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The Actuary The magazine of the Institute & Faculty of Actuaries

Treasury makes enhanced offer on public sector pensions reform

Chief secretary to the Treasury Danny Alexander told the House of Commons he was offering unions a "more than sufficient" offer of a 1/60th accrual rate - up from the 1/65th rate originally proposed.

The offer also exempted anyone within ten years of retirement in 2012 from changes to their date of retirement or alterations in how much pension they are due to recieve.

Alexander said: "Scheme negotiations will be given the flexibility, outside the cost ceiling, to deliver protection so that no-one within 10 years of retirement will see any change in when they can retire nor any decrease in the amount of pension they receive."

He added: "It is an offer that increases the cost ceiling and provides for generous transitional arrangements for those closest to retirement.

"This generous offer should be more than sufficient to allow agreement to be reached with the unions. But it is an offer that is conditional upon reaching agreement."

Government ministers previously said they would make a "significant offer" to trade unions on public sector pension changes to ward off forthcoming strike action.

Treasury chief secretary Danny Alexander and Cabinet office minister Francis Maude concluded a 90-minute meeting with union negotiators putting forward additional concessions to pensions changes proposed under Lord Hutton's commission.

The outcome of a trade union ballot for strike action on 30 November is due tomorrow.

The government has already said it will allow public sector schemes, such as the Local Government Pension Scheme, to ditch Lord Hutton's proposals for a career average scheme and keep the final salary arrangements if it can justify it is "fairer" for members.

Detailed proposals will be agreed for the new scheme by the end of the year and be implemented in 2015.

Source: Professional Pensions