By Richard Johnstone | 2 November 2011
Ministers have offered unions concessions on public sector pension reform in the hope of reaching agreement before the end of the year.
The offer, which
includes a more generous pension accrual rate and protection for workers close
to retirement, was announced by Chief Secretary to the Treasury Danny Alexander.Alexander and Cabinet Office minister Francis Maude met union officials today to discuss the proposal. It includes a higher accrual rate of 1/60th of salary for each year of contributions towards the proposed new career average salary benefit. This compares with the previous rates of 1/65th for health service, teaching and civil service schemes and 1/70th for the funded local government scheme.
Calling the new deal ‘the best offer that’s going to be on the table’, Alexander said it was an attempt to reach an agreement ‘that can last for 25 years or more’. He called on unions to agree a deal before the New Year.
The change would represent an 8% increase in the cost to the public purse, he added, and for low and middle income earners would provide ‘pensions with benefits at least as good as now’.
He also announced that people within ten years of retirement ‘should not have to face any change at all’ when the proposed new system comes into place in 2015.
Scheme-specific negotiations, which will now continue in each area, will be given flexibility outside the cost ceiling so that those close to retirement continue with the current benefits.
The Trades Union Congress’s Public Services Liaison Group, which includes Unison, Unite and the GMB, said the concessions were welcome and had come ‘as a direct result of the strength of feeling and determination shown by public sector workers’.
In a statement, they said: ‘These proposals, and their detailed implications for the pensions offer within each scheme, will now need to be considered in detail within the sector-specific negotiations, alongside all the other issues… on which the government’s position remains unchanged.’
The government’s move comes four weeks ahead of a day of planned strikes across the public sector to protest the pension changes. Alexander called for the November 30 day of action to be postponed.
NHS Employers director Dean Royles added: ‘Employers and unions know that strike action will affect patient care and in light of this statement, such action would be premature.’
But unions said that planning for the action would continue and would not be abandoned ‘unless and until further real progress is made’.
The result of the ballot held by the biggest public sector union, Unison, is expected tomorrow.
