Neil Record is the author of "Sir Humphrey’s Legacy", IEA, 2006.
On 20th June 2010, the Chancellor announced the formation of an Independent Public Service Pensions Commission chaired by Lord Hutton – former Labour Government Work and Pensions Secretary. In the Commission’s Terms of Reference, the Chancellor asked for “recommendations … on pension arrangements that are sustainable and affordable in the long term, fair to both the public service workforce and the taxpayer … while protecting accrued rights”.
Lord Hutton’s report made two major recommendations for reform, both of which the Government accepted. One was to raise the pension age in public sector pensions from generally 60 (occasionally 65) to the new State Pension Age (equating men and women at 65 – then rising to 68 by 2046). The other was to change the basis of calculation of the pension from "Final Salary" to "Career Average Revalued Earnings" (CARE). The imposition of the raised pension age has reduced the value of public sector pensions; the change to CARE has broadly not (although was portrayed in the press and by the unions as doing so). Other provisions included a government "cost cap".
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