Government report proposes British pensions shake-up

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A government-commissioned report on Thursday recommended changes to the size and time-line of pensions earned by public sector workers in Britain, echoing similar calls across Europe.

John Hutton, a minister in the previous Labour government, told the Conservative-Liberal Democrat coalition that state workers should no longer receive pensions based on their pay levels immediately before they retire.

Outlining his final recommendations, Hutton said retirement pay of state workers such as nurses, police and teachers, should instead be based on individuals' average salaries throughout their careers.

British finance minister George Osborne asked Hutton to carry out a review after warning that the "unsustainable" rise in the annual bill for public sector schemes must be tackled.

The cost of providing public sector pensions has soared by nearly a third in the past decade. A total of £32 billion (37 billion euros, $52 billion) was paid in pensions to civil servants during 2008/09.

Hutton also recommended raising the age at which most state workers begin drawing their pensions to 66 by 2020. Members of the armed forces, police and firefighters should have their retirement age raised from 55 to 60, he said.

The former minister's proposals come after millions of people in France have recently protested over plans to raise their retirement age from 60 to 62, while Greece was also hit by strikes over the issue last year.

Union heads hit out at Hutton's report, warning of strike action.

Unison leader Dave Prentis said Hutton's proposals would be "one more attack on innocent public sector workers who are being expected to pay the price of the deficit, while the bankers who caused it continue to enjoy bumper pay and bonuses".

He added: "On top of a pay freeze, and the threat of redundancy, they now face a pensions raid. This brings the threat of industrial action closer."

Bob Crow, leader of the Rail Maritime and Transport union and known for his outspoken comments said "it is clear from all the signals that from nurses to transport staff, the government intends to make staff work longer, pay more and get less.

"There is no question that this is the issue where coordinated strike action is on the cards."

Hutton said it should be possible to introduce new career-average schemes by 2015.

© 2011 AFP

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