Public Sector Pensions: CBI Demands Inquiry
Public sector pensions are again in the media spotlight not only because of the
overpayment of pensions that recently hit the headlines but also because the CBI
are calling for an independent commission into public sector pensions due to fast
increasing cost burden on taxpayers.
Public sector pensions, which on average have a 19% employer contribution and operate
on a final salary basis, far exceed the private sector pension position. With an
increasing number of people, being able to access public sector pensions and increased
life expectancy, the cost to the taxpayer for such pensions to continue will dramatically
increase.
The CBI has stated that a £1trillion bill has been run up, and has called for an
examination of the costs, financial rules and level of tax subsidy required to support
these pensions particularly in light of the poor investment performance by the funds.
The growing chasm between public and private sector pensions has been at the centre
of a great deal of debate in recent years with private firms reforming pension schemes
and increasing employee contributions, yet still facing deficit due to stock market
falls.
While the trade unions believe such public sector pensions necessary to recognise
the contribution of public servants, the ever growing tax bill and divide between
public and private pensions means a review of the pensions position going forward
is likely, although a solution to the problem is not going to be easily found. |
For More Information Contact:
Tarmina Dent
TPP Law Limited
53 Great Suffolk Street
London SE1 ODB
t 020 7620 0888
f 020 7620 0778
e info@tpplaw.co.uk
Email:
Tarmina
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