The government yesterday sweetened its public sector pensions reform plans by offering higher accrual rates and a commitment to no further changes for 25 years.
The chief secretary to the Treasury, Danny Alexander, told parliament the government was now willing to base future schemes on a pension “to the value of 1/60th of average salary, accruing for each year worked”. This, he said, was an 8% increase on the government’s previous offer.
Anyone who was 10 years or less away from retirement on 1 April 2012 would see no reduction in their retirement income.
Alexander pledged that, if these proposals were agreed, the government would commit to no further reform of public sector pensions for 25 years.
However, he added that the government still intended to change the inflation measure used for calculating annual pension increases from the retail price index to the consumer price index, which is usually lower. This proposal has already prompted legal action by unions.
Unison welcomed the improvement in the government’s offer but said it would examine the implications further before responding. The results of the union’s ballot on industrial action over the matter are due to be announced today.
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