Pension reforms spark anger

The peak body for former Commonwealth bureaucrats says news of the increase to the pensions of some former defence personnel will cause anger in their community.

And a defence welfare group said the federal government's new policy, which will benefit only those members of two defence super schemes who are aged 65 years and over, left much ''unfinished business''.

The Defence Force Welfare Association says the changes announced by Minister for Defence Materiel Mike Kelly still leave large numbers of former soldiers, sailors and airmen with pension schemes falling well behind the cost of living.

More than 26,000 military personnel will receive a boost to their pensions under the long-awaited reforms.

From next July, members of two military super schemes that have been closed since the early 1970s will have their retirement incomes indexed in the same way as the Centrelink age pension. The Coalition has already committed to changes to indexation for military retirees aged 55 and over, but Dr Kelly said Labor had decided such a move would be too expensive.

Les Bienkiewicz, Canberra-based national vice-president of the Defence Force Welfare Association, gave Dr Kelly's announcement a cautious welcome but said reforms proposed by Liberal leader Tony Abbott were more attractive to former defence workers.

''It's unfinished business but at least it's a start,'' Mr Bienkiewicz said.

The campaigners said the Coalition's pledge to peg defence pensions as a portion of average male weekly earnings was more popular among former Diggers than Labor's use of two other measures: the consumer price index and the pensioner and beneficiary living cost index.

''The Coalition's scheme is slightly more generous in that respect and it brings in the over-55s as well,'' Mr Bienkiewicz said. ''So it's up to the electorate to decide what they think is the best policy.''

But the Superannuated Commonwealth Officers Association, which has campaigned beside the military pensioners for more than 15 years for changes to indexations, was angry after being left out of Tuesday's announcement.

Association federal president John Coleman accused Labor of an about-turn after the party previously opposed Mr Abbott's plan to reform military pensions without also making changes to public service retirement incomes.

''This announcement was amazingly divisive,'' Mr Coleman said.

He said neither of the plans on the table from the major parties would solve the ongoing problems with government pensions.

''It's not for all the military people, of course, nor is Tony Abbott's promise,'' Mr Coleman said.

''This will affect indexation for less than a quarter of all Commonwealth superannuants, both military and civilian.'' The retired public servant said he had a meeting scheduled with ACT MP Andrew Leigh where he would be making the displeasure of his organisation felt.

''I'll be letting Andrew Leigh know, in no uncertain terms that Labor's promise is totally unfair and totally unacceptable and it's going to anger a lot of our people,'' he said.

In response to Tuesday's announcement, Mr Abbott released a statement recommitting to his previous pledge to bring all members of the two super schemes into his new indexation arrangement.

''The Coalition will keep faith with Australia's veterans by providing for the fair indexation of Defence Forces Retirement Benefits and the Defence Force Retirement and Death Benefits military superannuation pensions,'' Mr Abbott said.