Tweet
</span> 
Firefighters are among those who would be affected if pensions are changed
Members of public sector pension schemes should pay higher contributions, says an independent commission led by Lord Hutton.
This is his first short-term recommendation to the government to make savings in the increasing cost of the schemes due to rising longevity.
The schemes cover millions of public servants including those in the civil service, NHS, and local government.
Lord Hutton is also considering other fundamental changes in the longer term.
Final-salary schemes are "fundamentally unfair", he told the BBC.
When setting up the commission earlier this year, Chancellor George Osborne said that the projected rise in the cost to taxpayers of public sector pensions was "unsustainable".
Many public sector workers argue that they have accepted lower pay than they could get in the private sector in order to benefit from better pension provision.
But Lord Hutton rejected this: "There is no evidence that pay is lower for public sector workers to reflect higher levels of pension provision," he said.
Among the longer term changes being considered by Lord Hutton's independent public service pensions commission are:
changing the public service schemes from a final-salary to a career-average structurecopying the Swedish and Dutch examples of defined-contribution schemesraising normal pension ages beyond their current levels - typically 65 - as longevity increases.However, the interim report points out that the long-term cost of funding public service schemes has already been drastically reduced.
The recent decision to uprate pensions in line with the consumer prices index (CPI) rather than the retail prices index (RPI) has shaved 15% from the cost of the schemes.
Taken together with other changes in the past few years, such as raising the pension age to 65 for newer recruits, the schemes now cost 25% less to fund than they did a few years ago.
"All these past reforms, the current pay freeze and planned workforce reductions will reduce the future cost of pensions," the report said.
"The gross cost of paying unfunded public sector pensions is expected to fall from 1.9% of GDP in 2010-11 to 1.4% of GDP by 2060."
The commission's final report will be published in time for the 2011 Budget.
This article is from the BBC News website. ? British Broadcasting Corporation, The BBC is not responsible for the content of external internet sites.
Firefighters are among those who would be affected if pensions are changed Members of public sector pension schemes should pay higher contributions, says an independent commission led by Lord Hutton.
This is his first short-term recommendation to the government to make savings in the increasing cost of the schemes due to rising longevity.
The schemes cover millions of public servants including those in the civil service, NHS, and local government.
Lord Hutton is also considering other fundamental changes in the longer term.
Final-salary schemes are "fundamentally unfair", he told the BBC.
When setting up the commission earlier this year, Chancellor George Osborne said that the projected rise in the cost to taxpayers of public sector pensions was "unsustainable".
Many public sector workers argue that they have accepted lower pay than they could get in the private sector in order to benefit from better pension provision.
But Lord Hutton rejected this: "There is no evidence that pay is lower for public sector workers to reflect higher levels of pension provision," he said.
Among the longer term changes being considered by Lord Hutton's independent public service pensions commission are:
changing the public service schemes from a final-salary to a career-average structurecopying the Swedish and Dutch examples of defined-contribution schemesraising normal pension ages beyond their current levels - typically 65 - as longevity increases.However, the interim report points out that the long-term cost of funding public service schemes has already been drastically reduced.
The recent decision to uprate pensions in line with the consumer prices index (CPI) rather than the retail prices index (RPI) has shaved 15% from the cost of the schemes.
Taken together with other changes in the past few years, such as raising the pension age to 65 for newer recruits, the schemes now cost 25% less to fund than they did a few years ago.
"All these past reforms, the current pay freeze and planned workforce reductions will reduce the future cost of pensions," the report said.
"The gross cost of paying unfunded public sector pensions is expected to fall from 1.9% of GDP in 2010-11 to 1.4% of GDP by 2060."
The commission's final report will be published in time for the 2011 Budget.
This article is from the BBC News website. ? British Broadcasting Corporation, The BBC is not responsible for the content of external internet sites.