Pensions do not need immediate change, says the TUC

Pensions do not need immediate change, says the TUC

03 August 2010 / by Lois Avery

Public sector pensions have been deemed affordable and sustainable by the TUC as part of Lord Huttons pension review.

After June’s Emergency Budget the Government promised to carry out a thorough review into the affordability of the UK’s public sector pension system, headed up by Lord Hutton.

The move comes following criticism that public sector pensions were costing private sector workers and were unsustainable with an aging population.

But the TUC has gone against this view saying that there is no need to immediately change to the way the system works.

The Government proposed to raise the pension age, change the index linking from RPI to CPI and increase contributions from employees.

General Secretary Brendan Barber said that public sector pensions were ‘perfectly affordable’ and were able to adjust to issues such as increased longevity.

He argued that introducing higher member contributions at a time when most public sector pay has been frozen would result in an unfair reduction in take-home pay due to inflation.

The TUC agreed that private sector workers had an unfair deal compared to public sector employees but said they should not be punished for this. 

“There has been a sustained and highly political attack on public sector pensions from right wing groups who know they cannot win popular support for their real agenda of slashing public services such as health and education,” he said.

“Of course it is unfair that two out of three private sector workers now get no employer support for building up a pension, despite continuing diamond-encrusted pensions in Britain's top boardrooms, but the solution is to make private sector pensions better. Cutting the modest pensions of school meals assistants will do nothing to improve the pensions of private sector catering staff.”

However, the TUC’s comments welcomed Lord Hutton's intention to set out a proper basis for assessing the costs of public service pensions as an antidote to the 'big scary numbers' used by the political opponents of public services to stir up hostility to public service pensions.

The pensions review is due for completion this Autumn.

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