FDA rejects pensions cap as 'lacking financial logic'

5 September 2009

For immediate release

Responding to comments made this morning on BBC Breakfast by Terry Rooney MP, chair of the Work and Pensions Select Committee, about imposing a cap on public sector pensions, the FDA has said "there is no financial logic in moving in this direction". The FDA is the union for senior managers and professionals in public service.

FDA general secretary Jonathan Baume said:

"I am genuinely puzzled by these comments. I do not accept that there is a problem with sustaining public sector pensions. The real crisis is the cutting away of pension provision in the private sector. As PricewaterhouseCoopers and others have pointed out, what is urgently needed is employers - and the Government - to rebuild trust in pensions across the whole economy.

"There is no doubt that civil servants accept lower salaries in the knowledge that they have an entitlement to a stable pension. Civil servants build this into career choices they make and the employment contracts they enter into.

"It is also a fact that defined benefit schemes cost similar amounts, whether in the public or private sector.

"There is no logic in placing an arbitrary cap on pension benefits, which would equally hit a very small number of civil servants, hospital consultants and some teachers."

Notes for editors

1. The FDA is the trade union and professional body representing 18,000 of the UK's senior civil and public servants. Our members include policy advisors, senior managers, tax inspectors, economists, statisticians, accountants, special advisers, government lawyers, diplomats, crown prosecutors and NHS managers.

2. Members in HMRC are represented by the Association of Revenue and Customs (ARC), a section of the FDA.

3. The FDA (formerly the First Division Association) should be referred to simply as "The FDA" and can be described as "the senior public servants' union".

4. For further information contact:

Jonathan Baume, General Secretary, tel: 020 7401 5555 or 07976 951191.

Oliver Rowe, Communications Officer, tel: 020 7401 5588 or 07590 838696.