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Public sector pension reforms delayed

A decision on Government reforms which will increase public sector pension contributions has been delayed until June following pressure from the Trades Union Congress.

The Treasury says the delay will allow further negotiations with union representatives over the timing of the proposed change and the impact it could have on low earners.

A spokeswoman says: “The spending review announced the Government’s intention to phase in an increase in public sector pension contributions from April 2012 in order to achieve £2.8bn in savings. This has not changed.

“As part of the ongoing discussions between ministers and the TUC on the implementation of the measure, the Government has agreed to extend the date it will put forward proposals about how £2.8bn of savings will be delivered across schemes beyond the Budget, until June. This will enable further discussions on how to ensure the impact of these changes protect the lower paid.”

The spokeswoman refused to confirm whether the key recommendations of the Independent Public Service Pensions Commission, chaired by Lord John Hutton (pictured), will be implemented in the March Budget. The commission has been invited to produce a report ahead of the Budget outlining how to make public sector pensions “sustainable and affordable”.

Following publication of the commission’s interim report, Hutton confirmed final salary provision would be scrapped in the public sector.

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