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Should public sector workers contribute to their pension shortfalls?

It is common knowledge that the public sector still has the most lucrative pension arrangements in the UK which are funded by the UK taxpayer. Year-on-year we hear of deficits in the public sector pension funds which are made up by injecting taxpayer's money into the system in order to fund future pension liabilities. However, the Times newspaper has today suggested that public sector workers should be expected to contribute to any potential funding shortfalls in their pension fund arrangements.

A conservative estimate of pension fund deficits in the UK public sector is around £60 billion and the Times seems to have inside knowledge of a plan by the UK government to attack this deficit. It seems that the government is set to break ranks with the unions and reorganise public sector pension arrangements which could see public sector workers asked to increase their own contributions to the fund. There is a feeling that due to underperformance by investment funds the £60 billion deficit could move yet higher in the short to medium term and no increase in council taxes will make a dent in the figure!

Finally, ahead of the next general election, it seems that the UK government is prepared to look at public sector gold-plated pension schemes and try to reduce the growing liabilities being pinned onto the backs of taxpayers.

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