New pensions model urged

MORE than a quarter of the workforce in Suffolk is set to lose money in the great public sector pension shake-up.

A total of 73,000 people work in the public sector in Suffolk – 28% of the workforce.

They face the prospect of working longer, getting smaller pensions and having to pay more for them as a result of a report on public sector pensions by former Labour cabinet minister Lord Hutton.

He called for a new model of pensions to be introduced that shared the risk more fairly between the Government and workers.

The news angered the largest public service union, UNISON, whose members are also facing the prospect of job losses and changed working conditions as local authorities reorganise themselves.

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A spokeswoman for UNISON in Suffolk said: “Yet again we are seeing the myth of the public sector pension being wheeled out as an easy target but with little understanding or explanation of the reality or indeed how it will affect people here in Suffolk.

“The reality for public sector workers here is that the majority are on low wages, work part time, and put in long hours over many years of service in their local communities.

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“Staff across Suffolk, whether they are care workers or cleaners, already pay out of their own wage packet every month into their pension scheme, and they have been doing this year on year in order to draw a pension which is anything but ‘gold plated’.

“Today’s recommendation is a double whammy as thousands of local people, more than a quarter of the working population, are being asked not only to pay in more but to work longer before they get it.”

The Hutton Report was also being studied at Suffolk County Council which has thousands of employees who are in its own pension scheme.

Teachers and firefighters are covered by a separate pension scheme which is administered by central government.

Peter Bellfield is chairman of the county’s pension committee and agreed with many of the findings of Lord Hutton’s report.

He said: “In Suffolk our pension fund is in a reasonably good position – we are still taking in more money than we are paying out.

“That may change in the future – but things look all right at the moment. But there are problems looming here and in other areas of the public sector and I can see the logic behind this report.

“From what I have seen this is only a first report dealing with general issues. We will have to wait for more details over the next few months.”

Suffolk County Council’s pension fund has 19,759 members of whom just over half are employed directly by the county council.

Others are employed by district and borough councils across Suffolk, are civilian police employees, non-teaching school staff, and staff working for further and higher education colleges.

Lord Hutton ruled out replacing final salary pensions with individual funded defined contribution ones – under which the employee bears all the risk – as has happened in much of the private sector.

He said he would consider a range of alternatives in his final report, including a career average scheme, under which pensions are based on a worker’s average pay during their career, rather than their salary immediately before they retire.

He added that if the Government wanted to make short-term savings it should raise pension contribution rates for workers.

But he stressed that it should protect the low-paid from the increases and not hike rates for the armed forces at this time.

Lord Hutton was commissioned to carry out the review by Chancellor George Osborne, who warned that the “unsustainable” rise in the annual bill for public sector schemes must be tackled.

The report dismissed descriptions of public sector pensions as being “gold-plated’’, saying the average pension paid out was around �7,800 a year, while half of people received less than �5,600 and 10% were �1,000 or less.

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