Siptu has rejected calls by employers’ body Ibec for the Government to adjust pension entitlements for all public sector workers, “not just new recruits”.

At a debate last night, Ibec’s director of industrial relations at Brendan McGinty described public sector pensions as the “elephant in the room” at a time when private sector pensions were being “decimated”.

Speaking on the reform of the Croke Park agreement, he said he was “incredulous” that increments were still being paid considering the state of the economy. “To be blunt we believe they should be suspended for the remaining duration of the agreement.”

Mr McGinty said it was time to “bite the bullet” and suggested there should be a phased return to 39 hours a week for all public service grades.

Speaking after the debate, Siptu president Jack O’Connor rejected Mr McGinty’s comments as a “shameful and despicable attempt to scapegoat working people” who are already suffering from severe cuts.

“Mr McGinty has missed another opportunity to do something useful by keeping his mouth shut as very sensitive and difficult negotiations, in which his organisation is not involved, proceed precariously,” he said.

“Mr McGinty represents the most feather-bedded employer class in Western Europe, buoyed up as they are, by a corporate tax regime that his contemporaries across the Continent would give their eye teeth for, and which is subsidised by the Irish taxpayer.”

Financial targets

During the debate, which took place in the offices of Beauchamps solicitors in Dublin last night, the secretary general of the Department of Public Expenditure and Reform, Robert Watt, said it would prove impossible to meet financial targets without further payroll savings. He said the State currently spent €750 million on overtime and premium payments annually.

Labour Party chairman Colm Keaveney said he supported the Government’s fiscal strategy but said there was a human cost. “The generation entering the workplace now is the first generation since the second World War that will earn less than their parents . .”

Prof Bill Roche, professor of industrial relations and human resources at UCD, said the Croke Park agreement had always been controversial and had come under renewed criticism and attack. The options appeared to have narrowed during discussions to secure a second agreement.

“While the carrots on offer are slender, the stick is a big one and it takes the shape of an across-the-board pay cut.”