Public sector pension
Public sector pensions are pensions received by civil servants or employees of government departments.
Public sector pensions have traditionally been seen as generous in that many of them provide an income equal or close to an employees’ final-salary amount. Historically this has been seen as a way of making up for salaries that were often lower than those received by employees in similar jobs in the private sector.
However, in March 2011 Lord Hutton completed his review of public sector pensions against a background of public sector cuts set out by the coalition government as it tries to reduce the public sector deficit.
Lord Hutton concluded that public sector pensions should be based on average earnings throughout a career rather than final salary amounts. This reform attempts to make public sector pensions more affordable and sustainable for the taxpayer.
The government can choose to follow these recommendations and if it does the reforms could be in place by 2015.
- Public sector workers to get a 1% pay rise from April
- Private sector job numbers accelerate as public sector declines
- Public sector workers earn £2ph more than private sector workers
- Rise in public sector borrowing in June is a blow to Osborne
- Miliband calls for public inquiry into UK banking sector
- Public sector borrowing figures ‘uncertain’ says OBR
- Public sector pay 8% higher than private sector as gap widens
- Alexander orders review into all public sector bonuses
- Public sector deficit widens in May as tax receipts slump
- Public sector net borrowing surplus due to Royal Mail windfall