Page last updated at 20:16 GMT, Tuesday, 15 January 2013

Ministers accused over future pension entitlements

Labour have accused government ministers of failing to honour their commitment to public service unions over future pension entitlements.

Opposition spokesman Lord Eatwell made the accusations during committee stage debate on the Public Service Pensions Bill, on 15 January 2013.

Lord Eatwell told peers the bill would allow the government to renege on a pensions deal hammered out with unions.

"The government promised to provide public sector workers with defined benefit pension schemes in the form of career average pensions.

"The striking thing is that the bill does not honour this commitment because it provides that the schemes created under the bill can be defined benefit, defined contribution or any scheme of any other description."

He warned that this could raise concerns amongst public sector workers that the government could "renege on its promise" to replace final salary schemes with career average defined benefit schemes.

Treasury spokesman Lord Newby dismissed Labour's concerns, saying there was "no possibility" of the government wanting to replace the defined benefit schemes they "worked so hard to develop".

Lord Newby denied that the bill's provisions in this area could be amended "on the nod," but Lord Eatwell warned the opposition was likely to return to the issue at a later stage of the bill's passage.

The Public Service Pensions Bill moves public sector pensions over to a career average scheme and increases the age at which members can draw their pensions.

The government's plans are based on a report by Labour peer Lord Hutton, who designed four key tests for public service pension reform: affordability, fairness to public service workers, fairness to taxpayers, and transparency.

The bill will now receive a third and final day of committee stage debate in the Lords later this month.

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