Public sector pensions require radical reform, says report
A report published by the independent Public Sector Pensions Commission is suggesting the Government needs to urgently review Britain’s public sector pension system.
According to the report, a radical reform is needed as public sector pensions cost double the amount previously thought.
The report said State pensions are “unreasonably forced on to future taxpayers” with Britain’s 30.6 million taxpayers forced to pay £586 each to pay the pensions of retired State workers this year.
The Commission’s chairman, Peter Tompkins, said it is unfair that British taxpayers were paying more into State pensions than their own.
During the current tax year, the cost of paying pensions to retired State workers will be £18 billion – a record amount.
Mr Tompkins comments: “Increasing longevity means that pension provision has to be looked at again, and the public sector cannot continue to remain immune.
“The question of why the majority of the workforce should be expected to pay through their taxes to support pensions that they cannot afford for themselves must be raised.
“As Greece has been experiencing, increases to retirement ages or cuts in benefits are not popular at the best of times, but implementing them as part of a package of crisis cuts is the least palatable option of all. It is essential that reforms are conducted early in a measured way rather than waiting until we have a crisis,” added Mr Tompkins.
According to the Commission, only half of the pension comes from contributions from workers (6%) and employers (14%).
Miles Templeman, director general of the Institute of Directors, adds: “This invaluable report reveals the real worth of public sector pensions and adds further weight to the argument that they need radical reform.”