The report by the former works and pensions secretary, due out on Thursday (10 March), is likely to recommend public service employees should continue to receive ‘good quality’ defined benefits/pensions.
Unite assistant general secretary, Gail Cartmail, said: "Lord Hutton already recognised in his interim report that public sector pensions are not ‘gold plated’ – the average local government pension is just £4,000-a-year and a part-time female NHS employee can expect an average of £2,500-a-year.
"While we don’t expect to endorse the whole premise of the Hutton report, it could be reasonably well-balanced, for example, we understand he wants a more independent and less political oversight of public sector pensions, and also recognises there is a limit to how much an employee can be expected to contribute. We expect this report to be a curate’s egg.
"However, this report could be marginalised by what the coalition is cooking up to hit public sector pensions."
Unite outlined four changes being proposed by the coalition that would have an adverse affect on public sector pensions:
- The change from calculating pensions increases from the retail price index (RPI) to the consumer price index (CPI), which Lord Hutton has estimated would be the equivalent of a 15% reduction. Unite said this would have ‘a devastating effect.’
- The £2.8 billion annual ‘raid’ on public sector pensions announced in last autumn’s comprehensive spending review due to increased contributions. Unite said that ministers were using the public sector pensions funds as ‘a piggy bank’.
- The tearing up of the ‘fair deal’ commitment to public sector employees transferred to private sector companies, which has meant those employees continuing to pay into and receive the benefits of the public sector pension funds.
- The treasury’s current review of the discount rate – a technical measure designed to ensure that the government pays less in contributions.
This article was first published on hrmagazine.co.uk