Jun
29Should public sector pensions be cut?
Tagged Under : Sector, Sector Pensions
It is believed that UK taxpayers have an ongoing pension liability for the overall UK public services sector of well over £1 trillion with some suggestions the figure could be as high as £2 trillion. These are liabilities which have built up over the years in the many final salary taxpayer-funded pension schemes in the public sector, at a time when final salary schemes have become very scarce in the private sector. So is the UK government right to tackle the issue and reduce taxpayer liabilities?
The truth is that if you work in the public sector, with a very attractive pension arrangement, there is nobody who would be willing to give this up without a fight. We all plan for the future, we all plan for retirement and to suddenly have the “goalposts moved” is not something any of us would welcome. While the government is unlikely to be able to introduce retrospective changes to the pension arrangements in the public sector we are likely to see a cap on pensionable salaries as well as an increase in member contributions.
Whether this will be enough to realign the liabilities currently in place remains to be seen but David Cameron is unlikely to force through these changes without a battle with the public sector workforce and the unions.
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