The Government will propose freezing public sector pension contributions for employees earning less than £15,000 in an effort to stifle employee opt-outs.
People earning between £15,000 and £18,000 will have their contribution increase capped 1.5 per cent, with the remaining public sector workers likely to face a 3 per cent rise.
The Government has already confirmed its support for Lord John Hutton’s reform package, meaning most public sector workers will see their retirement ages brought into line with the state pension age.
Final salary pensions will also be replaced with career average defined-benefit schemes.
Writing in the Daily Telegraph today, Chief Secretary to the Treasury Danny Alexander says the Government’s offer is “by far the best that is likely to be on the table for years to come”.
On potential strike action, he says: “A strike now might be in the interests of the union’s boss, but it is not in the interest’s of its members.
“Don’t let them sacrifice your pension for their political platform.”
Trades Union Congress general secretary Brendan Barber attacked Alexander’s “clumsy intervention”.
He says: “At such a critical time in complex negotiations this is a deeply inflammatory public intervention with a clumsy mix of announcements apparently designed to pre-empt the talks, coupled with crude threats that even worse terms might be imposed if unions refuse to acquiesce to this assault on their pensions.
“Many of the detailed proposals set out by Danny Alexander today have not even been put to the TUC negotiators, and the Government has yet to give a response to specific proposals tabled by the trade union side.”