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Public Service Pensions Bill 2012-13

Lords

(This Bill is from a previous session)

Summary

  • Type of Bill:

    Government Bill

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  • Ping Pong: House of Lords Ping Pong: House of Lords

    24 Apr 2013

    The House of Lords considered Commons amendment 78C to the Bill. The amendment was agreed to.

Summary

Following a coalition agreement commitment, Lord Hutton's Independent Public Service Pensions Commission published its final report on 10 March 2011. George Osborne accepted the review's recommendations at Budget 2011, and the Bill was announced in the Queen's speech of 9 May 2012. The Bill was published on 13 September 2012.

It aims to reform public service pension agreements to address the ageing of the population and to achieve a fairer settlement between public sector employees and the taxpayer.

The main impact of the reforms, as recommended by Lord Hutton, will be to require public service employees to contribute more to their pensions, retire later and receive payments based on their average salary, rather than their final salary.

Following months of fractious negotiations and two days of strike action, the government announced its proposed final agreements for the civil service, NHS and teachers' pension schemes on 9 March 2011.

The government's final proposal allows for:

  • pension benefits to be based on career average salary, rather than final salary
  • the normal pension age for the schemes to be linked to state pension age or 65, whichever is higher
  • transitional protection that would mean those within ten years of retirement would not be affected by the reforms, with tapered protection for those within 13.5 years of retirement
  • pensions in payment to increase in line with the consumer price index (CPI)

Some unions did not welcome this final offer in the manner in which the government may have hoped, though. UNITE reserved its position on a number of specific measures, and PCS, the UK's largest civil service union, rejected the heads of agreement outright, taking strike action in May and June 2012.