News story

“Reform is essential” – PM

Prime Minister David Cameron has addressed the Local Government Association conference and stressed that public sector pension reform is essential.

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Mr Cameron said the proposed reforms were a “good deal” which would secure affordable pensions for decades to come.

Addressing the conference, Mr Cameron warned that the pension system was in danger of “going broke” unless action was taken because people were living much longer.

We just can’t go on as we are. That’s not because, as some people say, public service pensions are ridiculously generous. In fact, around half of public service pensioners receive less than £6,000 a year.

The reason we can’t go on as we are is because as the baby boomers retire - and thankfully live longer - the pension system is in danger of going broke.

The PM argued that the current system was unfair with civil servants contributing around 1.5% and 3.5% towards their pension, compared with 19% from taxpayers, while taxpayers paid the equivalent of £1,000 per household towards maintaining public sector pensions.

We need to rebalance the system. That’s why from April next year, we are proposing to increase the contributions public sector workers have to make to their pension.

Workers will still receive a guaranteed amount in retirement and Mr Cameron said it was untrue that workers would be stripped of benefits they had already accumulated.

The PM said the government wanted to put forward proposals that were well thought through and maximised cross-party consensus.

I believe rational and reasonable people, when they sit in a room and look at the proposals, will recognise this is good for the long-term future of the public sector, which I care about deeply.

Published 28 June 2011