Hutton pledges public sector DB protection

The one-time Labour pensions minister, now charged with leading the coalition government’s review of public sector pensions, met about 25 Trades Union Congress (TUC) delegates, from across various interested bodies, last week.

schemeXpert.com sources have confirmed he did not give many specific insights into his thinking, but did offer reassurances defined benefit (DB) schemes would be retained in some form, despite various levels of final salary caps currently being run through “models”.

He was also said to be receptive to entreaties from the army, police and fire service representatives present, to recommending the government exempt those organisations from planned relaxation of the retirement age law.

He also confirmed last week’s disclosure on schemeXpert.com that Hutton and his team of civil servants seconded from Treasury has given up on meeting their September 30 deadline for producing a report, and are now aiming for mid October.

But recommending benefit caps will still lead to a showdown with unions, even if smaller final salaries are protected by the government.

In June, as revealed by PW , public sector staff representative Unison demanded the 101 local government pension schemes (LGPS) in England, Scotland and Wales be merged into three – one for each country.

The union claimed this would see £1bn annual savings, and warned they will not compromise further on payments made or received by workers, having already accepted higher earning staff put more into schemes since 2006.

This places Unison at odds with the UK’s largest adviser to public sector pension schemes, Hymans Robertson, which has warned Hutton against quick and radical changes , but expressed a preference for increasing employee contributions.