Public sector pension

Public sector pensions are pensions received by civil servants or employees of government departments.

Public sector pensions have traditionally been seen as generous in that many of them provide an income equal or close to an employees’ final-salary amount. Historically this has been seen as a way of making up for salaries that were often lower than those received by employees in similar jobs in the private sector.

However, in March 2011 Lord Hutton completed his review of public sector pensions against a background of public sector cuts set out by the coalition government as it tries to reduce the public sector deficit.

Lord Hutton concluded that public sector pensions should be based on average earnings throughout a career rather than final salary amounts. This reform attempts to make public sector pensions more affordable and sustainable for the taxpayer.

The government can choose to follow these recommendations and if it does the reforms could be in place by 2015.

	Public sector pension outline agreement announced by Alexander The Chief Secretary to the Treasury, Danny Alexander has given details of an outline agreement that has been agreed with some of the public sector unions.
	400,000 public sector workers strike over pension reforms Around 400,000 public sector workers including police officers, lecturers, prison officers and health workers are striking today over pension reform plans.
	Extra pension contributions for public sector workers revealed Leaked documents show the government plans to add up to £3,000 per year to public sector pension contributions under reforms to the state provision.
	Public sector pension contribution increases may be modified Public sector pension contribution increases for some workers could be halted after the first year if the unions and the government can find the budgeted savings from other parts of their schemes.
	Danny Alexander speech on public sector pension reforms The Treasury Minister, Danny Alexander has angered trade unions by making a speech on public sector pension reforms whilst negotiations with the unions are still continuing.