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Resistance to reform stems in large part from misunderstanding of effect of the changes on workers
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Better communication is urgently needed otherwise reforms are at risk of failure
Key findings of Hymans Robertson's research among public sector workers:
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Workers are resistant to pension reform - only 11% accept the changes and 1 in 3 don't believe the reforms will work
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Much of this resistance stems from a lack of understanding - 1 in 3 have not heard of Hutton's review of public sector pensions and three quarters don't even know how the changes will affect them. There are some serious misconceptions at play.
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Only 3% understand that they will continue to get a defined benefit pension in the future and 1 in 10 think that they will lose what they have earned in their pension so far (despite accrued rights being protected).
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Although a career average scheme is fairer, less than 2 out of 10 prefer career average; 7 out of 10 still prefer final salary. There is an urgent need for good communication with members to address misconceptions, reduce anxiety and lower the risk of reforms failing
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Some messages are getting through, but it doesn't mean people accept the changes: 78% understand that they will have to work for longer
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The majority do understand that change is needed and why - 52% accept society can't afford to pay public sector pensions for a longer period, compared to just 19% who disagree
Research among public sector workers by Hymans Robertson, the independent pensions & benefits consultants, has found there remains a lot of resistance to pension reforms, despite an understanding that the status quo cannot be maintained because of affordability and increasing longevity.
Despite this opposition, the research also reveals that much of this resistance stems from a lack of understanding about the reforms and what they will mean for scheme members. These misconceptions, along with the reaction to the scale of proposed contribution increases, risk derailing much needed long term reforms.
Good communication could reduce the anxiety and confusion being felt by workers, lessen resistance to change and help achieve wider support and acceptance of the changes needed. This will reduce the risk of the reforms failing.
John Wright, Head of Public Sector Pensions at Hymans Robertson, said:
"At present there is great confusion surrounding pension reforms amongst public sector workers. It is particularly concerning to see so few recognise the value of a career average pension, and that one in ten believes that they will lose any pension already accrued, despite the Government's reassurance on this point.
"These types of misconception are driving much of the resistance to change that we are seeing, and demonstrate the urgent need for good communication with scheme members. Without this there is a real risk reform will fail.
"Public sector workers do appear to accept the rationale for change - that as a society we are living longer, which carries with it a greater cost of pension provision as time spent in retirement increases. If people understand what the changes are and why they are needed, it is more likely that reform will succeed. More needs to be done to explain why the changes are needed and how they will affect people."
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