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Public sector pension funds need to be reformed

The chairman of the London Pension Funds Authority, the largest council pension fund in the UK, has today joined calls for the next government to introduce a wide ranging review of public sector pensions. This comes just ahead of next month's revaluation of council pension funds which is expected to show a deficit of around £70 billion!

It is believed that council pension funds are only two thirds funded leaving UK taxpayers to cover any deficit in the future. There are a number of options under consideration which include increased employee contributions, an increase in the retirement age and the repeal of regulations which automatically increase public sector pensions in line with the cost of living. The very fact that those within the council pension fund sector are calling for change is a sign that something needs to happen sooner rather than later.

It will be interesting to see how the issue of public sector pensions is addressed by the next government at a time when the public sector budget is likely to be slashed which could place further pressure on future pension funding. We are fast approaching crunch time for UK public sector pensions with taxpayers becoming more agitated at their increasing liabilities and unions determined to protect the interests of their public sector members.

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