TaxPayers' Alliance respond to Hutton Commission recommendations

October 07, 2010 2:06 PM

The TaxPayers' Alliance (TPA) today welcomed the Hutton Commission's recommendations to reduce the cost of public sector pensions, and urged the Government to implement them as soon as possible.

In a series of reports (How to save £50 billion, September 2009; How to Cut Public Spending, March 2010) and a submission to the Commission, the TPA has recommended increasing employee contribution rates to public sector pensions. The TPA has also called for a switch towards defined contribution pensions in the public sector.

Increasing employee contributions to all unfunded public sector pension schemes by a third could save £2.5 billion. That would only raise the typical contribution rates from 6 to 8 per cent of salary.

The TPA has produced a range of research on public and private sector pensions, findings include:




  • Occupational pension schemes have lost between £150 and £225 billion in growth, at least, as a result of the abolition of ACT relief on pension funds in the 1990s, even before the financial crisis.




Emma Boon, Campaign Manager at the TaxPayers' Alliance, said:

"Taxpayers face a bill for more than a trillion pounds needed to pay unfunded public sector pensions. We welcome this morning's recommendation from Lord Hutton, the Government should increase employee contributions and raise the pension age to make much needed immediate savings. Final salary pension schemes are all but extinct in the private sector, but necessary changes in gold-plated public sector pensions haven't been made. It is not right for taxpayers to be subsidising million pound retirement benefits for the public sector elite while seeing the value of their own pensions plummet, public sector staff are well paid and we can't afford to pay for such generous benefits as well."

The TaxPayers' Alliance (TPA) today welcomed the Hutton Commission's recommendations to reduce the cost of public sector pensions, and urged the Government to implement them as soon as possible.

In a series of reports (How to save £50 billion, September 2009; How to Cut Public Spending, March 2010) and a submission to the Commission, the TPA has recommended increasing employee contribution rates to public sector pensions. The TPA has also called for a switch towards defined contribution pensions in the public sector.

Increasing employee contributions to all unfunded public sector pension schemes by a third could save £2.5 billion. That would only raise the typical contribution rates from 6 to 8 per cent of salary.

The TPA has produced a range of research on public and private sector pensions, findings include:




  • Occupational pension schemes have lost between £150 and £225 billion in growth, at least, as a result of the abolition of ACT relief on pension funds in the 1990s, even before the financial crisis.




Emma Boon, Campaign Manager at the TaxPayers' Alliance, said:

"Taxpayers face a bill for more than a trillion pounds needed to pay unfunded public sector pensions. We welcome this morning's recommendation from Lord Hutton, the Government should increase employee contributions and raise the pension age to make much needed immediate savings. Final salary pension schemes are all but extinct in the private sector, but necessary changes in gold-plated public sector pensions haven't been made. It is not right for taxpayers to be subsidising million pound retirement benefits for the public sector elite while seeing the value of their own pensions plummet, public sector staff are well paid and we can't afford to pay for such generous benefits as well."

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