The Government will consult on introducing career-average pensions for all public sector workers after Chancellor George Osborne accepted Lord John Hutton’s reform recommendations.
Osborne also confirmed MPs’ pensions will be reformed in line with the rest of the public sector, as Money Marketing revealed last week. The Conservatives had previously pledged to move new MPs to a defined-contribution scheme.
As part of the reform pac- kage, which Hutton said should be implemented in its entirety, most public sector workers would see their normal pen- sion age brought in line with the state pension age.
Hutton also recommended a fixed cost ceiling to be imposed to limit taxpayer exposure to public sector pension liabilities.
National Association of Pension Funds chief executive Joanne Segars says: “It is encouraging that the Government has formally accepted Hutton’s report and has pledged not to cherrypick from it but it should think carefully about how and when it increases employee contributions into pensions.”