Teachers are on strike today. One of the reasons is their anger over pension entitlements becoming less generous after reforms become effective in April 2015. These reforms don’t much affect the rights to pensions they’ve built up already. The changes are primarily about what additional pension rights they’ll be entitled to thereafter.
But there’s a huge problem with the cost of these pensions. As the unions fight for more generous terms and the Government decides how much of the next generation’s money it is prepared to promise them, they aren’t recognising the true scale of how much those promises will cost. Continue Reading
We can today reveal that the true scale of the liability facing taxpayers for unfunded public sector pension schemes stands at an eye-watering £1.7 trillion. This dwarfs official estimates of £1.1 trillion, and these numbers are in addition to the official National Debt.
The official National Debt is around £1.2 trillion. But that doesn’t include liabilities for public sector pensions, which are kept off the books. Unlike private sector and local government pension plans, no funds are saved to meet the expected pension payments when they become due. The bill is simply left for future taxpayers to pay.
Politicians must urgently confront the enormous debt mountain that has built up thanks to overly-generous but completely unfunded public sector pensions, the campaign group says. Failure to give taxpayers a better deal will leave our children and grandchildren with a frightening bill to pay for today’s public sector staff.
The Government’s estimate of the size of this shortfall is also not calculated in the same way as the private sector must calculate its liabilities. Both the Government and the private sector reduce the expected payments in future years by a ‘discount rate’, to account for the fact that money held now to pay for a commitment in the future should grow.
But these discount rates are not the same. Instead of using the market discount rates, the Government uses a more generous rate determined by a committee.
Pensions liabilities and finance expert Neil Record has calculated that:
Pont Briwet, a Grade II listed wooden bridge which crosses the River Dwyryd in Penrhyndeudraeth North Wales, has been closed since January due to safety fears. This is understandable – many of us have endured a difficult winter. This bridge was to be used until a new road and rail crossing costing £20 million which is completed in 2015. Continue Reading
Does Bristol City Council (BCC) really need 70 elected councillors to serve its citizens? As a resident of the city and a one-time councillor, I can say this is one way of cutting the cost of local government—reduce the number of councillors—and the TPA in Bristol is campaigning to get the numbers cut. On Saturday, we brought the War on Waste message to Bristol City Hall and gathered on College Green with our banners. Continue Reading