By Lucy Phillips
7 March 2011
A union has called on the government to ‘leave public sector pensions alone’ following a poll revealing public support for current schemes.
Ahead of the expected publication of Lord Hutton’s final review of public service pensions later this week, a poll of 2,500 adults by Prospect found that only 17% thought further reform of public sector pensions was necessary.
The union, which has 34,000 public sector members, highlighted during the survey that under existing changes that are being made to public service pensions, such as dropping final salary schemes for new recruits and capping payouts, the net cost to the public purse is set to decrease from 1.5% of national income in 2009/10 to 1.1% by 2015.
Before being told this 46% of respondents thought the current public sector pensions bill was unsustainable.
The poll also reveals that, on average, people think public sector pensioners should receive £17,088 a year. This is considerably higher than the current average payout of £6,500 a year. Only 11% of respondents thought former public servants should get less than £10,000 each year in retirement.
Some 47% of those polled said public sector workers worked hard and deserved a good pension, against 21% who said they didn’t. Half of respondents also felt the government’s plan to increase public sector employee pension contributions to 3% at the same time as they were experiencing a pay freeze was unfair.
Prospect deputy general secretary Dai Hudd said: ‘People don’t realise how little public sector workers get to live on in retirement. But they still believe these workers deserve a great deal more.
‘These findings show the government is out of touch with public opinion.
‘The predicted fall in pension costs is thanks to reforms already negotiated with the unions in 2007. These reforms introduced career-average schemes for new entrants and risk-sharing mechanisms to cap the cost of the schemes to the taxpayer.
‘The clear message to government from the public is: leave public sector pensions alone.’
The findings follow a warning last month by the chair of the Local Government Association, Baroness Margaret Eaton, that increasing employee pension contributions could lead to a mass opt out by council staff, reducing overall income to the Local Government Pensions Scheme.
In its evidence to the Hutton review, Prospect said that opt-outs across the public sector posed a genuine danger to the future affordability of pensions schemes.
But pensions expert RosAltman last week told the Public Accounts Committee that Treasury assumptions of future public sector pension costs to the taxpayer were hugely underestimated.
