Public Servant Lifestyle

Trade & Industry Secretary Alan Johnson is warning public sector workers that shifting trends in the UK's demographic 'make up' are an inevitable trigger for controversial changes to their retirement and pension payment arrangements.

Proposed changes could see many public sector workers - who currently retire with a pension at 60 - staying on for up to an additional five years.

"In 1900" Mr Johnson told the Trades Union Congress conference, "...when Keir Hardie's Labour Representation Committee was established, life expectancy was 47. Now, after a century of progress, and half a century of the National Health Service, it's 78.

State Pension

"In 1908, when the state pension was first introduced, there were 14 people working for every one person retired; now the ratio is three to one, and, by 2050, it will be two to one. With a declining birth rate and increased longevity, we have a cradle to grave welfare state, with fewer cradles and a thankfully longer journey to the grave.

"There is not a single trade union in this Congress who has not had to tackle the ramifications of the dramatic changes that Adair Turner (leading the Government's Pensions Review) highlighted in respect of the pension provisions of your members.

"Indeed, every Trade Union here has had to review their pension arrangements as an employer for their own staff. There should be no surprise therefore that government, as a major employer, has had to do the same.

"I fully accept that our original approach was wrong. Public servants have a right to expect proposals to change their pensions arrangements to be discussed and negotiated with their trade unions. That wasn't happening before - I hope that Brendan (Barber - the TUC general secretary) and his colleagues accept that it's happening now.

"Whilst we do want to change the retirement at 60 ethos, this is in the context of preserving high-quality, defined-benefit, index-linked pension schemes, making improvements to other elements of the schemes, preserving current arrangements for existing staff for almost a decade and introducing arrangements which give individuals a choice about when they retire - be it aged 60 or 65, or later.

"But we can only deliver this within a scheme that is capable of withstanding the demographic changes that are bound to have a radical effect on pension provision.

"I look forward to further discussions, and if we face the facts together, I'm confident that our negotiations will succeed."

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