Ministers have delayed Treasury plans to force public sector workers to contribute more to their pension pots.
The Treasury confirmed it would not implement a 3% increase in public staff pension contributions – which was due to include local government staff – in March, and instead could introduce the new requirement later this summer.
The proposed hike in contribution rates was announced by chancellor George Osborne last autumn, amid concern over the soaring cost of public sector pensions, and would raise an additional £1.8bn for the Treasury.
Lord Hutton, a former pensions secretary, could recommend an end to final salary pensions across the public sphere and their replacement with pensions based on career average salaries.
Trade unions are actively discussing the possibility of industrial action over public pensions should the coalition propose reforms they deem unacceptable. But Trades Union Congress general secretary Brendan Barber said he and other unionists would meet with ministers ‘over the next few months’ to discuss reforms.