Public sector pension proposals fairer on taxpayer and workers

The Scottish Parliament is debating Public Sector Pensions this afternoon. The proposed changes by the UK Government would see many lower and middle income earners in fact earn larger pensions.

Gavin Brown MSP, who is leading the debate for the Scottish Conservatives, said:

"This is a highly sensitive issue and that is why the UK Government asked the previous Labour Work and Pensions Secretary, Lord Hutton, to compile a full report into how we could make public sector pensions more sustainable and the recommendations proposed flow fully from his comments.

"The heart of the matter is that we're living longer. Most adults will spend 40% of their lives in retirement and it is clear that this has to be paid for. For decades funding this gap has fallen on the taxpayer and the UK Government is now adjusting the balance to be fairer on the taxpayer and workers.

"Most people, and particularly the lower paid, will continue to have access to pension schemes that are among the best available.

"I am very disappointed at the grounds the SNP gives for opposing these changes, especially as their proposals would have resulted in poorer and more uncertain pensions for all workers."

A link to the SNP's proposed changes to public pensions can be found on page 40 of this report:

http://www.hm-treasury.gov.uk/d/hutton_responses_t_w.pdf

Please find below facts on the changes to public sector pensions proposed by the UK Government:

Public sector pensions will remain among the very best available – a guaranteed level and inflation proofed.

Most will see no reduction in the pension income they receive at retirement and many low and middle income earners will in fact receive a larger pension income at retirement.

Low earners making under £15,000 a year (FTE) - that's 15 per cent of the workforce - will not have to make increased contribution. Another million workers earning up to £21,000 will have their total increase limited to 1.5 per cent over three years.

The pension people have built up so far will be protected: a guaranteed benefit in retirement free from market fluctuations or fees - something all but eliminated elsewhere.

No one within ten years of retirement will see any change in the age they retire or in the amount of pension they will receive on retirement.

Only one in three workers in the private sector have an employer contribution at all, while nearly nine in ten in the public sector do.

Only 2.1 million people in the private sector, around 10% of private sector workers, are active members of a defined benefit pension scheme, with guaranteed benefits in retirement.

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