Premier Kathy Dunderdale and Finance Minister Jerome Kennedy assured public sector retirees on Thursday that their pensions would not be affected by a review of unfunded pensions, but gave very little assurance to current employees.

Unfunded pension liabilities sit at $5 billion, and account for 64 per cent of the province's net debt.

A report by Moody's released on Thursday warned the provincial government that if pension debt continues to pile up, the province risks harming its credit rating. 

Dunderdale said the government will now start the process of changing pensions by collaborating with the unions.

Only one decision has been made in relation to the province's pension plans thus far.

"When you start talking about pensions, it can often be of a great concern, a great deal of stress to people who are already retired, have structured their life around their retirement benefits, many who don't have the ability to economically affect their position now because of their age," she said.

"We need to say to all of those people, who provided a valued service to the province, you can relax around this piece because there won't be a negative impact on you as a result of any decisions we might take." 

The premiers' announcement brings comfort to those 25,000 retired public sector workers. However, changes have yet to be made to current employees pension plans.

"If something is going to happen, you'll have lots of lead time to make a decision as to whether you stay or whether you go because it will only impact the people employed by the public service when the changes take place," Dunderdale said.

"If we're going to change that plan in any kind of a way, you will have lots of time to make decisions about your retirement or staying on before those changes are implemented."

Thursday's announcement was the start of a very long, challenging and necessary process. The premier said no time lines are in place yet.