Employers' group Ibec has said that the benchmarking body must take account of the value of "favourable" pensions enjoyed by public sector employees in its determinations on future pay scales.
In a written submission to the benchmarking body made last month, Ibec said that public sector pensions were much more valuable than those available in the private sector.
It maintained that the average public sector pension was worth 13.5 per cent of salary more than the average private sector pension. It said that the previous benchmarking report in 2002 had not set out clearly how the vastly superior pension benefits enjoyed by public servants had been taken into account in its recommendation on pay levels.
The new benchmarking body, which is due to report towards the end of the year, is examining pay scales across the public sector in comparison with groups in the private sector.
Ibec said that based on an average public sector salary of €50,000, the total exchequer liability for public sector pensions was currently estimated at €100 billion, or about three times the national debt.
Ibec said that the majority of public servants were provided with defined benefit occupational pension schemes, which set out a guaranteed retirement income.
It said that one of the most significant advantages of a public sector pension was that retirement benefits were linked directly to the salary scale of a pensioner's former employment.
"This pay-parity concept means that public sector workers can expect to benefit from much higher pension increases on retirement than members of a defined benefit scheme in the private sector."
It said that such private schemes were generally indexed at a rate less than full inflation. It also maintained that the rising cost of such schemes had resulted in a significant shift in the private sector towards defined contribution schemes, which did not provide a guaranteed income.
Ibec said that its research indicated that the market value of the employer contribution for an average public sector pension equated to 25 per cent of salary.
"In effect this means that if a public sector worker was to take up employment in the private sector, their employer would have to contribute 25 per cent of their salary to a defined benefit scheme in order to provide them with the same level of pension benefit."
It said that the average employer contribution in the private sector, where a pension scheme existed, was 11.5 per cent.
Ibec also argued that another major advantage associated with public sector pensions was the State guarantee to meet all future liabilities.
"No pension in the private sector has such a watertight guarantee. When comparing the value of pensions in the two sectors, the absence of risk associated with public sector pensions must be fully accounted for . . ." the submission stated.
