Public sector pensions review

Final salary pensions are to be scrapped for public sector workers, the Independent Public Services Pension Commission has recommended.

Former work and pensions secretary John Hutton, now a Labour peer, made the proposals as the coalition sought political cover for introducing the controversial changes.

Under today's proposals existing final salary public pension schemes should be scrapped and replaced with new schemes.

These would see the employee's pension entitlement linked to their salary, but related to their career average earnings.

Opponents will argue that recruitment to many public sector jobs will be hit by the changes, as they accept relatively low salary levels because of previously generous pension settlement.