Union responds to pensions report

The FDA responded across the media to today's publication of Lord Hutton's public sector pensions report.

Jonathan Baume, the union's general secretary, appeared on BBC Breakfast, BBC Radio 4's Today programme and Sky News.

Speaking at lunchtime on Sky News, he said: "People obviously understand that we are all living longer... and at the moment that looks likely to increase. But we agreed substantial reforms back in 2006 and 2007 and similar changes were agreed for all of the other public sector schemes. For example, one civil servant in five already has a pension age of 65 and those people are also in a career average scheme - the kind of scheme Lord Hutton is recommending.

"I think the problem with Lord Hutton's report, which is complex and thoughtful... is that firstly there is a danger the Government will pick the bits it likes and ignore some of the very helpful suggestions and arguments Lord Hutton puts forward. But underpinning all of that is the recent change in the way that pensions are indexed - from retail prices index to CPI (the consumer prices index) which has slashed about 15% on average from the value of a pension. And secondly, that the Government is looking to raise the contribution rates that people pay by an average of at least 3% by April next year.

"[FDA members] are not only the people that will lose out from abolishing final salary schemes, but also face the highest potential rises in their pension contributions, which is in effect a form of taxation.

Baume went on to say that particularly for those approaching retirement, "changing the goalposts... will be seen as very unfair indeed".

He said that any change had to be agreed by scheme members themselves and that, "if the Government simply insists on raising contribution rates and at the same time are telling people they will get a less for the money they are paying, then I think people will be very sceptical about agreeing change".

Press release
Hutton pensions report: FDA response