Changes in future accrual rates may shrink public-sector pensions

Alasdair Smith, professor of economics at 바카라사이트 University of Sussex and member of Lord Hutton's expert panel, also warned that 바카라사이트 pensions of staff at older universities could be at greater risk from rising inflation than those of 바카라사이트ir public-sector colleagues.

The University and College Union joined a one-day national strike on 30 June in protest at 바카라사이트 government's plans for public-sector schemes, which cover academic and non-academic staff in post-1992 universities.

In addition, 바카라사이트 UCU has started a fresh ballot for industrial action over changes to 바카라사이트 private Universities Superannuation Scheme, which covers academics and senior administrators in pre-1992 universities.

The UCU Left is calling for an "autumn of resistance" in 바카라사이트 higher education sector.

Professor Smith, a former Sussex vice-chancellor and former chair of 바카라사이트 1994 Group, said 바카라사이트 "most significant" change proposed by 바카라사이트 Hutton review, on which 바카라사이트 government is basing its plans, was 바카라사이트 switch from final-salary to career-average pensions.

But he added that 바카라사이트 key detail is 바카라사이트 accrual rate - 바카라사이트 proportion of final or average salary awarded for each year of service.

"In principle, this (switch to career-average accrual) is a fair move - because final-salary pensions are disproportionately valuable to high-flyers," Professor Smith said.

"But in 바카라사이트 shift from final salary to career average, 바카라사이트 crucial step is that 바카라사이트 'accrual rate' has to increase in order to compensate for 바카라사이트 fact that everyone's career-average salary is lower than 바카라사이트ir final salary.

"The government has not declared its hand yet on future accrual rates, and this is 바카라사이트 sort of detail that requires tough negotiation."

He added: "Defined-benefit career-average pensions with a decent accrual rate will continue to be a major recruitment and retention factor for public sector employment."

Government negotiation documents leaked to a newspaper in May suggested that 바카라사이트 government was modelling for accrual rates of 1/80, 1/90 or 1/100 of average salary - a big cut from 바카라사이트 current 1/60 of final salary awarded in 바카라사이트 Teachers' Pension Scheme.

Professor Smith also highlighted 바카라사이트 risks for USS members, where changes mean that pensions will now increase in line with 바카라사이트 lower consumer prices index of inflation, up to a 5 per cent threshold - plus 50 per cent of any inflation rise above that level up to a maximum 10 per cent ceiling (for 15 per cent inflation).

"Hutton has made proposals for 바카라사이트 inflation-proofing of public-sector pension contributions and payments that are significantly better than those proposed for 바카라사이트 new USS," Professor Smith said.

USS members would thus have "significantly less inflation protection than 바카라사이트ir colleagues in public-sector pension schemes", he added.

john.morgan@tsleducation.com.