The Government will consult on implementing career average pension benefits for all public sector workers after Chancellor George Osborne accepted Lord John Hutton’s reform recommendations.
Delivering the Budget today, Osborne said MPs’ pensions will be reformed in line with those in the rest of the public sector, as Money Marketing revealed last week.
In Hutton’s reform proposals, published earlier this month, the former Labour MP urged the Government to switch all public sector workers from final salary to career average pension provision.
As part of the independent commission’s reform package, most public sector workers would see their normal pension age brought in line with the state pension age.
Hutton also recommended a fixed “cost ceiling” be imposed to limit taxpayer exposure to public sector pension liabilities.
In an interview with Money Marketing last week, Hutton said policymakers would need to implement his full structural reform package to guarantee public service pensions would be sustainable in the long-term.
He said the changes would still leave public sector workers with “gold standard” pension benefits.