Conservatives hint at closing public sector final salary pensions

The Conservative Party leader David Cameron has hinted that the public sector’s final salary pension scheme could be closed and workers moved into a defined contribution arrangement if the party is voted in to government.

Speaking to the Greater Manchester Chamber of Commerce, Cameron said: “My vision over time is to move increasingly towards defined contribution rather than final salary schemes [for the public sector]. We have got to end the apartheid in pensions.”

A party spokesman later added that this would be a “very long-term policy discussion”.

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However, responding to questions from delegates after speaking at the National Association of Pension Fund’s Trustee Conference, Pensions Minister Rosie Winterton said this is not the time to undermine final salary provision for staff in this sector. She said: “I feel that for many in the public sector this seen as a part of the overall package. There are many people who say that when they have lower incomes, pensions are an important part of why they work where they work.

“I don’t think this is the time as we go up to 2012 to start undermining any of the schemes that are out there in the public sector. There have been changes made to many of them, such as the teachers’ pension, but I don’t think this is the time. Some of this is political, we need to take it on the chin. It is not the time to go out to millions of people and say we are going to undermine your pension provision.”