Senators have approved pension rises for retired public officers, teachers, police officers and prison officers under the Public Service Superannuation Fund (PSSF).

The pensions are reviewed at two-year intervals and rises based on inflation and the date when people retired.

Following the conclusion of the 2006 review, the increases are in the range of two percent to 8.5 percent and are backdated to July 1 this year.

Attorney General Kim Wilson said Government had started to address the inherited problems associated with the PSSF.

Based on actuarial advice, PSSF contribution rates were increased. She said there has always been an annual operating cash deficit within the PSSF as pension contributions cover approximately only two-thirds of the pension benefits paid and amounts transferred out of the PSSF during each year.

But the Minister said because of increased contributions there was a positive cash flow of $4.2 million in October compared to a $11 million deficit in March 2006 but more needed to be done to address unfunded liability through special contributions and sound investments.

Sen. Wilson said the assets of $372 million were around nine times the annual projected pay out of $41 million.

While virtually all domestic and global equity benchmarks crashed at least 30 percent this year the PSSF Fund fell by only 14.2 percent for the first nine months of 2008. "Which is acceptable given the current market environment," said Sen. Wilson.

She said in 2001 the Government implemented an asset diversification strategy which substantially reduced the prior strategy's exposure to the publicly traded stock markets.

The PSSF's assets continue to perform admirably and rank in the top 11 percent of total funds assessed by a consortium of independent investment consulting firm over a five-year period, said Sen. Wilson.

The decision to reduce the public funds exposure to the equity markets from 72 percent in 2005, to the current level of 51 percent has saved the public pension funds significant amounts in investment losses, said the Minister.

Independent Senator Walwyn Hughes credited Finance Minister Paula Cox for trying to get to grips with the fund.

But he is concerned about unfunded liabilities, mostly from Government pensions schemes, which stood around $500 million.

"I am sure it doesn't help when it comes to organising loans."

And he raised concerns about when the next actuarial report would be published. Sen. Wilson said the last one covers the 2004-05 period.

Senators also voted to increase pensions for retired Government employees, former Ministers and Members of the Legislature.