UK - Unions have welcomed a government decision to back-down from a proposal which could have seen public sector workers under current defined benefit pension schemes forced to continue working until age 65.
In an agreement forged between the government and public sector unions, public sector workers in health, education and the civil service will continue to receive the defined benefits stipulated in their contracts. However, like the state pension and pensions in the private sector, the normal pension age for new entrants will now be 65.
TUC general secretary, Brendan Barber (pictured), said: “The government has accepted that today’s public sector staff should not have their pensions promise broken, and need suffer no detriment in their pensions arrangements. This has met the major union objective.”
Mark Serwotka, general secretary of the PCS, added: “Against a backdrop of the government seeking to impose pension changes this agreement is a significant achievement which illustrates what trade unions can achieve.”
The PCS intends to lobby the government to extend its pension commitment to other public sector workers, including local government.
The British Chambers of Commerce, however, was not so jubilant. The BCC called the decision “unacceptable” and questioned how private businesses in Britain were going to cope with the strain of £700bn worth of public sector pension liabilities.
A spokesman for the BCC said: “We feel this will place enormous strain on our businesses and our employees. We will continue to make our opinions known on the issue but it appears as if its a done deal and the government has backed down.” The agreement was reached at the third meeting of the Public Sector Forum chaired by Alan Johnson, secretary of state for trade and industry, to discuss pensions. The discussions started in March this year.
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