Background and Policy Objectives
3.On 8 March 2012 the Executive agreed the introduction of major changes to public service pensions. In particular the Executive agreed to:
commit to the policy for a new career average revalued earnings (CARE) scheme model with pension age linked to state pension age to be adopted for general use in the public service schemes; and
to adopt this approach consistently for each of the different public sector pension schemes in line with their equivalent scheme in Great Britain and not to adopt different approaches for Northern Ireland.
4.On 26 November 2012 the Minister of Finance and Personnel announced a proposal to introduce a Public Service Pensions Bill in the Assembly, which would give effect to the principles for pension reform agreed by the Executive. These reforms were recommended by the Independent Public Service Pension Commission in its final report published in 2011(1).
5.The Independent Public Service Pension Commission reported that the public service pension structure in the United Kingdom has not responded flexibly to rising costs and increases in longevity over recent decades. The final report recommended the adoption of a new pension scheme design which would address the impact of long term scheme costs for taxpayers and employers. The report also recommended a general increase in pension age across the public service schemes and, with the exception of those for the uniformed services, that public service scheme pension ages should be linked to State Pension Age.
6.The Act has cross-cutting effect for the devolved public service schemes in Northern Ireland. It provides a framework containing core provisions for pension reform which will extend across public service schemes made for the following classes of public service employments:
civil servants;
devolved judiciary;
local government workers;
teachers;
health service workers;
fire and rescue service workers; and,
members of the police service.
7.The powers in the Act supersede existing powers to create schemes for the payment of pensions and other benefits under the following legislation:
Superannuation (Northern Ireland) Order 1972 (civil servants, local government workers, teachers, health service workers);
Fire Services (Northern Ireland) Order 1984 (continued by Article 60 of the Fire and Rescue Services (Northern Ireland) Order 2006 (fire and rescue service workers);
Police (Northern Ireland) Act 1998 (police officers); and,
Judicial Pensions and Retirement Act 1993 (devolved judicial offices).
8.The policy intention is for the reforms to apply to all public sector employments. The Act contains powers for the Department of Finance and Personnel to specify by order named public sector bodies, offices, or descriptions of bodies or offices, not captured by the categories given at paragraph 6 to which the core provisions will apply. The Act protects the benefits already earned by members of existing public service pension schemes and allows continued membership of those schemes for certain categories of persons who are closest to retirement.
The final report of the Independent Public Service Pensions Commission was published on 10 March 2011, http://cdn.hm-treasury.gov.uk/hutton_final_100311.pdfBack [1]