Page last updated at 19:09 GMT, Tuesday, 30 October 2012

Public Service Pensions Bill part two

MPs approved the Public Service Pensions Bill, which moves public sector pensions over to a career average scheme and increases the age at which members can draw their pensions, at second reading on 29 October 2012.

Labour backbencher John McDonnell, the MP for Hayes and Harlington, condemned the bill.

"I think we will look back on this day and this bill as the day the public sector pension was started on a downward slope," he told MPs.

"The erosion of benefits, the increase in contributions leading eventually to the undermining of these schemes and their closure.

"I think that will result in many people being impoverished and greater inequality being created within our society."

But former Conservative minister Nick Gibb assured MPs that public sector employees would "continue to benefit from a defined benefit pension scheme that is sustainable in the long term and that will be supported by the public" as a result of the legislation.

At the end of the debate, MPs backed the bill by 276 votes to 19, a government majority of 257.

The government says the legislation will make public sector pensions sustainable, with costs shared between employers, workers and taxpayers "more fairly".

It established the Independent Public Service Pensions Commission, chaired by Labour peer Lord Hutton, which published its final report in March 2011.

Lord Hutton's recommendations were the basis for consultation between the government and public servants, trades unions and other member representatives, and the bill implements the agreements reached on:

  • moving to career average pension schemes, instead of final salary schemes
  • public servants working longer to receive a full pension, except for the Armed Forces, Police Officers and Firefighters
  • making no changes to the pensions of those who are ten years from their Normal Pension Age on 1 April 2012
  • changing the governance arrangements of public service pension schemes.

This bill applies to the whole of the United Kingdom.

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