NO ONE would argue that the need for belt-tightening is far from over.

Despite last week’s predictions of early green shots of recovery by States Economist Andy Sloan, most in the private sector will tell you that it is still way too soon to let our guard down.

Many companies are still coming to terms with the impact of a global recession on our island, albeit not as extreme as that suffered by our UK neighbours across the Channel.

There has, nevertheless, been pain for some islanders – whether through job losses, a fall in employee headcount, a drop in interest on savings or merely a lack of confidence in what the future holds for property and pensions.

Even on a lesser level some firms have been forced to rein back on staff travel or Christmas parties. It is fair to say that hardly anyone in Guernsey has remained immune and many have had to retrench.

Which is why islanders will be watching with interest the launch of a review of public sector pensions, that we highlight today.

Any recommendations that come from the new Public Sector Remuneration team, which negotiates pay for States workers, will be an acid test of  its resolve.

Will it take a look around at what is happening in the commercial world outside the cosier confines of local government and act accordingly, or will it opt to keep the status quo and so-called ‘gold-plated’ final salary scheme?

As many other islanders with private sector pensions watch the world markets nervously, as recently as March we heard that £7m. a year was being lost to top up the public sector pension pot because it had fallen so much in value.

Surely this is a situation that simply cannot continue. There are already increasing reports of private sector employees opting for more comfortable salary and pensions packages with the States – and who can blame them?

What is certain is that in the current climate PSRC’s findings will not go unnoticed by islanders – not least OAPs. Countless pensioners were recently alarmed to read in this newspaper that at least one minister thinks the pension has grown too generous.

Fortunately sense, and a public backlash, prevailed.

But if even pensioners aren’t deemed to be safe from public spending cuts, why should States employees be any different?