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Public sector warned over pensions

Public sector warned over pensions

Public sector workers have been warned that it would be a 'colossal mistake' to spurn the government's pensions deal and sacrifice the best offer they will be made 'for years to come'.

Against the threat of a wave of industrial action, Chief Secretary to the Treasury Danny Alexander urged rank-and-file union members to help 'shape' the current reforms now or face 'uncompromising' change later.

Writing in The Daily Telegraph, the Liberal Democrat Cabinet minister insisted that reform was unavoidable and that, by working with the government, 'better change can happen' for those affected.

Public sector workers are facing changes to their pensions which, for most, will mean paying more – on average 3.2% – and working longer.

But ministers insist that the changes are necessary given spending cuts, rising life expectancy and when most private sector workers do not enjoy such generous pensions.

The government wants to adopt former Labour Cabinet minister Lord Hutton's recommendation for final salary pensions to be replaced by those based on career average earnings.

As a 'defined benefit' scheme, the career average system will still be more generous than many private sector workers can hope to join.

Most private firms have shifted to defined contribution pension schemes in which staff shoulder the risk of fluctuating savings investments.

Copyright © Press Association 2011

Your comments (terms and conditions apply):

"As a nurse who has worked in the health service a total of 41 years I am appalled. Instead of sending our hard-earned money to an ever increasing 'foreign aid,' bailing out EU countries who retire in their 50s, it should be given to the tax payers who have provided it!" - Barbara Pott, Teesside

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