• Do all public sector workers pay towards the cost of their pensions?

Those who joined the public service before 1995 have to make a contribution to their basic pension of between zero and 3.5pc. Those who joined after 1995 make a 5pc contribution, but they were given a special 5pc pay rise to take account of this, meaning that they suffered no net loss.

• What will happen now?

The Government is bringing in a new pensions levy for all public sector workers. It will apply on a graded basis with public sector workers on higher salaries contributing more and those on lower incomes contributing less. It will account for the bulk of the €1.4bn in savings from this year's payroll. Although public sector workers will continue to earn the same, their take home pay will drop.

• How many people are entitled to a public sector pension?

There are around 357,000 workers employed in the civil service, the education sector, the justice sector, the health sector, the local authorities, the non-commercial agencies and the commercial semi-state bodies. (Some of these are on contracts, which do not carry the same pension entitlements). Some 90,000 retired public sector workers receive pensions.

• What is the basic public sector pension and when can public sector workers claim it?

All public servants can look forward to a pension of 50pc of final income, as well as a tax-free lump sum of 150pc of their salary when they retire.

Those who joined before April 1, 2004 can retire at the age of 60 on a full pension, but those who joined after that date can only retire at 65. There are exceptions for gardai, firefighters, and the Defence Forces.

• What are the key advantages of a public sector pension compared to a private sector pension?

All public sector pensions are guaranteed by the State whereas private sector pensions are not (as workers in Waterford Crystal have found out). Due to their "defined benefit" schemes, public sector workers are guaranteed 50pc of their final salary when they retire. Many private sector workers are on "defined contribution" schemes which don't provide a guaranteed level of retirement income.

• Any other advantages?

The size of the pension payment is linked directly to the salary scale of a pensioner's former employment. This means that as wages rise for public sector workers, there are also similar rises in the pensions of retired public sector workers.

• How much are public sector workers' pensions worth compared to the private sector?

This is one of the most controversial questions, and various reports have come up with different figures.

The benchmarking body awarded a "zero increase" to most public servants in 2007 because it concluded that public sector pensions were worth an additional 12pc on top of the their salaries.

But last December, the 'Pension Insecurity in Ireland' study released by UCD academics Dr Shane Whelan and Michael Moloney disputed this. They said the true figure was 30pc when the one million private sector workers without a pension were taken into account. They said a civil servant with an average salary of €45,240 was getting a State-guaranteed pension worth €13,572 a year (in salary terms).

• How much is the exchequer spending on public sector pensions?

Around €1.7billion out of the €20bn set aside for public sector pay this year.

• How does the State pay for public sector pensions?

The schemes are financed on a Pay As You Go basis, meaning that the Exchequer pays its pension liabilities each year as they fall due. But the State has been paying 1pc of gross national product (GNP) into the National Pensions Reserve Fund since 2000, and it is now worth around €20bn. This money is intended to cover some of the future cost of public sector and social welfare pensions.

• How much will the State have to pay for public sector pensions in the future?

By 2060, the average life expectancy for men will be 87 years, and for women 91 years, which means the State will be paying pensions for longer. The Government's Green Paper on pensions says this represents an "excessive future risk to the Exchequer".

A recent report by two UCD academics has estimated that the liability for public sector pensions is currently €100bn, or about three times the national debt. The previous estimate was €75bn.

• What is the Government doing about the situation?

It published its Green Paper on pensions in October 2007 and recently concluded its consultation process. Social and Family Affairs Minister Mary Hanafin has said that the delivery of an "affordable, fair and sustainable" pensions system is a priority.

The State spending watchdog, the Comptroller and Auditor General, is also carrying out an investigation into the cost and efficiency of public sector pensions

- Michael Brennan