Hutton reforms questioned by public sector trustees

Liz Keenaghan-Clark, policy leader for the Independent Commission on Public Service Pensions, was forced to fend off queries from clearly unimpressed audience members of Public Service Events’ public sector conference.

One member from Warwickshire county council asked: “Why does this apply to us? We’re not in trouble, we run efficiently; if something is working shouldn’t we just leave it alone?”

Keenaghan-Clark said Hutton was not concerned with the sustainability of public sector pension schemes over the next decade, but with the fairness of them, and providing benefits for a flexible workforce.

“A final salary scheme doesn’t help those looking to step down the career ladder,” she continued, before adding there could also be benefits from merging some local government pension schemes.

Another delegate from Suffolk county council also asked whether outside contractors, who currently qualify for final salary pension contributions, would fall victim to Hutton’s much quoted “race to the bottom” if all outside contractors were removed from public sector schemes.

Keenaghan-Clark responded: “The problem is public sector employers have no leverage on the wages with contractors and that is too much risk for the government to bear.

"We’re hoping the issues you raise become less of an issue and the move to career average should make it easier for contractor employers to compete with public sector schemes.”