Retired public servant, Ian Hooley at home in Gordon.

Retired public servant Ian Hooley at home in Gordon. Photo: Rohan Thomson

Retired public servants have been encouraged by the victory of tens of thousands of military pensioners who will now have their benefits indexed in line with the age pension and not solely against inflation.

John Coleman, federal president of the Superannuated Commonwealth Officers' Association, said his organisation had been campaigning on fair indexation for its members for years.

''The Coalition has now acknowledged the CPI is an inadequate way to index the pension,'' Mr Coleman said.

He said the average person on a public service pension received $28,368 annually, which was about $1000 a year less than the combined couple rate of the age pension and nearly $1000 less than the Henderson poverty line for a pensioner couple.

''The cause for concern with the latest inflation figures is that the CPI doesn't measure actual prices,'' he said.

''That's why the government correctly abandoned the CPI as the sole means of adjusting the age pension in 1998 and instead linked pension increases to movements in wages.

''An example of how these downward CPI adjustments take effect is if a washing machine has increased in price by 6 per cent and there has been an improvement in the latest model machine, which accounts for half of the 6 per cent price increase, the Bureau of Statistics records that as only a 3 per cent increase in the price of the washing machine.''

Ian Hooley, 64, who topped his engineering course at RMIT before he entered the public service, said he received a $24,000 a year Commonwealth superannuation pension after spending 27 years working for the federal and territory governments.

This equated to a few thousand dollars less than the average public service pension.

Mr Hooley, who worked full-time as an engineer and tertiary teacher, said he would need to continue working past the age he expected to retire.

This is partly because he spent long periods of his career working in acting capacities, sometimes in management, but due to the fact that he was not promoted to those positions, his pension was calculated at a lower rate.

''For a lot of people, their pension is nowhere near $30,000 a year,'' he said.

''ComSuper has come a long way short of expectation.

''My father was an auditor [in the public service] and I would have been earning more than him but he receives considerably more than the fortnightly ComSuper pension amount that I receive.''

Mr Hooley said he and his wife, who has also needed to keep working, have bought premium life insurance so when one of them dies the other can pay off the mortgage.