UK – The government has confirmed it is reviewing the Civil Service Pension Scheme – prompting the threat of strikes from the unions.

“We are reviewing the Civil Service Pension Scheme and we hope to announce proposals shortly,” the Cabinet Office said in a statement. “No decisions have yet been taken and the unions will be consulted about any proposed changes.”

It added: “Public sector pension schemes need to remain affordable and sustainable. To maintain the long-term affordability of pensions, the government announced in its green paper that pension age would rise from 60 to 65.”

IPE reported last week that the government was projecting that public pension spending will rise by 0.9 billion pounds (1.3 billion euros) – largely due to the Principal Civil Service Pensions Scheme.

The PCSPS is a traditional occupational final salary scheme which closed in 2002. It pays a pension based on 1/80th of final pensionable pay for each year of, plus a tax-free lump sum of three times pension.

The BBC reported that the proposed overhaul, due on Thursday, could mean pensions could be based on a career average salary.

Dave Prentis, general secretary of Unison, the UK’s largest union, said: “The proposed changes to public sector pension schemes will mean increased contributions and reduced benefits. The government is intent on moving the retirement age by diktat from 60 to 65.

“What really riles me is the breathtaking hypocrisy of MP’s who recently voted themselves the best pension scheme in Europe, but say they can’t afford it for anyone else.

“This is a position that Unison cannot accept and will oppose. It will lead to conflict between Unison and the government, if not this year then next.”

The row has overshadowed a report from the National Association of Pension Funds on its ‘Citizen’s Pension’ proposal.

“Britain’s state pension system is horrendously complicated,” said NAPF chief executive Christine Farnish. “Despite the availability of 27 different benefits, the system still fails to deliver a fair deal to millions of pensioners.

“Means testing is expensive to administer and only two thirds of those eligible claim. It also discourages people from saving. Contracting out adds further to the complexity of our system.”