THE GOVERNMENT decided yesterday not to implement pension reform proposals for public servants in an effort to win support for the Croke Park pay deal. In an apparent U-turn on proposals set out by the Minister for Finance in the budget, the review will not be implemented until after December 2014.
Currently pension increases for retired public servants are based on salary rises awarded to serving staff in the grades they previously held.
However, Mr Lenihan indicated in the budget that the Government would be reviewing the arrangements and would consider linking public service pensions increases to the cost of living.
A new document clarifying elements of the deal was issued by senior officials of the Labour Relations Commission yesterday. It states the Government will not proceed, over the lifetime of the Croke Park deal, with the proposals for public sector pension reform.
“In the prevailing circumstances, the Government has clarified that no change in the current arrangements for the indexation of pensions for current public service pensioners and serving public servants will be implemented during the period of the agreement,” it says.
Senior Government sources insisted last night that that it remained committed to the principles of such a pension review, but that changes would not be implemented during the Croke Park deal’s lifetime.
This puts the review beyond the next general election in 2012.
Sources said the Government could introduce legislation providing for such changes in the interim, but not implement them until post-2014.
Separately the Croke Park deal received a significant boost yesterday when the executive of Impact, the State’s largest public sector union, reversed its position and urged members to support the agreement.
The move followed the issuing of the clarification document and the resolution of a row involving Impact members in the health service on Tuesday night.
Meanwhile, the clarification document also provides assurances for public service staff that the State will not cut pay further during the deal as long as staff comply.