Responding to today’s announcements on Public Sector Pensions Philip Booth, Editorial Director of the Institute of Economic Affairs, said:
“The government is following a dangerous path with Public Sector Pensions. By proposing that contributions should be varied between members on different levels of earnings it is trying to use an employee benefit as a social engineering tool. Furthermore, the government seems to be centralising the rules regarding public sector pension provision when there is an urgent need for all public sector pay bargaining to be localised.
“There is an urgent need to make the costs of public sector pensions more transparent and to reduce the costs and risks they impose on the next generation. Public sector pensions currently cost about 40% of salary – though most of that cost is brushed under the carpet and not revealed in public sector accounts. Employer contributions to private sector schemes average less than 10% of salary yet it is those private sector employers and employees who are paying the taxes to meet the cost of public sector schemes.”
NOTES TO EDITORS
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The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems. The IEA is a registered educational charity and independent of all political parties.