Reports and Briefing Notes

The implications of the Coalition Government's public service pension reforms

This report and briefing paper set out the PPI's independent assessment of the impact of the Coalition Government's proposed reforms to public service pension schemes. The analysis covers the four largest schemes; NHS, Teachers, Local Government and Civil Service, which account for around 85% of public service pension scheme members. 

This report updates the report first published on 23 October 2012 and, as well as assessing the impact of the value of the pension benefit to members, includes additional analysis on the affordability and sustainability of the reformed public service pension schemes.

The intention of this report is to inform the policy debate and to aid understanding about the potential impact of the Government's proposed reforms to the public service schemes. The PPI is not lobbying for or against the implementation of the Government's proposals. This project has been funded by the Nuffield Foundation. The PPI is very grateful for their support. The views expressed in the research are those of the authors and not necessarily those of the Foundation.

Chapter one describes the Effective Employee Benefit Rate (EEBR), which is the measure used in subsequent chapters to measure the value of the pension benefit for a scheme member. The chapter also describes the three scenarios used to analyse the impact of the proposed reforms on the value of the pension benefit offered for a scheme member.  

Chapter two analyses the impact of the proposed reforms on the average value of the pension benefit offered across all members in each of the four largest public service pension schemes.

Chapter three analyses the impact of the different components of the Coalition Government’s proposed reforms. The analysis considers the impact on members of the NHS pension scheme who joined the scheme before the 2007/8 reforms and on members who joined after the introduction of the 2007/8 reforms.

Chapter four considers the implications of the Coalition Government’s reforms to the four largest public service pension schemes for scheme members with different characteristics, such as different salary progression, earnings levels and years of membership in the scheme.

Chapter five analyses the impact of the reforms on the affordability and sustainability of the four largest public service schemes by providing projections of government expenditure on these schemes.

Chapter six analyses the differences in pay and pension provision in the public and the private sector and the implications for making comparisons between the two sectors.

To download the briefing paper, please click here.

Press

Executive Summary