The argument no longer holds true that pension programs for civil servants need to be more generous in order to compensate civil servants for lower public wages. Generous public sector pensions no longer are compensation for lower wages. In fact, there’s evidence that the wage level in the public sector is typically higher than in the private sector in all but the top fifth of the income distribution.
If on top of that public pension programs are more generous than private pension programs, equity issues eventually will arise, in addition to concerns about economic sustainability in countries with the beginnings of population aging. Surprisingly, there have been very few studies undertaken on the reforms of sector-specific pension programs, such as pension programs for public sector workers, compared to the considerable literature on national pension programs.
This doesn’t mean that I advocate reductions in public sector pensions. But I do believe that it is incumbent upon governments to weigh the consequences of ignoring the issue.