Reform UK is set to unveil plans to close defined benefit pension schemes to new local Government employees, with the party proposing to consolidate almost 100 separate funds into a £500billion British Sovereign Wealth Fund.
Richard Tice, who would lead Reform’s proposed Department of Business Trade and Energy if the party wins the next General Election, will outline the policy during a speech in Birmingham today.
The party is expected to claim the merged fund would channel an additional £100billion into British businesses, housing, and infrastructure projects.
Alongside the pension overhaul, Mr Tice is expected to announce that Reform would abandon the Government’s environmental targets and remove recently introduced employment protections covering sick pay and unfair dismissal.
Reform UK is planning big changes to the pension system
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The Labour Government has responded by accusing the party of having “formally declared war on British workers”.
Currently, nearly 100 defined benefit schemes exist across the UK, covering more than seven million members and pensioners with combined assets exceeding £400billion.
Under Reform’s proposals, new council employees would be enrolled into defined contribution arrangements instead, mirroring standard private sector practice.
These alternative schemes offer no guaranteed retirement income, with payouts determined by contributions and market performance.
Nigel Farage would sign off on a number of law changes | NIGEL FARAGE/X
Richard Tice will outline his plan for the economy in a speech later today
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GETTYThe party intends to compel existing pension funds to direct a significantly greater proportion of their assets towards domestic investments.
Reform wants 25 per cent of the new fund allocated to UK shares, which it says would deliver £100billion in additional investment in British listed companies.
UK pension fund investment in domestic companies has plummeted from approximately 40 per cent two decades ago to below four per cent as of today.
When Reform first floated the pension changes last November, the Prospect union described them as “a baseless attack on public servants” that would “only worsen the current recruitment and retention crisis in our public services, and would plunge the services people rely on into staffing chaos”.
Council pensions will overhauled under the changes
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GETTYUnison’s assistant general secretary Jon Richards argued that Reform’s leadership does not represent working people’s interests.
He explained: “Forcing council staff on to inferior pensions would leave retired workers poorer and worsen an already severe recruitment crisis for local Government.”
Speaking to the BBC, pensions expert John Ralfe dismissed comparisons with sovereign wealth funds in Norway and Gulf states.
Mr Ralfe shared: “”Reform forgets that local Government pension schemes have made promises to members to pay guaranteed inflation-linked pensions over many years. That’s a crucial difference with other sovereign wealth funds, which have no promises to pay.”
Mr Tice is scheduled to deliver the party’s economic reforms during a speech in Birmingham later this morning.