Civil service pensions spark row between CBI and union PCS

Public sector pensions are far from “gold-plated” and should be left alone by business groups, a union has warned.

The Public and Commercial Services union (PCS) is angry that the CBI has called for the pensions of public sector workers to be scrutinised by an independent commission.

Earlier today the employers’ group said the government must address the “ballooning cost” of public sector pensions, which are running up a £1trn tab. In a new report, Clearing the pensions fog, the CBI called for an independent commission to examine the financial rules, costs, and levels of taxpayer subsidy that underpin public sector pensions.

But Mark Serwotka, PCS general secretary, said changing the way public sector pensions are calculated would put many out of pocket. A quarter of civil servants earn less than £16,000 a year, meaning many members retire with pensions worth less than £4,000 a year, he added.

“These are not the gold-plated pensions some would have us believe exist in the public sector. Three years ago we reached a settlement with the government – after it attempted to erode the value of public sector pensions even further – to provide some stability and assurance to the millions of workers who will rely on their pensions in old age.

“This latest attempt to undermine that stability is completely unacceptable, especially at a time when public sector workers have had to face pay rises of 2% or less this year,” he said.

The CBI said findings from the independent commission, if it was set up, would be used to reform the pension scheme system, placing less debt on the taxpayer. CBI deputy director general John Cridland said: “Public sector workers should have a good retirement, but we need to talk openly about how we split the bill. The debt that is being racked up is truly eye-watering and is set to get much worse.”

“The private sector has had to face up to what its pension commitments will cost, and has made huge efforts to put its own house in order. All we ask is that government does the same for its five million employees,” he added.

CBI recommendations

  • Create an independent public sector pensions commission to analyse the costs and assumptions of state schemes.
  • Increase the retirement age to 65 for public sector workers where possible
  • Raise employee contributions to levels that more realistically reflect the true costs of their pension provision.

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