Hutton calls for changes to public sector pensions
Increased longevity means current schemes are "not tenable in the long run."
By James Preston Published 10 March 2011
Public sector pensions should be linked to average career salaries rather than final salaries, according to Lord Hutton's pension report.
His independent review of public service pensions argued that the changes, which would be implemented in 2015, would make pension schemes "sustainable and affordable in the future" as life expectancy rises.
The new career average schemes would mean lower pensions for public sector workers unless they work longer to make up the difference.
The report recommended that the normal pension age (NPA) should be raised from 60 to 65 to bring it in line with the state pension age. The NPA and state pension would then increase simultaneously in future.
Lord Hutton stressed that the changes would be fairer to "the majority of members that do not have the high salary growth rewarded in final-salary schemes."
He said that current schemes were "not tenable in the long run," but the move has been criticised by trade unions.
Dave Prentis, general secretary of the Unison union, told the BBC that the recommendation "brings the threat of industrial action closer."
Lord Hutton was commissioned to carry out the review by the coalition government after it was elected last year.
His initial report, published in October, found that longer life expectancy meant that pension schemes were becoming too expensive. He also recommended that public servants should make higher contributions in future.
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8 comments
Millions in the private sector, have seen their final salary pensions disappear, their pensions plans plundered, and are now having to work longer with far-less generous pension at the end of their working lives. What makes the public-sector a special-case?
Ironic that Hutton's report was published the same day as the latest Forbes' rich list appeared showing how the world's super-rich are raking it in while the rest of us plebs are exhorted to further tighten our belts.
Capitalism, don't ya just love it?
yes writeoff that is indeed the choice facing me and my co-workers
let them pick up the tab down the line when we're all skint -might as well swim towards the impoverishment it's going to happen anyway
iot's got a sensible case administerd by what were once sensible employers
the private sector has ripped off its employees
so do you want us to be ripped off to ?
mass opt out now
Exactly thinkov. Opt out so you can eat now. Hutton is the ultimate government stooge. Awful man.
What happens to the highly inflated pensions of mps etc?
Longer life expectancy affecting pension plans is a lie.
Kids are living longer; fewer die in infancy. The life expectancy of a 65-year-old has hardly changed at all in the past 30 years. Expected "retirement years" has flatlined.