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More transparency needed on public sector pensions, claims expert
11 September 2008 11:50
An independent policy advisor has accused the government of unfairly providing public sector workers with far better pensions than their counterparts in the private sector enjoy.
According to Dr Ros Altman's data, nine out of ten public sector employees are in final salary schemes, compared to just one in seven private sector staff, as well as enjoying a pension accrual of £150 a week - five times higher than that obtained by other workers.
Moreover, with 3.4 million public sector workers contracting out of their second state pension, this group typically pay out just 9.1 per cent of their salaries in national insurance contributions, whereas other workers pay out 11 per cent on average.
Dr Altman therefore lambasted the decision to give public sector employees the ability to contract out, asserting that abolishing this provision would bring the government an extra £10 billion in revenue every year.
She also criticised the government's failure to disclose the costs of funding these workers' pensions, which are available to them from the age of 60 and are fully inflation-proof and taxpayer-guaranteed, calling for an independent inquiry into this state of affairs.
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