IRELAND - Linking Irish public sector workers' pensions to the consumer prices index (CPI) will "lock in" their standard of living at the point of retirement in an effort to save €1bn, according to a TD opposing the country's proposed new single public service pension scheme.

The proposals for a single pension scheme for all public employees, first unveiled last year as part of the Public Service Pensions (Single Scheme and Other Provisions) Bill, will see indexation liked to the CPI rather than wage increases, as well as a shift from a final salary to career average arrangement.

Speaking in the Dáil earlier this week, TD Sean Fleming voiced his opposition to the new indexation measures, arguing it would freeze the wealth of retirees at the point of retirement, while active members would continue to see their wages rise above inflation.

Fleming, the opposition spokesman for public expenditure and reform, criticised the fact the main tranche of savings to the exchequer stemmed from the indexation change.

"It owes [the savings] to the fact that, when people retire, inflation will screw them," he added.

"We will make our savings when they are in their old age, not when they are still making contributions."

He was critical that the inflation cap would see retirees' wealth frozen at the point of retirement, saying it was the "biggest single change" being proposed by the Bill.

"Everybody has been focused on the career average earnings aspect and the number of extra years that must be worked," the Fianna Fáil TD said.

"We are indicating that, once a person is out the door, he or she should not expect an improved standard of living up to the day of death. That is what the legislation is about."

Minister for health Kathleen Lynch, however, rejected any accusation that the CPI link would in any way be detrimental, as the active contribution rate would be linked to the same inflationary measure.

"Therefore, it is not so much a negative measure, but will inflation-proof contributions and the eventual pension received as one exits from one's career," she said.