05 Jan Public Sector Pension Deal Negates Savings According to Consultant

A recent analysis by the consultant John Ralfe has claimed that the pensions deal that has been hammered out between public sector unions and the government will pretty much wipe out any of the savings that the government were hoping to make from raising the normal retirement age from 60 to 67 for public sector workers. Mr Ralfe claims that taxpayers will still face the same bill, stating "The total cost of the more generous but later pension is the same as the cost of the current less generous but earlier pension." However the Treasury has disputed his findings, stating "It is based on stylised assumptions rather than an overall workforce model, and only includes one of three strands of public sector pensions reform which will deliver savings, whereas the overall cost ceilings agreed with unions include all three." Ralfe's study points to the increase in accrual rates as a contributor towards costs that will offset the savings from the increased retirement age.