UK - Taxpayers will have to find an extra £335bn over the next 50 years to fund gold-plated public sector pensions, a report claims.
The Pensions Apartheid: The problem, the cost and the tough choices that need to be made said taxpayers have to pay twice for public sector pensions - for the employer contributions and for an annual bailout.
Based on Treasury data, the IoD estimated the total bailout could reach £335bn - £13,000 per household - over the next 50 years.
IoD director general Miles Templeman said: "In an ideal world, pensions reform would not be necessary, but an ageing population makes pensions more expensive. The recent reforms to public sector pensions were inadequate and failed to bridge the pensions apartheid.
"There is no longer any justification for a growing bailout of generous public sector pensions and further reform is now essential. It is unfair for businesses and families struggling in the downturn to pay higher taxes to fund pensions that they cannot afford for themselves or their employees.
"The enormous deficits currently being run intensify the need to reduce long term costs to help bring the public finances back to sustainability."
The report's central recommendation is that the public sector normal pension age for new members and for new accrual of existing members should be increased in line with increases in the state pension age.
This means that the NPA for new accrual of existing members should increase in stages to 65 by 2020 (in line with the increase in the SPA for women) and then for both new members and new accrual of existing members to 68 by 2046 (in line with the SPA for both men and women), removing a key unfairness of the present system.
The report also found the current recession and the enormous deficits being run intensify the need to bring the public finances back to sustainability.
Long term liabilities need to be brought down, and with an ageing population making pensions more expensive, there is simply no alternative.
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