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Civil Servants: Pensions

Treasury written question – answered on 29th November 2011.

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Photo of John Martin McDonnell John Martin McDonnell Labour, Hayes and Harlington

To ask the Chancellor of the Exchequer

(1) what (a) methodology and (b) assumptions were used to calculate the example of a civil service pension used on page 17, Box 3.B case study 1 of Public Service Pensions: good pensions that last, Cm 8214;

(2) with reference to page 17, Box 3.B case study 1 Table 3.B of Treasury Command Paper Public Service Pensions: good pensions that last, Cm 8214, which civil service pension scheme the example relates to; and how many years pensionable service and which inflation index were used in the calculation relating to the old scheme;

(3) with reference to page 17, Box 3.B case study 1, Table 3.B options to consider Public Service Pensions: good pensions that last, Cm 8214, whether a reduction for early release before reaching pensionable age was used to calculate the figure for retirement at 61 years six months.

Photo of Katy Clark Katy Clark Labour, North Ayrshire and Arran

To ask the Chancellor of the Exchequer

(1) how many years pensionable service was used to calculate the £12,800 pension payment referred to in his Department's paper Public Service Pensions: good pensions that last (Cm 8214) page 17, Box 3.B, case study 1;

(2) with reference to the new career average scheme proposals for civil service pension schemes outlined in his Department's paper Public Service Pensions: good pensions that last (Cm 8214) page 17, what assumptions were made in relation to the accrual rate;

(3) what inflation index was used in the production of his Department's career average Pension Scheme Proposals for the Civil Service.

Photo of Danny Alexander Danny Alexander The Chief Secretary to the Treasury

holding answers 25 November 2011

On 2 November 2011, the Government published “Public Service Pensions: good pensions that last”, Cm8214. The document includes several case studies that provide illustrative examples of the impact on individuals if the Government's preferred pension scheme design were adopted. These case studies were prepared for HM Treasury by Hymans Robertson LLP using IFS data and HM Treasury assumptions.

The career paths modelled assume each individual begins work aged 22, has a three year career break and retires at the normal pension age of their specific pension scheme.

The assumptions used in calculating these case studies can be found on page 26 of the document. In addition, pensions taken before state pension age are subject to an early retirement reduction.

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