Who Wins? Evaluating the Impact of UK Public Sector Pension Scheme Reforms

24 Pages Posted: 1 Jun 2016

See all articles by Alexander M. Danzer

Alexander M. Danzer

Ludwig Maximilian University of Munich (LMU) - Faculty of Economics; IZA Institute of Labor Economics

Peter Dolton

University of London - Institute of Education; IZA Institute of Labor Economics

Chiara Rosazza Bondibene

University of London - School of Economics & Finance

Abstract

Radical changes have been implemented to pension schemes across the UK public sector from April 2015. This paper simulates how these changes will affect the lifetime pension and how the negotiated pension changes compare across six public sector schemes by level of education. Specifically, we simulate the occupation specific Defined Benefit (DB) pension wealth accumulated for a representative employee over the lifecycle by factoring in the recent changes to pension conditions. We find that less educated workers with low or moderate earnings in the NHS, Local Government and Civil Service schemes are the winners having secured an increase in the value of their pension of between 10-20%. Graduate workers with faster wage growth in the Civil Service, Teachers and Local Government schemes loose between 3% and 5%. This is in sharp contrast with the Police and Fire forces who have lost around 40% irrespective of their education.

Keywords: pension reforms, public sector, defined benefit

JEL Classification: J32, H55, J45

Suggested Citation

Danzer, Alexander M. and Dolton, Peter and Bondibene, Chiara Rosazza, Who Wins? Evaluating the Impact of UK Public Sector Pension Scheme Reforms. IZA Discussion Paper No. 9936, Available at SSRN: https://ssrn.com/abstract=2786020 or http://dx.doi.org/10.2139/ssrn.2786020

Alexander M. Danzer (Contact Author)

Ludwig Maximilian University of Munich (LMU) - Faculty of Economics ( email )

Ludwigstrasse 28
Munich, D-80539
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Peter Dolton

University of London - Institute of Education ( email )

20 Bedford Way
London, WC1H 0AL
United Kingdom
+44 (0)207 612 6395 (Phone)
+44 (0)207 612 6880 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Chiara Rosazza Bondibene

University of London - School of Economics & Finance ( email )

Mile End Road
London, SE9 2ZP
United Kingdom

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
55
Abstract Views
545
Rank
670,520
PlumX Metrics