Public service pensions

The existing public sector pension arrangements originate from the Coalition governments reforms to public sector pensions.

Following the 2010 General Election the Coalition government swiftly announced the formation of an independent commission to review public sector pensions, which was chaired by Lord Hutton of Furness. Both parties had stood on manifestos that included a commitment to review public sector pensions.

The Independent Public Service Pensions Commission concluded that public servants should continue to have access for the foreseeable future, to good quality, sustainable and fair defined benefit pension schemes. The report recommended the introduction of career average revaluated earnings (CARE) pension schemes with a normal pension age of state pension age for all public servants.

The Coalition government accepted the recommendations from the report and began discussions with trade unions, including Prospect. The report did not include a recommendation on the accrual rate which would determine the value of the reformed schemes.

The opening offer from government was unacceptable due to the value of the accrual rate proposed, and the lack of protections for existing public servants. The TUC organised a day of action in November 2011 with up to 2 million trade union members striking. This prompted an 8% improvement in the proposed value of the accrual rate and protections for those within 10 years of their normal pension age.

Scheme level discussions followed which resulted in the formation of the 2014 Local Government Pension Scheme, Alpha in the Civil Service and 2015 Firefighter, Teachers’, and NHS schemes.

Following a legal challenge on the lawfulness of the protections provided to existing public servants, all public servants will join the reformed schemes from 1st April 2022.

 

Age discrimination in public sector pensions

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