That is, public sector workers who will greet with alarm his announcement that "We have got to end the apartheid" in pensions, by ending their final salary scheme:
We are getting into a situation now where pretty much everyone in the private sector has gone to defined contributions and the final salary schemes are closed. In the public sector you have still got a lot of people on final salary schemes including members of parliament.
MPs are going to have to lead by example. We have got to close the MP’s final salary scheme because we have got to be able to turn around to the rest of the public sector and say that over time it does makes sense to move towards defined contribution.
There is an issue of fairness between the private sector and the public sector but there is also an issue of economic efficiency. We do not want to make it so hard for people to move from the public sector to the private sector or from the private sector to the public sector.
My vision over time is to move increasingly towards defined contribution rather than final salary schemes.
This is something (sic) where the government has been remarkably feeble partly because they are in hock to the public sector unions.
Hat-tip to the FT.com Westminster blog, which comments on this here and here.
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