EMPLOYERS HAVE called for pension reform to be extended to current members of the public sector, not just new entrants. Employers’ group Ibec says the move would deliver additional savings of more than €20 billion.

The group welcomed the recent announcement of plans to cut the cost of pensions for new recruits to the public service but said reform needed to be much more radical.

“Ireland is simply not in a position to fund existing public service pension liabilities,” said Ibec director Brendan McGinty.

Speaking in advance of the group’s annual HR Leadership Summit in Dublin today, Ibec said existing public service workers should no longer qualify for pension on the basis of final salary but on average salary over their remaining years’ service.

However, the Government is unlikely to act on the Ibec call in the short term as it looks to continue to work under the Croke Park agreement which runs until 2014 and says that there will be no change in current arrangements on pension indexation arrangements for existing public servants.

The measures announced by Minister for Public Expenditure and Reform Brendan Howlin in the Public Service Pensions (Single Scheme) and Remuneration Bill 2011 are expected to deliver annual savings of €1.8 billion but not until the middle of the century.

Ibec says switching existing public servants to career averaging for future service would reduce existing liabilities by about €20 billion.

It says automatic increases in pay for pensioners has cost the State €1.8 billion between 2006 and 2011 and that this automatic link between pension income and pay awards to working staff must be cut.