POA Circulars

168 | 20.12.2010

Lord Hutton's review of Public Sector Pensions

The first stage of Lord Hutton's consultation on public service pensions is now complete.

There are certain emerging themes from the consultation which if accepted by Government will impact on all members of the PCSPS, although it is important to point out that he will only make recommendations, the final decision rests with Ministers.

The themes that will potentially impact most on our members are as follows:

Contributions

This would appear to be one of t he important themes to emerge from the consultation thus far as an increase in contributions has the potential to provide a quick fix in terms of providing funds to the treasury. The report speculates on an average increase of 3%. What this would mean for the PCSPS members is as yet unclear as there are different levels of contributions in all the public sector pension schemes, we believe it is unlikely that the same increase will be applied across the board.

Lifetime protection deal

You will recall that as part of the reforms that introduced NUVOS the public sector trade unions negotiated a lifetime protection deal for members already in the service.

Lord Hutton has stated publicly that he disagrees with that deal and he will be recommending that it is scrapped and every member should move to the same retirement age in a new scheme. This is a complicated issue as European Court rulings make it abundantly clear that neither Lord Hutton or Government can interfere with rights already accrued.

If his recommendations are accepted it looks likely that this could result in members actually having two retirement ages. A member would be able to retire at his/her present retirement age, but would only have access to the pension they have accrued at the date of transition with the remainder (which would be in a new scheme) being accessed at the new retirement age whatever that might be.

Pre Fresh Start.

If the recommendations are accepted this would mean that pre fresh start members would lose their reserved rights at the date of transition and would move into a new scheme, again they would still be able to retire at 55, but only have access to the pension accrued at the date of transition.

Retirement Age.

Lord Hutton has taken the view that the retirement age must increase sooner rather than later with some exception for some front line operational services.

Unfortunately, he does not mention prison staff in his list of exceptions, When he was challenged face to face on this issue he refused to answer, so once again it looks like we are to be the forgotten service.

In terms of retirement age he believes we should move immediately io 66 with accelerated legislation to move to 67 years of age.

Scheme Design.

There are a multitude of different schemes in the public sector with different contributions and different levels of benefits. Lord Hutton is not clear on whether or not there is likely to be one scheme that will "fit all". We believe that this is unlikely if he is considering making exceptions for some areas of the public sector, we also take the view that the PCSPS is ahead of most of the public sector schemes having carried out reforms in 2002 and 2007.

It is appropriate at this point to reiterate that Lord Hutton will only make recommendations. the decisions on any reforms rests with Ministers.

Lord Hutton has now moved into the second stage of his consultation by issuing interested parties with a paper which posed a variety of questions. We have responded to that consultation document and also provided further information in terms of operational prison staff in general and pre fresh start in particular.

Our response is attached to this circular and we would appreciate your assistance in bringing it to the attention of as wide an audience as possible.

Yours sincerely

 

 

STEVE GILLAN
General Secretary

POA_Circular_168-2010_Lord_Hutton_review_of_pensions.pdf

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