform independently the tasks conferred on it by the Treaty and the Statute of the 

European System of Central Banks and of the European Central Bank. Furthermore, an NCB may 

not  be  put  into  a  position  where  it  has  limited  control  or  no  control  over  its  staff,  or  where  the 

government  of  a  Member  State  can  influence  its  policy  on  staff  matters.  To  protect  autonomy  in 

staff matters, the ECB has consistently recommended in previous opinions and in its convergence 

reports  that  any  amendment  to  legislation  on  remuneration  for  members  of  an  NCB’s  decision-

making  bodies  and  its  employees  should  be  decided  in  close  and  effective  cooperation  with  the 

NCB,  taking  due  account  of  its  views,  to  ensure  the  ongoing  ability  of  the  NCB  to  independently 
carry out its tasks. Autonomy in staff matters extends to issues relating to staff pensions 4. 

2.4  Given  that  the  CBI’s  employees  are  employed  under  the  conditions  (including  conditions  as  to 
remuneration and allowances) set by the Central Bank Commission5, in order to protect the CBI’s 

autonomy in staff matters legislative provisions affecting the remuneration of members of the CBI’s 

decision-making  bodies  and  employees  should  be  drafted  in  close  and  effective  cooperation  with 
the CBI6.  

2.5  As  regards  the  provisions  on  pension-related  deductions  and  pensions  applicable  to  the  CBI’s 

officers and employees, the ECB notes that  Section  1A of the 2010  Act, as  inserted by the  2011 

Act,  required  the  Minister  to  obtain  the  written  consent  of  the  CBI’s  Governor  in  respect  of 

reductions  to  pensions  of  former  CBI  employees  and  office  holders,  and  that  this  consent  was 

granted. 

Personal independence of members of the CBI’s decision-making bodies 

2.6  Furthermore, Member States may not seek to influence the members of an NCB’s decision-making 

bodies by amending national legislation affecting their remuneration. Such legislation, as a matter 
of principle, should apply only in respect of future appointments 7. The draft law applies not only to 

the  CBI’s  decision-making  bodies  but  also  more  generally  to  all  public  servants  in  Ireland  who 

come  within  its  scope  and,  as  such,  does  not  seek  directly  or  indirectly  to  influence  the  CBI’s 

decision-making  bodies  in  the  performance  of  their  tasks.  The  provisions  will  therefore  be 

considered  compatible  with 

the  principle  of  personal 

independence,  as 

long  as 

the 

3  
4  
5  

6  
7  

See, for example, the ECB’s Convergence Report 2014, p. 26, and paragraph 6 of Opinion CON/2012/89.  
See the ECB’s Convergence Report June 2014, p. 27 and the reference to ECB opinions made there. 

See section 6D of the Central Bank of Ireland Act 1942, as inserted by section 7 of the Central Bank and Financial 
Services Authority of Ireland Act 2003 and as amended. 
See also Opinion CON/2012/89 and paragraph 2.6 of Opinion CON/2013/41. 

See the ECB’s Convergence Report June 2014, p. 23. 

3 

                                                 
abovementioned requirements in respect of the principle of financial independence are taken into 
account8. 

ECB-PUBLIC 

This opinion will be published on the ECB’s website 

Done at Frankfurt am Main, 11 November 2015. 

[signed] 

The President of the ECB 

Mario DRAGHI 

8  

See also paragraph 3.2.10 of Opinion CON/2010/80. 

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