Telegraph ‘Expert View’ – The Challenge of Pension Reform
by Dr. Ros Altmann
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I think John Hutton’s report is a reality check on public sector pensions. He concludes that changes are essential and I do hope public sector workers will accept this. Of course change is unpopular, but Lord Hutton says taxpayers are shouldering an unfair burden of the risks and costs of these pensions, while public sector employees contributions do not fairly reflect the value of their benefits. He shows that these pension schemes have not kept pace with demographic realities and that as the costs of paying public sector pensions is set to rise sharply in the next few years, it is only by increasing member contributions that taxpayer costs will be reduced. Lord Hutton also stresses that the last Governments cap and share arrangements will not be enough to reduce costs so change is inevitable.