Total Reward and Pensions in the UK by Occupation in the Public and Private Sectors
Over the last 10 years the relative value of public and private sector remuneration packages, including pensions, has changed markedly. This report reviews a comprehensive measure of Total Reward (TR) which includes not just pay, but pensions and other ‘benefits in kind’, evaluates it as the present value of the sum of all these payments over the lifetime and sets out how to compare it for UK public and private sectors workers in different occupations. We suggest that the current controversy over public-private sector pension differentials and the perennial issues of public/private sector pay gaps requires a life time perspective and that the concept of TR is appropriate. Changes have been implemented to pension schemes across the UK public sector from 2014/15 moving from Final Salary to Career Average schemes. This report sets out how it is possible to simulate how these changes will affect the lifetime TR and how the recent pension changes compare across different public sector schemes. Specifically, we simulate the occupation specific pension wealth accumulated for a representative employee over the lifecycle by examining how the move from Final Salary schemes to Career Average schemes has affected: Doctors, Nurses, Teachers, Prison Officers, Police Officers and Firefighters.