Minister for Public Expenditure and Reform Paschal Donohoe has said that the value of having a public service pension has increased in recent years.

Mr Donohoe said this increase must be factored into future wage determination.

Speaking at the Public Affairs Ireland conference on the workings of the Public Service Pay Commission, Mr Donohoe said he wanted to ensure that any future engagement with unions regarding the setting of public sector pay would take account of the value of future pensions in determining rates of remuneration.

He said that in the regard, the work of the PSPC would be important.

Mr Donohoe added that it was crucial that all of their work would be evidence-based, and that it was important to give the Commission space to do their work.

The minister’s comments come as thousands of private sector workers have seen their pension benefits drastically eroded.

Mr Donohoe said that big lesson from the recession was that the unaffordable pay increase of today was the savage pay cut of tomorrow, and that he did not want to go down that path again.

He said the consequences had run through communities and society "like a wrecking ball", inflicting huge damage.

He also cautioned against a return to what he called the old system of pay relativities and leap-frogging, where one group seeks to out-do others, creating a chain reaction that causes difficulties for all.