Increase in pensions payments revealed

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Some public sector workers are due to be told how much extra they will be expected in pay in pension contributions from April.

The additional contributions for millions of doctors, nurses, teachers and civil servants come as the government seeks to reduce £1.2bn off of next year's pension bill.

The Treasury announced that the reforms would deliver over £1bn of the £1.2bn planned for 2012/13.

Protections in place for the lowest paid means that those on salaries of less than £15,000 will see no increase and those earning between £15,000 and £21,000 will have their increase capped to 0.6 per cent in 2012/13.

The proposals will affect a total of 2.5 million workers, including the civil service in England, Scotland and Wales, the NHS in England and Wales and teachers in England and Wales.

The Treasury said the plans will deliver savings of £530m in the NHS pension scheme, around £300m from the teachers' scheme and £180m in the civil service scheme.

And around 750,000 workers should pay no extra contributions and a further one million should pay no more than an extra 1.5 per cent.

Trade unions have warned that the government will face an autumn of industrial action if it goes ahead with plans to reform public sector pensions based on the review carried out by former Labour cabinet minister Lord Hutton.

Speaking to Radio 4's Today programme, chief secretary to the Treasury Danny Alexander said it is important to rebalance pension schemes between member and taxpayer contributions.

He said the government has been "completely straight" on public pension change and that details of April’s rising contribution rates would be subject to 12 weeks of consultation.

Alexander said the justification for increased contributions had been set out in the interim report on public sector pensions reform from Lord Hutton.

"These are difficult times for everyone - public sector workers included, we are ensuring that those with the broadest shoulders will bear the greatest burden," he said.

"The lowest paid will be protected, and the highest paid will face the biggest increases."

Unions have seized on the comments, accusing the government of being divided and inept" and of imposing public sector pension increases before negotiations had finished.

Gail Cartmail, assistant general secretary of Unite said: "This arbitrary announcement - while negotiations are continuing on the individual schemes - demonstrates that the government is not interested in genuine negotiations, but just in pushing through these changes.

"Despite the rabid tabloid headlines that these pensions are 'gold plated', the average local government pension is just £4,000 a year and over half of female NHS employees can expect an average of £3,500 a year - hardly a fortune after a life time of work.

"This has been recognised by the right wing Cabinet ministers in charge of health and education respectively, Andrew Lansley and Michael Gove, who have raised concerns about Danny Alexander's hardline attack on public sector pensions.

"The unions are united on this issue, but the government is divided. This approach is like a landlord announcing rent increases and saying they are still going to apply even after they have moved you into a much smaller property.

"The increases in 2012/3 are the first of three annual increases which, in total, go far beyond offsetting any increase in the cost of the schemes."

Dave Prentis, general secetary of Unison accused ministers of "naive tactics" and a lack of negotiating skills.

He called on ministers to abandon "playground games", and said: "We entered into the scheme specific talks on public sector pensions in good faith and we genuinely believe we are making progress, albeit slowly.

"But these talks are being put in jeopardy by the crude and naïve tactics of government ministers who don't seem to understand the word negotiate.

"The government must take its responsibilities seriously, and stop treating these talks like some kind of playground game."
FDA, the union representing civil servants, said the plans for contributions had been "completely unjustified".

Jonathan Baume, general secretary said: "The FDA has made clear to the government that we will continue - as will the majority of unions - to explore every avenue towards reaching a satisfactory agreement, both on contribution rates and on the issues raised by Lord Hutton in his report on future pension scheme arrangements.

"These negotiations will be complex and difficult."

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