A Local Government Group has suggested a new plan that could save the coalition £900 million a year from public sector pensions.
The group have written to Eric Pickles, the Communities Secretary, with their proposals and he is said to be carefully considering the plan. 
The plan simply suggests that public sector workers could either pay the increased rates, as suggested by the Government, in two years times to keep their benefits or they could continue to pay the same rate as they do now but take a smaller pension once they retire.
The public sector trade unions however, have already decided against the suggestions and have said that they will still go ahead with ballots for industrial action over pensions on the 30th November.
This latest proposal could affect up to two million public sector employees and could save the Government £900 million a year by 2014-15. The plan would also mean that fewer workers would be likely to opt out of their pension schemes.
The letter to Eric Pickles says that its suggestion “delivers the required level of savings, other than wholly through an increase in employee contributions, minimises the impact on the lower-paid and offers choice to individuals.”
Along with the choice of contribution rate to pay, the plan also suggests that the pension age be increased from 65 to 66 from April 2014. This would save £300 million a year, the local government group claim. The other £600 million would be raised by the scheduled increase in contribution rates with the lower-paid still being protected.
The new plan would ensure that no public sector worker would have to pay an increased contribution rate for at least two years, and that they would have the option of whether they wanted to reduce their pension benefits rather than pay a higher rate.
The Department for Communities and Local Government is said to be making its decision as to whether to adopt these suggestions, or forge ahead with its own plans for private sector pensions at the end of September.
A spokesperson for the department said: “This is a genuine consultation to which we are committed in order to try and agree a way forward with the unions and employers,”
“Public service pensions will still be among the very best, with a guaranteed pension, but we must ensure that they remain affordable in the future and deliver better value for the taxpayer.”
Unions have dismissed the suggestions, with the GMB stating that the plans had “significant problems” and Unison saying that it could not “sign up to these plans, which are proposed to raise nothing more than a £900m ‘tax’ on local government pension scheme members for the government in the short term”.
The General Secretary for the TUC, Brendan Barbar, said in a BBC interview that as yet there had been no “dramatic change” and that the unions and the Government were still “a long way apart” on the matter of public sector pensions.
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