Public sector workers will be waiting nervously for John Hutton’s pension review, due out tomorrow. It is likely to mandate extra pension contributions of around 2.5-3.5 percent of pay and new ways to make entitlements grow more slowly. Policy Exchange advocated a similar solution in a report published last year.
Predictably, the TUC is up in arms. It says that public sector pay is not significantly out of line with the private sector – despite all the evidence that it is. The main reason why those in the public sector get a better deal is their pensions.
These add up to the equivalent of 44 per cent of public employees’ wages and 71 per cent for uniformed services – but are just 9.3 percent for (less secure) private sector schemes. Despite much longer retirements (around 25 years on recent estimates compared to 15 years ago in 1990), public workers have not been asked to pay more.
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