We can pay our people properly

PCS submitted compelling evidence to the government's review on public-sector pensions, busting claims that they are overgenerous and unaffordable.

A report by the Public Sector Pensions Commission this month urged the government to raise employee and employer contributions to pay for the size of public-sector pension liabilities.

But the union rejected those findings, arguing that an earlier 2008 Treasury report had found pensions amounted for only 1 per cent of GDP, projected to rise by only 1.2 per cent by 2057.

And the National Audit Office (NAO) reported recently: "When projections of liability are based on earnings, the total annual payments from the Civil Service pension scheme will be largely stable over the next 50 years."

Coupled with the pay freeze announced in the emergency Budget in June and potentially 600,000 jobs being cut in the public sector alone, PCS said the modest pensions that members take in retirement will be affordable.

Its general secretary Mark Serwotka said: "We totally reject the premise for this review, that our members' pensions are unaffordable and unreformed, and we have made this case very clearly to the Hutton commission.

"There is an alternative to cutting public spending that will help our economy to grow, and we believe this is the most effective and sustainable way to ensure we can continue to pay the pensions of hard-working and loyal public servants in future years."

PCS has long campaigned for a clampdown on big business tax avoidance which loses the Treasury an estimated £120 billion each year.

The Prospect union's pensions officer Neil Walsh said: "By presenting the figures in terms of an annual percentage of gross domestic product the NAO have brought clarity to a issue which other partisan groups often seek to bury in alarming multibillion-pound liability figures.

"The report makes it clear that public-sector pensions are far from being the unsustainable burden on current or future generations of taxpayers they are often portrayed as."

PCS has held several protests over the austerity measures including outside the Treasury in June.

With workers facing the prospect of swingeing cuts and a savage assault on pensions, PCS declared its intention to encourage "co-ordinated action" in conjunction with other public-sector unions.

A spokesman added: We are looking at this very much in the context of a wider attack on jobs and pay in the public sector.

"It is our conference policy to have a co-ordinated campaign around jobs, pay and pensions. We call on the TUC to co-ordinate a day of action in October around these issues."

Pensions

• The change in indexation from RPI to CPI immediately reduced the value of public service pensions by tens of billions of pounds.
• The NAO's report also shows that civil service pension scheme payments accounted for approximately 0.3% of GDP in 2009/10 and are projected to account for approximately 0.3% of GDP in 2059/60. The 2007 reform of the Civil Service pension scheme was designed to put the scheme on a sustainable footing for the long term and the NAO confirms this objective has been met.
• Low-paid workers faced with increasing contributions are more likely to leave the pension scheme, thus placing longer-term pressure on the welfare system.