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UK public sector pensions more expensive than US counterparts

A report by the renowned British-North American Committee has today cast a significant shadow over UK public sector pensions which it claims are more expensive than their US counterparts. The report concludes that the unfunded pension liability for public sector workers in the UK amounts to a massive 85% of annual GDP against just 28% in the US and 27% in Canada. This unfunded situation will only get worse unless the UK authorities take time out to look to the future and the ever-growing liability handed over to UK taxpayers.

The report suggests that tax income from UK residents not even born yet have already been assigned to cover his growing burden on the UK economy. While the figures are refuted by the UK government the report suggests that official funding figures are using rates which are 50% below the market rate and therefore give an unrealistic impression.

Whether the figures are quite as bad as this particular report suggests is open to debate but one thing is for sure, the UK taxpayer is paying more and more money into the ever-growing number of public sector pension schemes which are final salary arrangements. Final salary arrangements are less commonplace in the private sector yet more and more people continue to join the schemes in the public sector. This is a pension nightmare waiting to happen!

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