Even full implementation of Lord Hutton's proposals to overhaul public sector pensions would not create a sustainable pension system, a Centre for Policy Studies report finds.
In The £100bn negotiations, published by the Conservative-linked think tank today, author Michael Johnson argued that moving public sector workers to defined contribution arrangements would enable the government to concentrate on improving the state pension.
The eight-page report claimed public sector workers receive pay packages on average more than 13% higher than those in the private sector, with the main difference being pension arrangements.
Johnson also said cutting the cost of public sector pensions by 25% would reap future savings of £100bn in today's money.
CPS director Tim Knox said: "The stakes are very high. The relatively lavish pensions enjoyed by many public sector workers are a burden which will largely be met by the private sector."
The report noted that, within a few years, the private sector will have become a "defined benefit pensions desert", in which pensioners assume their own longevity risk.
It argued if the public sector also made the switch to DC all of the state's limited capacity to absorb pensions-derived longevity risk could be concentrated into an improved state pension.
However, Pension Corporation founder Edmund Truell said the savings could be achieved by consolidating funded public sector schemes and using economies of scale to save on actuarial and investment fees.
"This has been successfully trialled in other countries including Canada and Denmark and works to the benefit of all - the pensioners get their accrued benefits and the taxpayer saves vast amounts of money," he said.
"At the same time, these funds should be allowed to invest in long-term infrastructure projects to the benefit of society more widely."
CPS' report also questioned the assumptions on growth in the public sector workforce, real earnings and productivity used by Hutton which showed the cost of providing these pensions would fall to 1.4% of gross domestic product by 2060.
Johnson observed that this calculation has "come back to haunt the coalition" as unions have used it as evidence that public sector pensions are affordable.
Knox said: "Yes, reform of public sector pensions is tremendously difficult. But this must be ruthlessly pursued if we are to have a lasting and fair solution."
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A pension schemes bill is set to be laid in parliament in the coming weeks after the government announced a wide-ranging suite of reforms in the Queen’s Speech today.
Partner Insight: Members' evolving needs and expectations are driving changes in scheme administration. As the pensions landscape inevitably continues to change, how will your scheme's approach need to develop to keep pace?