The Government has accepted the thrust of the package of reforms recommended earlier this year by the Commission on Public Service Pensions, the Minister for Finance, Mr McCreevy, said yesterday. In line with the terms of the Programme for Prosperity and Fairness, a working group to provide for implementation of the reforms is to be set up and on receipt of its report, the operational details involved will be agreed by the Government. The arrangements will be in place within six months, Mr McCreevy said.The commission concluded that the cost of public sector pensions would quadruple by 2027 to €3.06 billion (£2.41 billion).

In its final report, it recommended a new 1 per cent pensions contribution by public servants. This, it was envisaged, would consolidate the long-term financial basis of public service schemes.

Civil servants appointed before 1995 pay only 1.5 per cent of their gross increase towards benefits for their spouses and children. Those appointed after 1995, however, pay this amount plus another 1.5 per cent for personal benefits.

Measures recommended by the commission included:

flexibility in the lead-in to retirement;

early retirement at 50, at full cost to the worker;

a new early retirement provision without actuarial reduction of benefits, "in limited circumstances".

Parallel structures were to be established for the Garda S∅ochβna and the Defence Forces, the Minister said. The public service unions - specifically SIPTU, the INTO and the Public Service Executive Union - had expressed some concern relating to pensions issues, both inside and outside the commission, said Mr McCreevy. They said they could not support recommendations to increase the standard retirement ages of 60-65 to a single retirement age of 65.

The Department of Finance has had discussions with the ICTU's public services committee to advise on implementation of the commission's report.