The government has proposed how much extra pension contributions will be paid by civil servants, NHS workers and teachers as part of its reforms to public sector pensions.
The Cabinet Office, Department for Education and the NHS have published consultations on pension contribution increases for civil servants, teachers and NHS staff for the financial year 2012/13.
The proposals will deliver around £1 billion of the £1.2 billion savings in 2012/13. Of these, around £530 million will come from the NHS Pension Scheme, around £300 million from the Teachers’ Pension Scheme and around £180 million in the Civil Service Scheme.
However, the government is proposing that there should be no increase in member contributions for those earning under £15,000 and no more than a 1.5 percentage point increase in total (before tax relief) by 2014/15, for those earning up to £21,000.This means employees earnings £25,700 will pay an extra £10 a month for their pension, while an NHS consultant will pay an extra £152 a month.†
Chief secretary to the Treasury Danny Alexander said: “The government will take the latest step towards setting public service pensions on a sustainable path. Departments will start consultations on the extra contributions nurses, teachers and civil servants will make to their pensions next year.
“Under the agreement that unions reached with the government in 2009, contribution increases next year were expected. But because these are difficult times for everyone – public sector workers included, we are ensuring that those with the broadest shoulders will bear the greatest burden. The lowest paid will be protected, and the highest paid will face the biggest increases.
“This is the start of a process, phased over the next three years, that will help set a fairer balance between what employees and the taxpayer contribute towards public sector pensions.”
Brendan Barber, general secretary at Trades Union Congress (TUC), said: “[The] consultation documents reveal exactly what kind of increases could soon be hitting millions of public sector workers, when they are already in the middle of a pay freeze and facing a huge squeeze on their living standards.
“The proposed increases, along with other changes the government wants to make to public sector pensions, present the individual schemes talks with a hugely difficult agenda to address over the summer.
“Only if the government demonstrates real flexibility in the coming talks and shows that it is genuinely listening and prepared to change course, will it avoid more unions deciding to enter into dispute and planning industrial action later this year.”
The proposals follow a report by Lord Hutton, which recommended comprehensive reform, including a move to career average, rather than final salary pensions and linking retirement age to the state pension age.
Lord Hutton also said there was clear rationale for increasing member contributions to ensure a fairer distribution of costs between taxpayers and members.
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