New TPA research reveals that there are more former civil servants drawing a pension than paying in

November 28, 2011 7:08 AM


- Excluding the NHS, there are more public sector workers drawing a pension than there are working and paying in
- Public sector pensions are unsustainable. Trade Unionists should go for reform, not strikes


The TaxPayers' Alliance has today revealed that the number of retirees across the public sector is fast catching up with the number of active members in unfunded public sector pension schemes. Excluding the NHS, there are more public sector workers drawing a pension than there are working and paying in.


With the high number of deferred members – those no longer paying in and owed a pension but who haven’t started drawing it yet – this problem is set to get far worse fast.





Click here to read the full report


 


On Wednesday (30 November) public sector workers will take part in one of the biggest strikes ever seen in the UK. The walk-out is over pension reform, with unions unwilling to accept changes like increased employee contributions. But failure to reform public sector pensions would be unfair on taxpayers. We have an ageing population and final salary schemes mean taxpayers are funding more expensive deals for much longer. It may even be possible for some public sector retirees to draw a pension for longer than they paid into it.


The key findings of this report are:




  • The Civil Service pension scheme has more people drawing a pension than it has active members.



  • Excluding the NHS pension scheme, there are more people drawing an unfunded public sector pension than there are active members.



  • For every five active members of unfunded public sector pension schemes, there are four people drawing their pension.



  • Already, ‘pensions in payment’ for unfunded public sector schemes (£25.9 billion) are considerably more than employee and employer (taxpayer) contributions combined (£21.4 billion).  When the number of retirees outstrips active members, this gap will increase still further. Since 2006-07, the gap has increased from £1 billion to £4.5 billion – without reform, it will get bigger.



  • There are over 1.7 million deferred members of unfunded public sector pension schemes. As more of these members begin drawing their pension, the gap between those drawing their pensions and active members will close more quickly.


Click here to read the full report


Matthew Sinclair, Director of the TaxPayers' Alliance, said:


“Public sector pensions in their current form are unfair on taxpayers. Pay-outs for unfunded schemes have increased and are projected to go up even more over the coming years, meaning expensive problems now and huge liabilities for the near future. It won’t be long before the number of retirees outstrips the number of active members and this will be extremely tough on ordinary families who are struggling to save for their own retirement, let alone pay higher taxes for pension schemes they could never afford. The Government must face down the unions and push ahead with pension reforms, so taxpayers are not forced to guarantee unaffordable and overly-generous final salary deals."




- Excluding the NHS, there are more public sector workers drawing a pension than there are working and paying in
- Public sector pensions are unsustainable. Trade Unionists should go for reform, not strikes


The TaxPayers' Alliance has today revealed that the number of retirees across the public sector is fast catching up with the number of active members in unfunded public sector pension schemes. Excluding the NHS, there are more public sector workers drawing a pension than there are working and paying in.


With the high number of deferred members – those no longer paying in and owed a pension but who haven’t started drawing it yet – this problem is set to get far worse fast.





Click here to read the full report


 


On Wednesday (30 November) public sector workers will take part in one of the biggest strikes ever seen in the UK. The walk-out is over pension reform, with unions unwilling to accept changes like increased employee contributions. But failure to reform public sector pensions would be unfair on taxpayers. We have an ageing population and final salary schemes mean taxpayers are funding more expensive deals for much longer. It may even be possible for some public sector retirees to draw a pension for longer than they paid into it.


The key findings of this report are:




  • The Civil Service pension scheme has more people drawing a pension than it has active members.



  • Excluding the NHS pension scheme, there are more people drawing an unfunded public sector pension than there are active members.



  • For every five active members of unfunded public sector pension schemes, there are four people drawing their pension.



  • Already, ‘pensions in payment’ for unfunded public sector schemes (£25.9 billion) are considerably more than employee and employer (taxpayer) contributions combined (£21.4 billion).  When the number of retirees outstrips active members, this gap will increase still further. Since 2006-07, the gap has increased from £1 billion to £4.5 billion – without reform, it will get bigger.



  • There are over 1.7 million deferred members of unfunded public sector pension schemes. As more of these members begin drawing their pension, the gap between those drawing their pensions and active members will close more quickly.


Click here to read the full report


Matthew Sinclair, Director of the TaxPayers' Alliance, said:


“Public sector pensions in their current form are unfair on taxpayers. Pay-outs for unfunded schemes have increased and are projected to go up even more over the coming years, meaning expensive problems now and huge liabilities for the near future. It won’t be long before the number of retirees outstrips the number of active members and this will be extremely tough on ordinary families who are struggling to save for their own retirement, let alone pay higher taxes for pension schemes they could never afford. The Government must face down the unions and push ahead with pension reforms, so taxpayers are not forced to guarantee unaffordable and overly-generous final salary deals."



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