CBI calls for public sector pensions shake-up
Business group, the Confederation of British Industry (CBI), is calling for an overhaul of public sector pensions as concerns over the affordability of pensions for workers in the state sector, including nurses, teachers and the police, is growing.
The CBI is urging the next Government to establish an independent commission within weeks of being elected to review the pensions paid to civil servants.
According to the CBI, the liabilities linked to civil servants’ pension funds will reach £1 trillion at the end of the first quarter.
A report, titled ‘Getting A Grip: The Route To Reform Of Public Sector Pensions‘, claims public sector pension benefits were on average worth 26% of salary every year – much higher than private sector averages, and the total cost will increase as people lived longer.
CBI deputy director-general, John Cridland, comments: “This is a difficult and emotive area, and not one that should be rushed. Public sector workers deserve a good retirement, but they and their employers should pay their own way. The pensions black hole is over one trillion pounds and rising, and taxpayers cannot be left to make up the difference.”
The National Audit Office recently suggested that the amount of money paid as pensions to many such workers could more than treble in the next 50 years.
A Treasury spokesman said: “The government has set out substantive reforms to ensure the sustainability of public sector pensions. These include raising the retirement age.”
Meanwhile, shadow chief secretary to the Treasury, Philip Hammond, said: “It is already widely accepted that reform is needed and we will work to achieve consensus to move forward.”