The House of Assembly's decision to extend the retirement age for public servants is welcome, not least because it is long overdue.

The Progressive Labour Party has been promising for some years now to extend the retirement age, and this is a welcome first step.

There are several reasons why it is necessary. Improvements in health care mean that today's 65-year-olds (let alone today's 55-year-olds, the current Police retirement age) are much healthier than retirees of a generation or more ago when retirement ages were originally fixed. People are also living longer, so pensions designed to last 15 to 20 years will now be paid out for much longer. At the same time, retirees' individual savings may now have to last decades longer than they would have done years ago.

Bermuda's ageing population means that far more Bermudians are leaving the workforce than are entering it, and this will only get worse as the baby boom generation, the oldest of whom are now in their early 60s, enter retirement. So Bermuda's job market, which already depends on foreigners for about a third of jobs, needs as many able bodied people as possible, and forcing people into retirement when they are both able and willing to work makes little sense.

If some people want to work, just as many need to due to the inadequacy of pensions and the Island's high cost of living which affects those on fixed incomes most. Forcing people to retire when they cannot afford to makes no sense, and often forces bright and able-bodied people into low skilled and low paying jobs where their minds and experience are wasted.

So in all, this is a good first step. The right to continue to work through to the age of 70 should be extended to the private sector, although it should be voluntary, as it now is in the public sector.

The legislation passed on Friday will enable retirees to collect their pensions at the same time that they continue to work. This is fine in the case of defined contribution plans, but it is to be hoped that Government has done its homework on defined benefit plans, which tend to be more precarious and have often been "pay as you (the taxpayers) go". Similarly, benefits for spouses and dependents of deceased pensioners have been improved and while this welcome, it is to be hoped it is not storing up future problems.

In defined benefit plans, it remains possible for Government employees to resign from the scheme before the eight-year vesting period is complete in order to get hold of their contributions, possibly for the down-payment on a house or to pay college fees and so on. Ms Cox told the House of Assembly on Friday that these employees are then immediately rehired, and to discourage this, there will be a three-month wait before refunds are made.

That is the right thing to do, because these employees are potentially storing up problems for themselves later on. But the real answer is to have public sector workers move to a defined contribution plan in common with most of the private sector.

It is one of the supreme ironies of political life that when the United Bermuda Party correctly made it mandatory for all companies and employees to have pension funds, they did not force the Government funds over to defined contribution plans.

As a result, the Public Service Superannuation Fund, while in better shape now than it was four to five years ago, is still vulnerable and dependent on the taxpayer for funding.

And, as Ms Cox admitted, public servants can resign and rejoin the Civil Service in order to get hold of their contributions when a person in the private sector is expressly banned from doing so.

Now that Government is allowing public sector employees to work longer, it should look seriously at revamping the structure of the pension funds as well.