Civil service pension reform plans unveiled
The Government’s plans to reform the civil service pensions’ scheme are expected to result in “difficult and lengthy” negotiations.
Under the proposals, which if approved would apply to new entrants from April 6th 2006, and to existing staff as of April 1st 2013, the pension age for civil servants would be increased to 65.
The current scheme, in which people’s pensions are based on their final year’s salary, will be replaced with a “pay as you go” scheme, in which a proportion of salary is put towards the pension each year.
Ministers argue that changes are necessary to modernise the service’s pension arrangements, ensuring the financial sustainability of the civil service and other public service schemes.
The FDA union, which represents senior civil servants, fears the Government’s new plans will result in a “huge fall” in future pensions.
It also claims that the new pensions may prove inadequate, arguing that civil servants will have to work longer and pay more in contributions to get the same standard of pensions enjoyed by those about to retire now.
Nonetheless, it is thought that the new scheme would be beneficial for lower-paid staff.
Launching the consultation, Cabinet Office Minister Ruth Kelly said: “Fairness is the key theme running through the proposals. Fairness between civil servants and fairness in the relationship between those working in the public services and those, who, ultimately, fund them.”
She stressed that the proposals would modernise the current system “while reaffirming our commitment to the principle of a good quality defined benefit pension scheme with a substantial proportion of the cost being met by the employer.”
But unions remain unconvinced.
Peter Allenson, the T&G’s national secretary for public services, said that many people chose the civil service path, and accepted tough pay and terms and conditions because of the pension scheme.
He said: “Our members play vital roles in the modern day civil service often for lower pay than similar posts in the private sector,” he said. “Their pensions are important factors in their career choice. It seems scant reward for their loyalty and commitment to be making changes which, by the Government’s own admission, won’t save any money.”
March 4th has been set as the deadline for responses to the consultation document, which can be found on the Cabinet Office’s website at www.civilservice-pensions.gov.uk/consultation
