Public Service Pensions

Baroness Burt of Solihull Excerpts

Tuesday 20th December 2011 Commons Chamber

[Danny Alexander]

It is a matter for the trade unions to discuss their individual processes of engagement with their members. We have worked well with many of the trade unions in this process, but that does not extend to my being able to describe their internal processes to the right hon. Gentleman.

[Lorely Burt (Solihull) (LD)]

I congratulate everyone who has been involved in reaching the heads of agreement. This will give hard-working public sector workers the certainty that their pensions will remain among some of the very best available. Will my right hon. Friend explain how the move to career-average earnings will benefit women and low-paid workers in particular?

[Danny Alexander]

I am grateful to my hon. Friend for her comments. It is an important point, on which I am glad to have the chance to expand. At the moment, final salary schemes in the public sector work disproportionately to the advantage of people who are highly paid or who see a big increase in their salary at the end of their careers, and the contributions of lower-paid workers subsidise the pensions of the highest paid. On a career average basis, each year’s earnings is what it is and the contribution to be made is treated as what it is; pension is built up year by year on the basis of what people have earned and contributed. That means that each individual’s contributions are valued in a more similar way than they are in the inequitable schemes in place at the moment.