10/03/2011
Lord Hutton Publishes Final Report On Pensions
Lord Hutton of Furness today sets out his proposals for comprehensive, long-term structural reform of public service pension schemes.
The final report of the Independent Public Services Pension Commission follows a comprehensive nine-month review. It sets out a number of detailed recommendations to the Government on how public service pensions can be made sustainable and affordable in the future, while providing an adequate level of retirement income.
The main recommendation of the report is that existing final salary public service pension schemes should be replaced by new schemes, where an employee's pension entitlement is still linked to their salary (a "defined benefit scheme") but is related to their career average earnings, with appropriate adjustments in earlier years so that benefits maintain their value.
The report suggests that it should be possible to introduce these new schemes before the end of this Parliament, in 2015, while allowing a longer transition, where needed, for groups such as the armed forces and police.
Some key recommendations in the report include: Linking Normal Pension Age (NPA) in most public service pension schemes to the State Pension Age; Introducing a Normal Pension Age of 60 for those members of the uniformed services - armed forces, police and firefighters - who currently have a NPA of less than 60; and setting a clear cost ceiling for public service pension schemes, the proportion of pensionable pay that taxpayers will contribute to employees' pensions, with automatic stabilisers to keep future costs under more effective control.
Publishing the report, Lord Hutton said: "These proposals aim to strike a balanced deal between public service workers and the taxpayer. They will ensure that public service workers continue to have access to good pensions, while taxpayers benefit from greater control over their costs.
"Pensions based on career average earnings will be fairer to the majority of members that do not have the high salary growth rewarded in final salary schemes.
"The current model of public service pension provision is clearly not tenable in the long-term. There is a clear need for reform. Getting the decisions right on the most appropriate structures and designs will be crucial to making any changes work in the future. This will only be achievable if there is effective dialogue between public service employers, employees and unions."
(BMcN/GK)
The final report of the Independent Public Services Pension Commission follows a comprehensive nine-month review. It sets out a number of detailed recommendations to the Government on how public service pensions can be made sustainable and affordable in the future, while providing an adequate level of retirement income.
The main recommendation of the report is that existing final salary public service pension schemes should be replaced by new schemes, where an employee's pension entitlement is still linked to their salary (a "defined benefit scheme") but is related to their career average earnings, with appropriate adjustments in earlier years so that benefits maintain their value.
The report suggests that it should be possible to introduce these new schemes before the end of this Parliament, in 2015, while allowing a longer transition, where needed, for groups such as the armed forces and police.
Some key recommendations in the report include: Linking Normal Pension Age (NPA) in most public service pension schemes to the State Pension Age; Introducing a Normal Pension Age of 60 for those members of the uniformed services - armed forces, police and firefighters - who currently have a NPA of less than 60; and setting a clear cost ceiling for public service pension schemes, the proportion of pensionable pay that taxpayers will contribute to employees' pensions, with automatic stabilisers to keep future costs under more effective control.
Publishing the report, Lord Hutton said: "These proposals aim to strike a balanced deal between public service workers and the taxpayer. They will ensure that public service workers continue to have access to good pensions, while taxpayers benefit from greater control over their costs.
"Pensions based on career average earnings will be fairer to the majority of members that do not have the high salary growth rewarded in final salary schemes.
"The current model of public service pension provision is clearly not tenable in the long-term. There is a clear need for reform. Getting the decisions right on the most appropriate structures and designs will be crucial to making any changes work in the future. This will only be achievable if there is effective dialogue between public service employers, employees and unions."
(BMcN/GK)
Related UK National News Stories
Click here for the latest headlines.
14 September 2007
Workers Warned On 'Forgotten Pensions'
Over half of UK adults have no idea how much money they've built up in pension schemes, while one in six people have no details of where their money is saved, government research has revealed. Findings published by government website Directgov show that a substantial number of people are failing to keep track of pensions savings.
Workers Warned On 'Forgotten Pensions'
Over half of UK adults have no idea how much money they've built up in pension schemes, while one in six people have no details of where their money is saved, government research has revealed. Findings published by government website Directgov show that a substantial number of people are failing to keep track of pensions savings.
02 November 2011
Public Service Pension Plans Revealed
The Government today set out details of its offer to workers on public service pensions. This new offer will mean that while most workers will still have to work longer and pay more, the pension that most low and middle earners working a full career will receive pension benefits at least as good, if not better, than they get now.
Public Service Pension Plans Revealed
The Government today set out details of its offer to workers on public service pensions. This new offer will mean that while most workers will still have to work longer and pay more, the pension that most low and middle earners working a full career will receive pension benefits at least as good, if not better, than they get now.
07 September 2015
BBC Unveils Proposals For Its Future
The BBC has outlined its plans to become "more open and more distinctive" in the future. The proposals are said to herald "a fundamental change of approach for the Corporation", and will reveal how the broadcasters' services will adapt and change in order to meet audience needs for the next decade.
BBC Unveils Proposals For Its Future
The BBC has outlined its plans to become "more open and more distinctive" in the future. The proposals are said to herald "a fundamental change of approach for the Corporation", and will reveal how the broadcasters' services will adapt and change in order to meet audience needs for the next decade.
20 February 2006
CBI warns employer compulsion is wrong answer
The CBI today has unveiled proposals to help tackle the UK's emerging pensions crisis without compelling business to contribute to staff pension schemes. The employers' organisation argued, in its submission to the Government, that enrolment without compulsion is the best way of increasing pensions saving without undermining existing provision.
CBI warns employer compulsion is wrong answer
The CBI today has unveiled proposals to help tackle the UK's emerging pensions crisis without compelling business to contribute to staff pension schemes. The employers' organisation argued, in its submission to the Government, that enrolment without compulsion is the best way of increasing pensions saving without undermining existing provision.
15 April 2005
Conservatives pledge to 'simplify' pension rules
The Conservatives have unveiled proposals to “reduce and simplify complex pensions rules” and promised to encourage more firms to provide pension schemes for workers.
Conservatives pledge to 'simplify' pension rules
The Conservatives have unveiled proposals to “reduce and simplify complex pensions rules” and promised to encourage more firms to provide pension schemes for workers.
-
Northern Ireland WeatherToday:After a dry start this morning rain will spread from the northwest across all parts. This afternoon will be dull with some patchy rain and drizzle. Becoming much milder through the afternoon. Maximum temperature 11 °C.Tonight:A cloudy evening and night with a little light rain or drizzle, perhaps some clear periods developing along the east coast. A very mild night everywhere. Minimum temperature 10 °C.