A comprehensive report by an independent commission chaired by leading actuary Peter Tompkins will be released today. The membership also includes Ros Altmann, a former Tony Blair advisor. The Public Sector Pensions Commission was set up last year by the Institute of Economic Affairs, Institute of Directors and other groups which were frustrated by the past efforts of public sector pensions reform.
The Commission promised to “improve transparency”. In doing so the report due out today is expected to show that former government reports made pension costs appear one half as expensive as they really are. Since 2001 the official cost report has listed the cost at 15 billion pounds a year, while the real cost was 30 billion. This is 150 billion pounds for taxpayer liabilities swept under in the last ten years.
The Commission wants urgent reform. As things stand the forecasted amount reports that taxpayers will need to find 18 billion pounds or 700 per household by 2011, but in actuality the total cost is 35 billion pounds a year.
“Increasing longevity means the pension provision has to be looked at again, and the public sector cannot continue to remain immune,” said Tompkins.
“The question of why the majority of the work force should be expected to pay through their taxes to support pensions that they cannot afford for themselves must be raised,” he added.
The Commission is making recommendations to reform the public sector pensions, but not to benefits that are already accrued.