Deloitte response to the interim report of the Independent Public Sector Pensions Commission
8 October 2010
Deloitte, the business advisory firm, welcomes the publication today of the interim report of the Independent Public Sector Pensions Commission led by Lord Hutton. The commission’s commitment to expose the real costs of providing the current range of public service pensions will bring much needed clarity to underpin its final recommendations for future structural reform.
Tony Clare, head of Deloitte’s pension practice, commenting on the report, said: ”The Commission has made it clear that a system of notional accounts will be considered in further detail as one of the options for future pension provision for public service workers. As we recommended in our evidence and views to the Commission a notional accounts system has worked well in other countries and brings greater transparency to the cost of pensions as well as more flexibility for both workers and the state.
“Defined benefit pensions based on career average earnings rather than on final salary before retirement will also be considered. While this option would maintain a valued core defined benefit for public service workers, we believe that it would need to be combined with limits on pensionable salary to bring overall future costs under control.
“We had also proposed increasing employee contributions and aligning public sector workers’ retirement age with the State Pension Age over time. We believe that overall, the Commission’s interim report sets out clear ideas for a viable way forwards for public sector pensions reform.”
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Notes to editors
About Notional Accounts
A Notional Accounts system of pension provision for public sector workers has been implemented in Sweden and brings greater transparency to the cost of pensions as well as more flexibility for workers and the state. It is based on crediting individual member accounts with employer and employee contributions, revaluing these on an agreed basis up to retirement and then converting the notional value of the account to a pension income. Further consideration of Notional Accounts was one of the key recommendations of Deloitte’s submission of evidence and views to the Commission.
In this press release references to Deloitte are references to Deloitte LLP, which is among the country's leading professional services firms.
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The information contained in this press release is correct at the time of going to press.
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