The report by the Public Pay Commission sets out some "relevant truths" about what has to be faced by Government, Taoiseach Enda Kenny has said.
Mr Kenny was questioned in the Dáil by Sinn Féin's David Cullinane and Mattie McGrath of the Rural Independent Group about the recruitment of nurses in the context of the report published today.
Mr Kenny said Minister for Public Expenditure Paschal Donohoe would initiate discussions with public service staff representatives to negotiate the extension to the Lansdowne Road Agreement in the coming weeks.
He said the Public Pay Commission is not a recommending body for pay increases but it sets out some "really relevant truths about the situation that has to be faced into by Government."
The commission has found that any future public pay agreement will have to have full regard to the state of the national finances, but that there is a basis for negotiations between the Government and public service unions to secure an extension to the LRA.
The PSPC report says that the content, phasing and implementation of any future agreement must have full regard to the current and future prospects and challenges for the economy.
It says a critical factor in any future pay agreement and or unwinding of FEMPI will be the State's ability to pay.
The PSPC acknowledges that control of the public service pay bill, currently standing at €16.4bn a year, is a central determinant of budgetary policy.
It says it will be a matter for the parties to negotiate a timeframe to provide for an orderly unwinding of FEMPI, which underpinned the cuts in pay and conditions imposed during the economic crisis.
It says that in doing so, they should have regard to maintaining sustainable national finances and competitiveness, other Government spending priorities, the Public Service Reform agenda, and equality considerations.
On the key issue of pensions, it finds that the pension benefits of public servants on the pre-2013 state scheme are worth between 12 and 18% of salary.
It states that public servants who enjoy such legacy pension schemes should pay an increased employee contribution.
It says the rate of increased contribution would be a matter for negotiation, though the commission argues it would be reasonable to apply any agreed adjustments in contributions in conjunction with the discontinuance of the Pension Related Deduction (pension levy) currently imposed under the FEMPI Acts on public servants.
The commission also notes that certain grades who enjoy fast accrual (ie. they can retire on full pension sooner than 40 years) incur greater costs.
The commission says that pay increases must continue to be contingent on the delivery of reforms and productivity.
Earlier SIPTU Health Division Organiser Paul Bell said his members expect significant progress to be made on the issue of public pay.
Speaking on RTÉ's Today with Sean O'Rourke, Mr Bell said he wants to reach a sustainable agreement on pay, pension and working conditions, that will also protect the public service for the public.
He accused Mr Donohoe of trying to condition the public into believing certain things about the public service and trying to condition his members into accepting a deal that may be "far less than their ambitions".
He said he was convinced that a number of issues will emerge from the commission which members will welcome, adding that increases in rents and mortgage repayments were all having an impact on members.
Mr Bell also said negotiations to repeal FEMPI legislation needed to get under way.
Mr Cullinane said his party had several red lines for any new pay agreement, particularly that there should be equal work for equal pay and that those below €65,000 should be prioritised.
Labour leader Brendan Howlin has said it would be impossible and wrong to change public sector pensions at the end of people's careers. He said workers had paid in for 30-35 years with a clear expectation and that could not be arbitrarily changed.
On whether public servants should contribute more for their pensions, he said that was already happening and there was a specific extra pension contribution already.
He said he was sure this could also form part of the next round of negotiations.
FEMPI, he said, needed to be unwound in an orderly way and he said money has to be found to restore to people what was taken from them.
The Irish Nurses and Midwives Organisation welcomed what it says is the acknowledgement from the commission of recruitment and retention issues in nursing and midwifery.
It said the issue needs to be the subject of comprehensive examination whenever the parties begin talks on a new pay deal.
INMO General Secretary Liam Doran said the organisation would join with colleague public service unions, in seeking early restoration of incomes, cut in recent years and protecting the value of retirement income.
Meanwhile, the Irish Medical Organisation said the commission had identified problems with the retention and recruitment of doctors.
IMO president Dr Ann Hogan said that at any given time, there are almost 400 consultant vacancies in the health service and over 80% of medical graduates intend to emigrate.
