{"id":297029,"date":"2011-03-10T00:03:02","date_gmt":"2011-03-10T00:03:02","guid":{"rendered":"http:\/\/www.ghanamma.net\/2011\/03\/10\/public-pensions-overhaul-planned\/"},"modified":"2011-03-10T00:03:02","modified_gmt":"2011-03-10T00:03:02","slug":"public-pensions-overhaul-planned","status":"publish","type":"post","link":"https:\/\/www.ghanamma.com\/2011\/03\/10\/public-pensions-overhaul-planned\/","title":{"rendered":"Public pensions overhaul planned"},"content":{"rendered":"<p><div readability=\"105.812840044\">\n        \t\t  <span><br \/>\n    <span>9 March 2011<\/span><br \/>\n<span>Last updated at <\/span><span>19:03 ET<\/span><br \/>\n<\/span><\/p>\n<p>Big changes to public service pensions will be recommended by a government-commissioned report published later.<\/p>\n<p>The report by Lord Hutton is expected to say they should be linked to the career average salaries of public employees, not to their final salaries. <\/p>\n<p>He is also likely to recommend that staff work longer and retire later.<\/p>\n<p>The government has already adopted his initial recommendation that public service staff pay higher pension contributions, averaging an extra 3%.<\/p>\n<p>The expected recommendations have already drawn a hostile response from trade unions.<\/p>\n<p>Dave Prentis of the Unison union said: &#8220;This will be just one more attack on innocent public sector workers who are being expected to pay the price of the deficit, while the bankers who caused it continue to enjoy bumper pay and bonuses.&#8221;<\/p>\n<p>&#8220;On top of a pay freeze, and the threat of redundancy, they now face a pensions raid. This brings the threat of industrial action closer,&#8221; he said.  <\/p>\n<p>University lecturers, who are already planning to strike over separate but similar changes to their own pension scheme, said good pensions were essential, not an optional extra.<\/p>\n<p>&#8220;We need to be doing all we can to try and keep the best and brightest young scientists, academics and researchers in the country, not attacking their few benefits,&#8221; said Sally Hunt, general secretary of the University and College Union (UCU).<\/p>\n<p>  <span>Assumptions<\/span><\/p>\n<div>\n\t<a href=\"http:\/\/www.bbc.co.uk\/news\/business-12687489#story_continues_2\">Continue reading the main story<\/a>\t\t<\/p>\n<h2>Pension schemes explained<\/h2>\n<p>\t\t<!-- pullout-items--><\/p>\n<p>\t<!-- pullout-body--><\/p>\n<ul>\n<li> <strong>Final-salary scheme<\/strong>: Guaranteed pension based on earnings at end of your career and length of service <\/li>\n<li> <strong>Career average scheme:<\/strong> Guaranteed pension based on your average pay over your career<\/li>\n<li> <strong>Defined contribution scheme: <\/strong>Determined by contributions and investment returns. Usually worth less than final-salary pensions<\/li>\n<\/ul>\n<p><!-- pullout-links--><\/div>\n<p>Lord Hutton, a former Labour pensions minister, was asked by the coalition government to conduct a review of public service pensions soon after it was elected last year.<\/p>\n<p>The pension schemes he examined provide an income in retirement for staff in the civil service, NHS, local government, education, police, armed forces and fire service.<\/p>\n<p>The principal finding in his initial report, published last October, was that the continued rise in longevity meant that schemes were becoming too expensive, especially as they are mainly funded from taxation. <\/p>\n<p>However he dismissed a number of common assumptions.<\/p>\n<p>He argued that there was no evidence that public sector staff were paid less than staff in the private sector to offset better pensions.<\/p>\n<p>On the other hand, he rejected the idea that public service pensions were &#8220;gold plated&#8221;, pointing out that the average pension in payment was modest at around \u00a37,800 a year.<\/p>\n<p>And he slapped down suggestions from employers groups that public service pensions should be dragged down to the level of inferior private sector pensions, describing this as a &#8220;race to the bottom&#8221;.<\/p>\n<p>Lord Hutton also pointed out that the long-term cost of funding public service pension schemes had already been cut by 25%.<\/p>\n<p>He pointed to measures such as uprating pensions in line with the typically lower Consumer Prices Index (CPI) rather than the Retail Prices Index (RPI). <\/p>\n<p>He also said some big schemes had already decided to raise the normal pension age for new recruits to 65 rather than 60.<\/p>\n<\/p><\/div>\n<\/p>\n<p>Follow this link:<br \/>\n<a target=\"_blank\" href=\"http:\/\/www.bbc.co.uk\/go\/rss\/int\/news\/-\/news\/business-12687489\" title=\"Public pensions overhaul planned\" rel=\"noopener noreferrer\">Public pensions overhaul planned<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p> 9 March 2011 Last updated at 19:03 ET Big changes to public service pensions will be recommended by a government-commissioned report published later. The report by Lord Hutton is expected to say they should be linked to the career average salaries of public employees, not to their final salaries. He is also likely to recommend that staff work longer and retire later<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-297029","post","type-post","status-publish","format-standard"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.0 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Public pensions overhaul planned - Ghanamma.com<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ghanamma.com\/2011\/03\/10\/public-pensions-overhaul-planned\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Public pensions overhaul planned - Ghanamma.com\" \/>\n<meta name=\"twitter:description\" content=\"9 March 2011 Last updated at 19:03 ET Big changes to public service pensions will be recommended by a government-commissioned report published later. 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