Public sector Pensions deficit

The looming black hole in the Public sector pension pot was created very largely by the greed of senior civil servants empire building and also by weak MHK's and particularly past Treasurers that have ignored the voice of the public who for thirty years or so have said there are too many civil servants.  And there still are to-day.

Do not forget also the greed of many of our MHK's in awarding themselves very comfortable pensions after contributing nothing at all until recently. Even then a few of them appeared to have had to be embarrassed into contributing a very modest amount.

See also Retired Politicians.

At last we have a Treasurer who is attempting to tackle the problem fully and not tinker around the edges by stealth tax means.

The black hole is a Public Sector civil service problem and must be dealt with from within.  

To-days new generation of civil servants must not be burdened with excessive contributions purely to pay the far too generous pensions past senior servants awarded themselves.

Every pound required to fill the deficit should come from a percentage reduction of current Public Sector retiree pensions.

The larger their pension the more they have to forego in percentage terms.   Those on small pensions should not be required to lose anything.


The increased employers contributions already in place is an underhanded stealth tax on the general taxpayer.

America is waking up to the same problem.  They are seeking solutions that do not include taxpayers reserves.


Why the contribution is important

The innocent must not be punished for the wrongs of the perpetrators.

by Fairforall on April 18, 2017 at 02:58PM

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Average rating: 4.2
Based on: 8 votes


  • Posted by Phil_1744 April 18, 2017 at 16:09

    The Public Sector Pension deficit is not due to the greed of senior civil servants - it is down to poor planning and mismanagement by successive governments, who have failed to set aside a separate and adequate pot of employee and employer contributions. Some monies were set aside as a reserve, but until recently, nowhere near enough was set aside by government, who didn't appreciate that payment of pensions from the annual revenue account would be a problem, until the great VAT clawback by the UK, left our annual revenue accounts in the red by over £200m per annum. Despite savings, we are still running an annual deficit of around £100m. The Public Sector Pension problems and the current annual income deficit is something that the last two administrations have failed to address, because the only way it can be addressed is increased taxes, which is unpopular. The current administration have to address this now. They owe their Public Sector pensioners the pensions they were promised and they need to start addressing this now - something they should have started 10 years ago!
  • Posted by Yukiyama April 18, 2017 at 16:25

    Easy, easy fix.

    1. Tax lump sums of public sector pensions (currently tax free). What a saving.
    Come on 20% saved recouped by tax.

    2. No pay rise for all Civil Servants SEO Grade & above (£55k +) for next three years.
    Ensures those high earners don't grow too fat.
    3. Reduce number of Cabinet Office from 271 to 200 job cuts, not moving them round.

    You want to fix the Black Hole Ministers, you have got to grasp that nettle.

    Come on we are willing to pay for essential services, but let's start living within our means.
  • Posted by dpfellows April 18, 2017 at 17:41

    Interesting subtle difference of wording between the public servant Chief Financial Officer in Treasury and the Treasurer when describing theP S Pension deficit:

    Sheila Lowe, the public servant, says

    " Public Service Pension Reserve to be depleted by 2020/21, leaving £58 million shortfall to be met from general revenue".

    Alf Cannan, Treasurer and politician says:

    "Public Sector Pensions expenditure represents 10% our revenue expenditure... The costs expected for 2017/18 are £99.2 million. The latest cost projections indicate that the fund will be depleted by the end of 2020/21. At this point it is estimated that an additional liability of £58 million will need to be funded through revenue."

    Whilst neither point out clearly that this is a per annum cost at least Alf Cannan is point in out that it is an ADDITIONAL amount that has to be found out of general revenue on top of the £41 million already being taken out of money that should be being used to fund public services. So in total in 2-3 years time £100 million a year will be spirited out of general revenue to pay for this elephant in the room.
  • Posted by OldSailor April 18, 2017 at 18:00

    If a private pension scheme were so badly run, would the taxpayers be constantly topping it up or would it be allowed to collapse? If a private scheme were to require annual injections of cash from the taxpayer would it be described as insolvent? Would the people responsible for allowing others to continue to pay into an insolvent scheme or to have an expectation that such a scheme could meet its obligations be facing criminal charges?
  • Posted by dpfellows April 18, 2017 at 21:53

    In the USA public sector pensions running out of funds have been permitted by the courts to reduce pensions in payment and pension benefits on the grounds 50% of something is worth more than 100% of nothing!
  • Posted by Kieron April 19, 2017 at 20:38

    The shortfall came about because the VAT formula was re-written resulting in a £200M loss to the IOM per year. It was known about in 2007/2008 but no-one took action because it would have been politcal suicide. Looking after no 1.
  • Posted by Mac1951 April 19, 2017 at 22:34

    Phil 1744 shows the same blinkered approach of most of the civil servants and I suspect he is one that the problem can only be met by increasing taxes and they must be paid what they were initially promised.

    This is rubbish in the private sector the pensions would just be reduced if the company was unable to meet its liabilities look what happens in the UK if pension commitments can not be met and they have to go into the Protection scheme and inevitably the pensions are cut.

    The civil servants and MHK's fail to recognise reality and they all need to stop whinging and accept the inevitable.

    If the moneyis not there they can not be paid!
  • Posted by Fairforall April 21, 2017 at 12:09

    Thinking about this further just who instigated the practice of raiding the taxpayers reserves initially? The perpetrators need to be named and shamed and gaoled.
    This is nothing short of blatant theft and can be likened to an employee dipping into the till to cover their personal over spending.
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