Public Service Pensions

Damian Hinds Excerpts

Tuesday 20th December 2011 Commons Chamber

[Danny Alexander]

At the start of the process, the Office for Budget Responsibility forecast opt-out rates resulting from the contributions increase as being about 1% of pay bill. Of course, because the local government scheme is a funded scheme, one thing we are allowing is that savings delivered by long-term reform, such as increasing the retirement age or moving to a career-average basis, can be used to cover the cost of some of the contribution increases. It is therefore possible that once the final local government scheme is put in place, local government workers will face little or no contribution increase because they are in a funded scheme.

[Damian Hinds (East Hampshire) (Con)]

For purposes of comparison, what estimate has my right hon. Friend made of the proportion of new starters in the private sector who can look forward to a defined benefit scheme?

[Danny Alexander]

The number of new starters in the private sector who can look forward to a defined benefit scheme is very small. The number of open defined benefit schemes is decreasing, but that should not deflect us from our wish to continue to provide defined benefit pensions in the public sector, which are a right and proper part of the reward for a lifetime’s commitment to serving the public.