Unions facing tough choices in pension 'generation game'
It is a tough choice that many union stalwarts will find unpalatable - but unless older public sector workers with "gold plated" benefits make higher contributions, then younger recruits will suffer more pain.
The Government faces a major battle to hike the amounts that state workers pay towards their retirement, after a report revealed vast differences in the value of their benefits.
Pensions experts say the younger generation is having to fund its retirement almost entirely and has a good case to see the pension levy scrapped.
The Government could choose to defend the status quo, and try to agree the same increased contribution for all. Or it could opt to divide and conquer - asking some to pay more than others.
The Irish Independent revealed that the first report of the Public Service Pay Commission - due out next week - will support the plan to raise contributions, by keeping a pension levy in place.
Pensions expert Tony Gilhawley warned against adopting a "one size fits all" approach in any new deal with unions when it comes to deciding who pays more. He said a standardised approach would benefit those with the biggest pension pots, who have longer service or lucrative fast-track pensions.
And this would be at the expense of the newest recruits.
Unions are already trying to regain lost ground after recruits suffered a 10pc pay cut during the recession, when they focused on defending their existing members' pay.
But they now face a new front when it comes to defending the interests of their young and future members.
The Government is cognisant of an 18pc gap between public and private pensions, as talks on a new public sector pay deal begin later this month.
And a report by the Department of Public Expenditure and Reform also reveals the huge gaps between pension benefits within the public sector.
Gardaí, for instance, are on remarkably better pension entitlements than a nurse or teacher who joined at the same time.
Public sector staff who joined after 2013 have to pay virtually the full cost of their pension, when the pension levy is taken into account.
Mr Gilhawley said there are three groups within the public service in terms of pension benefits, yet all pay the same pension levy.
He said those who enjoy "gold plated" benefits were recruited before April 6, 1995, and civil servants get the best deal of all.
The "silver" group joined between April 6, 1995, and April 1, 2004.
The "bronze" group joined between April 1, 2004, and January 1, 2013. Those who joined after that are practically paying for their own pensions.
"If I was a post-January 2013 public servant, particularly a civil servant, teacher or nurse, I'd feel pretty cheesed off at having to pay the pension levy. There is a strong case that the levy should vary between the gold, silver and bronze categories, with the gold paying most and bronze paying least.
"The post-2013 people, who are in the career average scheme, have a very strong case to make that they should be exempted from the levy entirely."