Up to 400,000 public sector workers are on a 24 hour strike today in the long running dispute with the government over pension reforms.
Pinsent Masons’ national head of public sector pensions, John Hanratty, says it is not too late to revisit Lord Hutton's reforms. He comment:
“The rhetoric around “gold-plated pension” schemes on one side of the debate and low “average” pensions payable from the schemes from the other does raise the question of whether the Government’s approach to apply a “one-size-fits-all” solution has improved or worsened the situation.
In his report, Lord Hutton found against a staged approach to pensions where a level of pension would be guaranteed up to a certain level of earnings but pensions built up over that minimum level would be related more to member contributions. Lord Hutton’s view was the administration of such a scheme would be too complex. However, that approach would allow lower paid workers such as nurses, refuse collectors and essential workers to build up a guaranteed level of pension whereas those at management or senior administration levels who receive higher levels of pay would have the option of saving more for their retirement.
Many of the public servants who will take to the streets today will be doing so reluctantly; they went into their jobs to serve the public. Many will not be paid for today and, for those on low incomes in the current economic climate, the relative impact of losing a day’s pay will be significant. However, there will be people striking today who do have higher levels of pay than equivalent managers in the private sector and who do have the financial knowledge to save independently for their retirement.
Perhaps it is not too late to look at the situation further.”
Author: Pensions WorldPensions World is the leading monthly magazine for pensions professionals published by LexisNexis.