Actuaries claim public sector workers will gain from the abolition of contracting out but unions contend it could derail public sector scheme reform.
Yesterday the government published its state pension reform white paper, in which it confirmed that contracting out will be banned from 2017.
Unions said the reform would hit public sector schemes, which are contracted out.
Trades Union Congress (TUC) general secretary Frances O'Grady said: "We are extremely concerned at the impact on public sector employers who will face a 3.4% increase in National Insurance contributions (NICs).
"Unless public sector employers are compensated for this, it will lead to big cuts across public services."
However, Buck's senior corporate consulting actuary Colin Richardson said that public sector workers will gain from the subsequent requirement to pay full NICs, because, unlike in the private sector, employers will not be able to mitigate the increased cost by cutting scheme benefits.
"Employees in public sector schemes will pay full NI, so workers will pay 1.4% more NI on relevant earnings, but there will be no change to their benefits because those have already been agreed during the public sector reform negotiations," said Richardson.
He added: "With the additional employer NICs, public sector workers will receive total combined benefits of at least 4.8% more value because they will get more from the state scheme."
Richardson said the NIC rebate calculated for DB schemes was regularly underestimated, so the 4.8% increase could actually be worth 5-6% in real terms.
"Furthermore, the state scheme increase post-2017 is a flat-rate increase so this represents an even higher percentage increase for lower paid public sector employees and still a substantial one for the higher paid. Therefore, the public sector unions should be especially pleased," Richardson said.
Hymans Robertson partner Martin Potter agreed.
"The five million public sector workers are clear winners," he said.
"They will get to keep their defined benefit schemes unchanged and get the extra state pension. How public sector employers will pay the extra NI payments remains to be seen, given they won't have budgets for this."
However, although the Department for Communities and Local Government has already agreed with unions the reforms of the schemes for teachers, police, firefighters and civil servants as part of the Public Service Pension Bill, the reform of the local government pension scheme is not included in the legislation.
LGPS reform is being legislated for under the Pensions Act 2004, and it has yet to make it into the statute books.
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