Public sector pensions Bill published
By Richard Johnstone | 13 September 2012
The government has today published legislation to bring in its controversial reforms to public sector pensions, which ministers claim will save £65bn over the next 50 years.
The Public Service Pensions Bill 2013 will implement changes announced by Chief Secretary to the Treasury Danny Alexander last December. These include linking the retirement age for public sector workers to the state pension age and changing the basis of defined benefit schemes from final salary to career average earnings.
Other changes have already been introduced by the Treasury. The inflation index used to uprate pensions has changed from the Retail Prices Index to the lower Consumer Prices Index, and contributions for teachers, NHS workers and civil servants will increase by 3.2 percentage points. The total package of reforms, which are now expected to save more than £430bn, followed the report of the Independent Public Service Pensions Commission in March 2011.
Alexander said today that the legislation was ‘the final stage in delivering sustainable public service pensions’.
The new deal would be a ‘settlement for a generation’, he added. ‘It will cut the cost to taxpayers by nearly half, while ensuring that public sector workers, rightly, continue to receive pensions amongst the very best available.
‘This is a good deal for taxpayers and a good deal for public service workers.’
Changes to the Local Government Pension Scheme have already been agreed by trade unions and employers. They will not increase contributions for council workers because the LGPS is funded, unlike many other public sector schemes, and has assets worth £150bn.
Teaching unions and some health service staff have voted to reject the reforms, but they can be implemented without union approval. Unions warned today that they will ‘fight’ the Bill.
Mark Serwotka, general secretary of the Public and Commercial Services union, said: ‘Co-ordinated industrial action is still necessary on pensions as well as pay.’ He called for this to take place soon after the Trades Union Congress austerity protest being held on October 20.
Unite said that the changes were being ‘steamrollered through despite widespread opposition’.
Assistant general secretary Gail Cartmail said: ‘Ministers have turned unfairness and not listening to the reasoned arguments of the public sector unions into an art form.
‘Ministers have dressed up their statements to give the impression that their plans for public sector pensions have been universally agreed by the respective workforces. This is simply not true.’