Those commentators scanning the recent party conference speeches for clues about what the future is for public sector pensions might have be somewhat disappointed at the lack of detailed debate. The Liberal Democrats promised a radical review of public sector pensions, but touched only on moving to ‘higher employee contributions or a move to later retirement ages' as a possible outcome. The communities secretary, John Denham, reaffirmed his commitment to tackle the pensions entitlements of high earners in local government – first trailed in proposals issued by his department – which suggested increasing local government pension scheme contributions to 10% for those earning more than £100,000. On a similar theme, shadow chancellor George Osborne made room in his conference speech to say that it was time for a £50,000 pension cut-off, as well as confirming the Conservative Party's pledge to close the parliamentary pension scheme to new entrants. To a degree, it is disappointing that the discussions on pensions from the two main parties appear to have converged on the pay and benefits of higher earners in the public sector rather than on the wider issue of the important role public sector pensions play in the retirement income plans arrangements of five million public sector workers. However, perhaps we should not be too surprised at the limited scope of the current proposals, as the parties have many more immediate public finance issues to consider. Moreover, proposing radical changes to public sector pensions which are likely to take time to enact, and even longer to lead to reductions in public sector spending, is an even greater gamble than a public sector pay freeze, which would pay back immediately. Nigel Keogh is technical manager, pensions and central government, CIPFA
