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Hutton looks for immediate savings

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Pension commissioner John Hutton has been tasked with finding ways to cut the pensions bill within the next three years.

The former Labour minister who is examining the affordability of public sector pensions has asked stakeholders for suggestions of how money could be saved within the spending review period, as well as views on longer-term reforms.

In a letter sent to stakeholders and published online this week, former Labour minister Mr Hutton explained that he had been given the “significant task” of supplying an interim report in time for the spending review in October and asked for evidence to be submitted before the end of July.

As well as calling for views on long-term structural reforms, Mr Hutton said he wanted suggestions of immediate savings that could be made within the three-year period of the next spending review.

“I would welcome any thoughts or observations on whether given the long term nature of structural reform there is a case for more immediate action on public service pensions, in the context of affordability and fairness, and if so, what options there might be to deliver savings within the spending review period,” he wrote.

As well as setting out immediate savings, the interim report would “set the framework for any change” and he has requested evidence and views on “affordability, fairness, impact on mobility and plurality”.

One of the options that he is likely to consider is a single set of terms and conditions for public sector pensions, which would make mergers and reorganisations within the public sector a lot simple. Changes to retirement ages, accrual rates, contribution rates and benefits calculation are all set to be examined as well.

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