A two-way contribution to pension changes

Sir, Neil Austin (FT Weekend, Letters, September 2) asserts that public sector workers have had a substantial effective pay rise due to the increase in cost of providing their pensions over the past 10 years.

Over the past 10 years member contribution rates for public sector pension scheme members have increased by an average of 3.2 per cent of pay, the basis for calculating benefits has changed from final salary to career average salary, and pension age has increased by up to eight years (typically from 60 to 66, 67 or 68). There are also rules in place to cap the cost of public sector pension schemes. These reforms have had a significant impact over and above the public sector pay cap.

Neil Walsh

Pensions Officer, Prospect

London SE1, UK

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