You are here

SoR condemns imposing increased costs on public sector pensions

10 September, 2018
Empty pension

The government must not expect public sector employers to fund increased pension contributions following an announcement that payments must rise because of accounting changes forced on the scheme by HM Treasury, according to an Emergency Motion at the TUC Conference (9-12 September, Manchester) proposed by the Society of Radiographers.

In an update to parliament, Elizabeth Truss, chief secretary to the Treasury, said that the cost of public service pension schemes, including those covering NHS workers, firefighters, civil servants, and teachers, would have to rise and employers would be required to pay more.

“Our concern is that this change is a unilateral, technical decision made by government that will significantly increase pension costs for employers at a time when public services continue to suffer from the effects of years of austerity,” commented Paul Moloney, the Society’s industrial relations manager.

“Unless the government fully funds the increase in contributions, employers may be tempted to introduce cheaper pension provision, or further cut public services that have already been damaged and destroyed by repeated budget cuts,” he continued.

The Society's Society Emergency Motion to TUC Conference
Congress notes with concern the announcement made by Elizabeth Truss, Chief Secretary to HM Treasury on 6th September on the valuation directions given to public service pension schemes.

Congress notes that the Directions issued by Treasury effectively dictate the assumptions made by actuaries when valuing public service pension schemes. This includes the assumption about the discount rate, any changes to which can have a significant impact on the cost of pensions.

Congress further notes the reduction in discount rate required by the directions will increase the cost of many public service schemes including those covering NHS workers, Firefighters, Civil Servants, and Teachers.

Congress is concerned that this change is a unilateral, technical decision made by Government that will significantly increase pension costs for employers at a time when public services continue to suffer from the effects of years of austerity. 

Congress believes this will inevitably lead to more public service employers finding ways to entice workers, particularly young workers, to give up hard won pension rights.

Congress calls on the General Council to demand that the increased costs caused by this accounting manoeuvre are fully funded by central government and do not result in cuts to services or attacks on public service pension scheme.

Public Service Pension Schemes: valuations update

Content tools

Accessibility controls

Text size

AA A

Colour