Consultations commence on proposed public service pensions increases

 

 

 PPMA WEBSITE EMPLOYMENT LAW UPDATE August 2011 (1)

 

Developments in the review and reform of public service pensions have continued to be reported on this site and a recent update confirmed the Government’s plans with regard to consultations on proposed increases to employees’ contributions. The Cabinet Office, Department of Health and Department for Education have now published details of and commenced consultation on the proposed increases to the schemes for civil servants, NHS staff and teachers.

 

The consultations are based on three key principles:

  • protecting the low paid;
  • any increases should be progressive, so that those who earn more pay more;
  • limiting the risk of increases in the rate of opt-outs from schemes.

 

With regard to the Teachers’ Pension Scheme, it is proposed to introduce a system of tiered contributions in 2012-13. The consultation document sets out the proposed new contribution rates, together with further information about how these would apply, the underlying rationale for the proposed new tiers and the potential administration implications for employers.  The Government is seeking views on a number of specific issues and the consultation closes on 20 October.

 

Consultation on Proposed Increases to Contributions for Members of the Teachers’ Pension Scheme, and how to respond, is available on the Department for Education website at www.education.gov.uk/consultations

 

Separately, it has been reported that discussions have commenced between the Local Government Group and the trade unions with regard to the achievement of savings within the Local Government Pension Scheme (LGPS) and its longer term sustainability. The Government has already recognised that the funded status of the LGPS places it in a different position to “pay-as-you-go” schemes. More information about these discussions is available on the Local Government Employers website at www.lge.gov.uk

 

In the meantime, concerns continue to be expressed with regard to the lack of pensions savings more generally, with a recent report from the Workplace Retirement Income Commission warning that urgent reform is needed to private sector pensions, where millions of workers are failing to save enough for their retirement.

 

Further developments on this issue will continue to be reported on this site.