Written question asked by David Laws (Liberal Democrat) on Monday, 18 June 2007, in the House of Commons. It was due for an answer on Wednesday, 20 June 2007. It was answered by Stephen Timms (Labour) on Monday, 25 June 2007 on behalf of the Treasury.

Pensions: Public Sector

Question: To ask the Chancellor of the Exchequer what estimate he has made of the proportion of reductions in public expenditure arising from public sector pension reform which will be made in respect of (a) existing staff and (b) new entrants; and if he will make a statement.

Answer: Savings estimates made at the time of the Public Services Forum agreement in 2005 on the reform of the three main unfunded pension schemes—the NHS, Teachers and the Civil Service Pension schemes—showed that over the next 50 years 85 per cent. of savings as a result of these reforms were expected to come from new entrants.The assumptions on which the 2005 savings estimates were based have now been superseded. Moreover, these estimates did not take account of reforms that were agreed later, such as cost sharing between employers and employees and capping of employer contribution rates.Scheme reforms are still being finalised, and scheme costings are being updated as part of the scheme valuation process. The latest valuations for the NHS pension scheme and the civil service pension scheme, for example, are due for publication by 2008. Updated savings estimates may be possible once the valuations are complete.

Secondary information