Public Service Pension Reform

Tuesday 8th October 2013 Written Statements

[The Chief Secretary to the Treasury (Danny Alexander)]

The interim report of the Independent Public Service Pensions Commission (IPSPC) found that current pension structures, combined with fair deal requirements, are a barrier to plurality of public service provision. The Government announced at the spending review 2010 that they would accept the suggestion to review the fair deal policy.

The Government confirmed via a written ministerial statement on 4 July 2012, Official Report, column 53WS, that the overall approach to the fair deal would be retained, but that this would be delivered by offering access to the public service schemes for staff compulsorily transferred out of the public sector. In November 2012 the Government published their response to the consultation which set out their position in more detail.

On publishing the consultation response in November 2012 the Government announced a further consultation to seek views on how the reformed fair deal policy should apply to staff that have already been compulsorily transferred out of the public sector under the old fair deal.

The consultation process has now concluded. When existing contracts are retendered, there will be a presumption that staff covered by the fair deal policy should be offered access to a public service scheme. However, we will provide flexibility for employers to provide a broadly comparable scheme where—but only where—legal requirements are a bar to providing access to a public service scheme. The Government expect that in the vast majority of cases, when a contract is retendered, previously transferred staff will be offered access to a public service pension scheme.

Yesterday I published both the response to the consultation on retendering of existing contracts, and new guidance setting out how the reformed policy will operate. Both documents are available at the link:

https://www.gov.uk/government/consultations/further-consultation-on-the-fair-deal-policy.

The Government are grateful to all those who responded to the consultation and assisted with reform. The new approach to fair deal will ensure that staff compulsorily transferred out of the public sector will continue to have access to good quality pensions. It will also achieve better value for money for the taxpayer by reducing the costs and risks to employers associated with the provision of broadly comparable pension schemes, thereby opening public services to greater competition.

I am placing a copy of the consultation response on retendering and the new fair deal guidance in the Libraries of both Houses.