Pension expert Ros Altmann has slammed the Government’s plans to cap public sector pensions, as the small print of the pre-Budget report allows scope to change or remove the cap.
In the pre-Budget report, Chancellor Alistair Darling announced a cap on public sector workers and also suggested they would be required to make a greater contribution to their pensions.
Darling said: “Public pensions need to be broadly in line with those offered in the private sector. So by 2012 contributions by the state to public service pensions for teachers, local Government, NHS and civil service will be capped saving around £1bn a year.
“Public sector workers will make a greater contribution to the increasing value of pensions, with those earning over £100,000 paying more.”
But Altmann says: “The cap that has been announced is not a cap. It is another con because the cap on employer contributions to public sector pensions only applies if the economic assumptions, or the discount rate used for the future cost of pensions, do not change and the economic assumptions are not correct anyway.
“If you look at the small print, the cap is not a cap and the taxpayer is still on the hook. You cannot trust the Government here.”