UK – More than half a million civil servants may have to increase their pension contributions under new controversial proposals put forward by government, say reports.
Under these plans from Cabinet Office minister Hilary Armstrong - which were leaked to ‘The Sunday Times’ ahead of a meeting tomorrow to discuss the future of civil service pensions - employer contributions to the civil service pension scheme would be capped at 20% in the future. They currently average 19.4% of salary.
Meanwhile, civil servants would be asked to pick up the tab for “at least” half the cost of the increases in their pensions in future due largely to increasing longevity, said the paper.
The move is expected to go some of the way towards plugging the civil service pensions deficit, and also bringing civil servants more in line with private sector workers, the article added.
“The issue we must now confront is whether or not it is reasonable to perpetuate our long-standing policy of sheltering staff from these cost increases,” Armstrong reportedly said in a letter to cabinet ministers last week.
The government has since come under fire from some unions, and been accused of reneging on its agreement last October to slash the public sector pension bill by £13bn by 2050 while still allowing existing civil servants to retire at 60 on a full pension, said a ‘Financial Times’ report.
The Public and Commercial Services Union (PCS) has reacted with anger and dismay, and promised a “robust response” if the leaks proved accurate, it said in a statement.
“For a government that repeatedly talks about trust in politicians to even think about reneging on an agreed deal is unbelievable,” it said.
However, Cabinet Office has said government stands by the deal negotiated between Alan Johnson and the public service unions.
"The Government is not reneging on the public service forum agreement. What it is striving to do is reach agreement with civil service unions on pension arrangements for both existing staff and new entrants,” it said in a statement.
“There are some scheme specific issues to be addressed. The process has already been successful with the teaching unions and further negotiations are to take place with the health service and civil service unions.”
It continued: "The agreement the Government wants to reach for the civil service pension is a sustainable, defined benefit, index linked pension."
While a spokesperson declined to comment on the leaked document, she added that any proposals would be discussed with all interested parties, including unions and the Public Service Forum.
According to the reported proposals, Armstrong wrote: “I have no doubt that this measure will be deeply unpopular with the civil service trade unions – especially in relation to existing staff – and I seek ministerial confirmation that we will all be prepared to stand firm on the need for such an agreement even though there is a risk of industrial action.”
However, PCS general secretary Mark Serwotka said: “We will await tomorrow’s meeting to see what the government are truly proposing and in the meantime urge the government to stick by agreements they enter into.”