Cameron: “far, far, better pensions than people in the private sector”

3 November 2011

Revised government proposals for the reform of public sector pensions would, according to David Cameron, continue to provide ‘far, far, better pensions than people in the private sector’.  The revised proposals provide:

  • protection for any accrued benefits;
  • an increase in the “cost ceiling” by 8% on the previous offer. This means that the accrual rate ­ the percentage of salary earned as a pension every year ­ will be based on one-sixtieth of an average salary rather than the initial sixty-fifth; and
  • no changes for those within ten years of retirement. This means the changes will not come into full effect until April 2022.

The TUC also stated that the Government has committed to any agreed reforms not being reopened within the next 25 years.

The government’s concessions do not alter the draft reforms which include:

  • a move from final salary to career average;
  • proposed employee contribution increases by 3.2 per cent on average;
  • increases in the retirement age consistent with state pension age; and
  • an indexation change from RPI to CPI.

As at the time of writing, the planned day of action on November 30 remains live.