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Pension report – higher contributions a good start, but not nearly enough

Following the publication of Lord Hutton’s interim report, members of the Public Sector Pensions Commission – which reported in July 2010 – welcomed many of the initial proposals but stressed the greater importance of putting pensions on the right footing for the long term.

Peter Tompkins, who chaired the earlier investigation set up by the Institute of Economic Affairs, the Institute of Directors and others, said:

“With the value of public sector workers’ pensions often pushing towards 40% of their salaries, employees need to realise that larger contributions are entirely necessary. I welcome the Commission’s focus on looking at a way of paying benefits that better reflects average salaries for workers' full lifetimes. This is likely to be a popular change, particularly for the many rank and file employees.

“This is a problem that should have been dealt with two decades ago. The current situation is unsustainable and the government must make this absolutely clear.”

Philip Booth, vice-chairman of the Public Sector Pensions Commission and Editorial Director of the Institute of Economic Affairs commented:

"Many of the suggestions for long-term reform of the schemes are sensible but the report ducks some of the crucial issues. We must put the accounting for public sector pension schemes on a proper economic footing. Furthermore, the full costs of public sector schemes must be borne by employers and employees – both equity and economic efficiency demand this.

“Essentially, the Commission has asked the government to set up another enquiry into the issue of accounting for and promoting transparency of costs. This is really not necessary – the groundwork has already been done so that Lord Hutton himself can make a recommendation on this issue."

Notes to editors

1) The Public Sector Pensions Commission was established in the autumn of 2009 by the Institute of Economic Affairs, the Institute of Directors and other groups. It was chaired by an independent actuary. Its terms of reference were to improve transparency and public understanding of public sector pension costs and present to the new Government a realistic set of options for reform of the present public sector pension arrangements. It was entirely separate from the official commission on public sector pensions headed by John Hutton.

2) The Commission’s report was release in July 2010, and was submitted to Lord Hutton’s commission.

3) The Public Sector Pensions Commission ( comprised seven Commissioners and one Secretary. Its views do not necessarily reflect those of the organisations to which the individual Commissioners are affiliated:

• Peter Tompkins, Fellow of the Institute of Actuaries, Chairman
• Philip Booth, Institute of Economic Affairs, Vice Chairman
• David Acland CBE DL, CHK Charities Ltd
• Ros Altmann
• Andrew Lilico, Policy Exchange
• Neil Record, Institute of Economic Affairs
• Malcolm Small, Tax Incentivised Savings Association
• Corin Taylor, Institute of Directors, Secretary

4) Please direct media enquiries to Ruth Porter on 020 7799 8900 or 07751 717 781 or email


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