Pension report higher contributions a good start, but not nearly enough
Prof Philip Booth comments on the Economic Freedom of the World: 2010 Annual Report
Dr Steve Davies welcomes Lord Browne's report
Peter Tompkins and Prof. Philip Booth comment on Lord Hutton's interim report
Peter Tompkins, who chaired the earlier investigation set up by the Institute of Economic Affairs, the Institute of Directors and others, said:
“With the value of public sector workers’ pensions often pushing towards 40% of their salaries, employees need to realise that larger contributions are entirely necessary. I welcome the Commission’s focus on looking at a way of paying benefits that better reflects average salaries for workers’ full lifetimes. This is likely to be a popular change, particularly for the many rank and file employees.
“This is a problem that should have been dealt with two decades ago. The current situation is unsustainable and the government must make this absolutely clear.”
Philip Booth, vice-chairman of the Public Sector Pensions Commission and Editorial Director of the Institute of Economic Affairs commented:
“Many of the suggestions for long-term reform of the schemes are sensible but the report ducks some of the crucial issues. We must put the accounting for public sector pension schemes on a proper economic footing. Furthermore, the full costs of public sector schemes must be borne by employers and employees – both equity and economic efficiency demand this.
“Essentially, the Commission has asked the government to set up another enquiry into the issue of accounting for and promoting transparency of costs. This is really not necessary – the groundwork has already been done so that Lord Hutton himself can make a recommendation on this issue.”