The great pension debate goes on

The release of Lord Hutton's public sector pension review has certainly caught the eye of the financial press over the last few days. Despite the fact that unions are adamant that pensions in the public sector should remain as they are the truth is that as they stand at the moment they are untenable going forward. There is no way that UK taxpayers can afford to fund in excess of £10 billion a year in pension fund contributions for those working in the public sector by 2015.

So in reality, despite friction from both camps regarding pro-pension cuts and anti-pension cuts we will see changes in the public sector pension setup. Taxpayers are now becoming more and more interested in how their money is being spent and the debate as to whether taxpayers are receiving value for money, with more and more tax income going towards pension fund deficits in the public sector, is becoming something of a hot potato.

If private sector pension arrangements were similar to that in the public sector, i.e. based upon final salary, then perhaps we would not have this debate but the demise of the final salary pension scheme in the private sector has brought about this review by Lord Hutton.