The initial findings of the Hutton review of public sector pensions are due out this week. It’s keenly awaited by many in the pensions industry and perhaps something rightly viewed very apprehensively by anyone in the public sector. I’ve been thinking today about what I’d like to see from it.
I’d like it to show real understanding of pensions, how public sector pensions are paid for, who pays for them and how governments should make decisions on allocating resources fairly through generations. It should be fair without political or private/public sector bias. It needs to recognise the variety of workers, salary levels and demographics so one size probably doesn’t fit all.
In doing so it needs to avoid meaningless statistics based on index linked gilt yields that will only give large numbers for journalists to seize upon and sensationalise. It also needs to avoid language that will incite one side or the other. For example, references such as “ponzi scheme” as in the recent Public Sector Pensions Commission report are not helpful at all. Neither would it be helpful to suggest public sector pensions are small on average so ok.
Above all I’d like it to have some practical solutions that have real merit and will be understood by members. Otherwise I’m sure we will only end up revisiting things again in no time at all.
I really hope it is indeed “on the button” and doesn’t cause unions to instead “press the button” on strike action.