Public sector pension contribution increases may be modified

Tuesday, 19 July 2011 06:30

Increases in public sector pension contributions may be modified for some civil servants if staff agree to other cost saving measures as part of their schemes after negotiations between the government and the TUC.

The government is still planning to press ahead with the increased contributions for most schemes from April 2012, but future planned increases may be reversed. The government review will take into account the findings of the Hutton inquiry which recommended higher contributions and a move to career average pensions rather than final salary.

The new proposals mean that certain public sector workers who earn less than £15,000 a year will not pay any higher amounts towards their pensions. Civil servants who earn between £15,000 and £21,000 will pay an extra 0.6 per cent from April 2012.

Those who earn more than £21,000 will pay up to 2.4 per cent on a sliding scale dependent on their salary. This will apply to the pension schemes of police, teachers, fire fighters, NHS employees and civil servants.

The Chief Secretary to the Treasury, Danny Alexander said: "The government remains committed to securing the full Spending Review savings of £2.3bn in 2013-14 and £2.8bn in 2014-15, requiring each scheme to find savings equivalent to a 3.2 percentage point increase."

However, the government has agreed to look into the possibility of making savings in other areas such as later retirement or benefits cuts. This follows a co-ordinated one day strike last month with the possibility of more strikes to follow.

The TUC said: "Further talks will take place centrally, and individual unions will be actively considering also participating in scheme level talks in order to fully explore all the issues and to enable unions and their members to reach a judgment on whether agreement is possible or whether more unions will enter into dispute and plan industrial action."

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