The government has ignored union strike threats and pressed ahead with plans for pension reforms it believes will save £430 billion over the next 50 years.
The controversial changes have caused upset among trade unions, but the publication of the Public Service Pensions Bill today will see the government make good on its plans to end final-salary schemes for hundreds of thousands of civil servants, and force employees to work longer in order to receive full pensions.
The government has pledged that public sector pensions will still be the ‘very best available'.
Changes to public sector pensions are set to save £65 billion of the £430 billion figure over the 50-year period. The government is hoping that the changes will reduce the burden of public sector pensions by half.
The Office of Budget Responsibility, which calculated the £430 billion figure, said most of the saving will come from changing the inflation link for public sector pensions, switching from the retail price index to the less generous consumer price index.
This will save the Treasury £250 billion in total, or £8.6 billion a year.
The new legislation will also end the generous ‘Great Office of State' pensions, which are given to future speakers of the House of Commons, the chancellor and prime minister.
Danny Alexander, chief secretary to the Treasury, said: ‘The bill is the final stage in delivering sustainable public service pensions.
‘It will cut the costs of taxpayers by nearly half, whilst ensuring that public sector workers, rightly, continue to receive pensions amongst the very best available. This is a good deal for taxpayers and a good deal for public service workers; a settlement for a generation.'
The publication of the bill comes just a day after the Trade Union Congress (TUC). It was here that unions threatened to strike again over a number of issues, of which pensions is one.
Mark Serwotka, general secretary of the Public and Commercial Services union, said: ‘We intend to fight this bill politically but we also believe that co-ordinated industrial action is still necessary on pensions as well as pay, and this should be held as soon as possible after the TUC demonstrations on 20 October.'
The unions have already called for an independent inquiry of plans to increase the state pension age to 68, and how it would affect people who did manual jobs and would not be able to work into old age.