The revised proposals from the government include three elements:

• First, a change to the accrual rate for the "reference scheme" from 1/65ths to 1/60ths. The accrual rate is the rate at which you build up your pension, so the lower this figure, the quicker the pension builds or accrues. This is potentially a significant step. The reference scheme is not the new scheme envisaged for the Civil Service. It is a benchmark scheme designed by the Treasury to allow the five public sector schemes (which have significant differences) to be compared on a like-for-like basis and to set the 'cost ceiling ' in each for the scheme-specific negotiations. The reduction proposed by the Government will increase the scope for agreeing a better quality scheme in the sector talks. Broadly speaking, this change has increased the cost envelope by 8%.

• Second, ministers have made provision for additional money to facilitate protection for those within 10 years of Normal Pension Age as at 1 April 2012. These people "will see no change in when they can retire nor any decrease in the pension they receive at their normal pension age." This is potentially significant as to date any 'protections' the unions have been able to negotiate have had to be found within the cost ceiling. Ministers say they are also open to discuss how this may be tapered for a further three or four years for those who are below the 10-year threshold on 1 April 2012.

• Third, subject to a deal being possible on linking pension scheme age to future changes in the statutory age of retirement, the government is prepared to give a commitment there should be no further changes to the schemes, including employee contribution rates, for the next 25 years.

However, the government is unwilling to move on the vital issues of:

• increased contribution rates

• the switch from the Retail Prices Index to the Consumer Prices Index for uprating pensions, which will have a dramatic and detrimental impact on the value of pensions. The outcome of Prospect's campaign against the CPI switch therefore hinges on the High Court decision over the unions' Judicial Review, heard in court over three days last week.

The implications for members in the health and local government pensions schemes are also, at this stage, unclear.

Other issues on which agreement has been reached in the national level talks are the need for transparency, equality impacts, participation rates and opt-outs, scheme governance and the principles on which the scheme-level discussions should be based.

The government has assured unions that it is not proposing any further increase in employee scheme contribution rates in addition to the 3.2% increase already announced.

The Treasury's proposed new cost ceilings for each of the main public sector pension schemes are set out below:

Pension Scheme	Gross cost ceiling	Taxpayers	Employees
NHS Pension Scheme (England and Wales)	21.9%	12.1%	9.8%
Principal Civil Service Pension Scheme	22.5%	16.9%	5.6%
Teachers Pension Scheme (England and Wales)	21.7%	12.1%	9.6%
Local Government Pension Scheme (England and Wales)	20.4%	10.9%	9.6%