Will the unions sit back and let David Cameron amend public sector pension schemes?
The BBC has today announced plans to close its final salary pension scheme to new entrants and also limit pensionable salary increases to no more than 1% a year. This is the first major public sector operation to announce such a move and many believe that David Cameron will use this as a launchpad to attack public sector pensions which have built up massive deficits which UK taxpayers will need to cover.
It is estimated that final salary pension scheme liabilities in the public sector amount to upwards of £1 trillion and the situation could become much worse before it gets better. Unless the UK government is able to attack this particular area of public funding, and either limit pensionable salaries upon retirement or force members to contribute to the scheme, the £1 trillion deficit at the moment could seem like chicken feed in years to come!
There is no way that the UK unions will allow David Cameron to walk all over the UK pension system in the private sector and we can expect significant friction in the short to medium term. Whether the battles between the government and the unions will be on a par the 1980s and Margaret Thatcher's hardline approach remains to be seen but there is no doubt further conflict and further disputes will be announced in due course.
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...Read More
Pensions under attack
On Thursday the 30th June 2011, the British government will face the biggest outbreak of industrial action since it came to power as civil servants join teachers and lecturers in a major strike over pension reforms.
The Tory-led coalition wants to alter the pension age, change the way that pensions are calculated and increase worker's contributions
Over 750,000 public sector wor...Read More
How did the public sector pension liability grow so large?
There are many different forecasts regarding the potential liability that UK taxpayers have towards public sector pension schemes but one thing appears certain, the liability is in the billions of pounds and will likely grow in the longer-term. We are now looking at a situation whereby local authority taxes and nationwide taxes are being used more and more to fund pension fund liabilities thereby...Read More
The ticking time-bomb that is public sector pensions
The Taxpayers Alliance (TPA) has today issued a damning report on public sector pension schemes in the UK with local government pension funding estimated to have a shortfall of around £53 billion. The figure for the 2008/09 tax year sees more than 15 councils with a deficit of over £500 million each which will be funded by UK taxpayers in due course. The figure of £53 billion is an increase...Read More
Pensions nightmare awaits millions in UK
A series of authoritative reports in UK have cast serious doubts on the potential for the UK pensions sector to deliver in the future. It was also revealed that the gap between private sector pensions and public sector pensions is larger now than it ever has been with those in final salary schemes guaranteed a set pension paid for by the taxpayer. The significant reduction in investment returns ov...Read More