© ReutersProposals: Chancellor George Osborne will publish plans that could see public sector workers transferred to less generous pensions
Public sector workers could see their 'gold-plated' pensions slashed to make it easier to transfer services to private firms and charities.

Payments due to hundreds of thousands of nurses, doctors and bin collectors could be cut to less than half under proposals being considered by the Treasury.

The Government wants providers other than the State to take over the running of some services as part of David Cameron's 'Big Society' plan.

But ministers fear the generous final salary schemes paid out to public sector workers would deter all but the biggest firms from doing so.

Last night unions said the proposal was 'extremely provocative' and could lead to a fresh round of strikes if enacted.

Public sector workers have their pensions protected, even if another provider takes over the service, under 'fair deal' rules agreed by Labour in the late 1990s.

But Government sources said these were merely guidelines, and it would not require legislation to tear them

The plans would allow a new employer to transfer public sector staff to a less generous contributory scheme where they pay into a pot with no final guarantees.

The proposal - suggested by former Labour work and pensions secretary Lord Hutton - is contained in a consultation document to be published by George Osborne next month.

The change would mean a nurse with a final salary of £40,000 could see their pension slashed from £20,000 a year after 30 years' service to £6,000.
© UnknownLosing out: Bin men could see their £10,00 pensions cut to £3,249

Teachers retiring on a final salary of £50,000, who would normally receive a pension of £25,000, would see this whittled down to little more than £7,000.

Doctors can qualify for pensions of around £50,000. But transferring into a new private pension scheme could leave them with just £11,403 a year in retirement.

Those on the lowest salaries, such as refuse collectors, could see their £10,000 pensions cut to £3,249.

Critics have pointed out that the changes could still cost the State, because many public sector workers would have to rely on benefit payments to top up their pensions.

Unions are already threatening to strike over plans to make members contribute more towards pensions.

Unite assistant general secretary Gail Cartmail said yesterday: 'Scrapping these protections would be extremely provocative and would cause a crisis of confidence among public sector workers who are already feeling the pain of the Government's cuts.

'The fact that some companies are unwilling to pay decent pensions is proof they have no right to take over public services.'

A spokesman for the Public and Commercial Services Union said: 'The average pension for our members is already low, at just over £4,000 a year. We would be very concerned by anything that puts at risk even this meagre reward for their loyal service.'

A Treasury spokesman said the reform was one of several options which would be put out to consultation for at least three months before any decisions are reached.