Details have been announced of the government’s offer to workers on public service pensions. The offer includes a more generous ‘accrual rate’ increasing from the 1/65ths offered in October to 1/60ths. 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. The offer includes a more generous ‘accrual rate’ – the rate at which annual benefits are earned – increasing from the 1/65ths offered in October to 1/60ths. This is an eight per cent increase. The Government also announced its objective that anyone within ten years of their pension age on 1 April 2012 will be protected, meaning they will see no change in when they can retire nor any decrease in the pension they receive at their normal pension age. This will benefit over a million people. Others very close to being ten years from retirement age may also see some additional protection, the details of which will be subject to further discussions. 15 March 2012 Discussions have now concluded with health, education and civil service unions on details for new public service pension schemes to be introduced from 2015. The Treasury have published a press release with the following details: Heads of Agreement on the main elements of scheme design were reached on 20 December 2011 for the NHS Pension Scheme, the Principal Civil Service Pension Scheme and the Teachers’ Pension Scheme. Further work on the remaining details has taken place between departments and trades unions. Discussions have now concluded for these schemes and Proposed Final Agreements, based on the Heads of Agreement reached on 20 December, have been published today by departments. These Proposed Final Agreements remain in line with the approach set out in Lord Hutton’s report and will mean that public service pensions remain among the very best available. The agreements also continue to deliver the Government’s key objectives on linking Normal Pensions Age to State Pension Age and moving to schemes based on career average salary, while protecting those closest to retirement. While most workers will be asked to retire later and pay more towards their pension, at the same time, most low and middle earners working a full career will receive pension benefits at least as good, if not better, than they get now. Those less than ten years from their Normal Pension Age on 1 April 2012 will continue to be protected from these changes. Details agreed include, a process with trades unions for assessing the equalities impacts of these reforms; clarification on death in service and other ancillary benefits, such as the treatment of members who leave active service but rejoin within five years; and options for members to contribute more in order to top up their pension if they choose to retire early. The enhanced cost ceilings set on 2 November 2011 remain unchanged, with no additional money made available. The majority of unions have agreed to take these Proposed Final Agreements to their Executives as the outcome of negotiations. In parallel with this process, the Government has begun working on the implementation of these scheme designs and will introduce legislation as soon as parliamentary time allows, so that new schemes can be in place by 2015. DISCUSSIONS CONCLUDED ON PUBLIC SERVICE PENSIONS DETAILS
CIPP Policy News Journal
09/10/2012, Page 184 of 234
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