PENSIONS – WHAT DID THE HUTTON REPORT SAY?

Lord Hutton recommended:-

(1) To maintain the final salary link for past service i.e. Protection of “accrued rights”.

(2) Existing members to be moved to the new scheme “as soon as practical”.

(3) Career average scheme in future – updated in line with average wage increases.

(4) Pensions to be linked to prices e.g. Consumer Price Index (CPI).

(5) Tiered contribution rates i.e. higher earners pay even more.

(6) Greater choice over when to draw down pension – either earlier or later than Normal Pension Age (NPA).

(7) An increase in NPA for teachers’ pension in line with State Pension Age.

(8) A fixed cost ceiling of how much government will contribute, on average, to employees’ pensions over the long term.

(9) Public service pensions to have a common framework, although there maybe some exceptions e.g. uniformed services where NPA may be 60.

(10) Regular benefit statements to be issued annually.

Lord Hutton suggested that details of each scheme should be worked out in consultation with employees and their representatives. He also said that it should be possible to introduce the new schemes before the end of this Parliament.