Reform needed now, not in 2050
Published 30/09/2011 | 05:00
There was more than a touch of St Augustine's prayer, "Lord make good, but not yet", about the reforms to public sector pensions announced by Public Expenditure and Reform Minister Brendan Howlin yesterday.
While the reforms, which tie public sector pensions to average career earnings rather than, as was the case previously, to the final salary, and break the link between pensions and subsequent pay increases, are welcome they only apply to new entrants rather than to existing public sector workers.
What this means is that the reforms announced yesterday won't generate any significant savings this side of 2050. While the €1.8bn annual savings which the reforms will eventually generate are not to be sneezed at, the fact is that we need savings in the €2.9bn public sector pensions bill now, not some time in the second half of the century.