Public servants should be wary of consultation on discount rate for pension contributions

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date: 9 December 2010

embargo: for immediate release

Commenting on the government's consultation on the discount rate used to set contribution rates for the unfunded public service pension schemes, launched today (Thursday) by the Treasury, TUC General Secretary Brendan Barber said:

'Public sector workers should be very nervous of this discount rate review as it could lead to a stealth increase in their contributions at a time when they are facing a pay freeze, job losses and a three per cent contributions grab announced in the spending review.

'There is no case for a special discount rate for public sector pensions as there should be a common way across government for measuring future costs in today's money.

'The 3.5 per cent rate currently used is similar to that followed in funded schemes with a strong employer covenant, within an acceptable range according to Lord Hutton, backed by academic research and used by other countries.

'Any move to change it will be seen as just another way to make public sector workers pay an unfair contribution to putting right an economic crash they did nothing to cause.'

NOTES TO EDITORS:

- The Treasury consultation is available at www.hm-treasury.gov.uk/consult_unfunded_pensions.htm

- All TUC press releases can be found at www.tuc.org.uk

- Register for the TUC's press extranet: a service exclusive to journalists wanting to access pre-embargo releases and reports from the TUC. Visit www.tuc.org.uk/pressextranet

Contacts:

Media enquiries:
Liz Chinchen T: 020 7467 1248 M: 07778 158175 E: media@tuc.org.uk
Rob Holdsworth T: 020 7467 1372 M: 07717 531150 E: rholdsworth@tuc.org.uk
Elly Gibson T: 020 7467 1337 M: 07900 910624 E: egibson@tuc.org.uk

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