Defuse pensions time bomb, warns employers' group
UK - The Confederation of British Industry (CBI) has called for an independent commission to analyse the assumptions and the ballooning real cost of public sector pensions.
An independent commission could then lead to a public pension reform, in which retirement age for many public sector workers would be increased from 60 to 65 and employee contributions would be raised to levels "that more realistically reflect the true costs of their pension provision".
CBI said it believes indexation and assumptions about mortality should be brought into line with private sector practice, as it claimed many state schemes use outdated assumptions about mortality which presume state workers will die earlier than private sector counterparts.
"Public sector workers should have a good retirement, but we need to talk openly about how we split the bill," said John Cridland, deputy director-general at the CBI.
The debt being racked up is "truly eye watering" and set to get worse, according to Cridland, as the CBI estimates public sector schemes have liabilities of over £925bn (€1.02bn).
But Mark Serwotka, general secretary of the Public and Commercial Services Union, commented in a statement: "Because of low pay, which means 25% of the civil service earns less than £16,000 annually, many of our members will retire with pensions worth less than £4,000 a year. These are not the gold-plated pensions some would have us believe exist in the public sector."
He added it was "completely unacceptable" to attempt to undermine the public sector provision.
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