CBI calls for public sector pensions reform

Wednesday, April 7th 2010

In order to contain a trillion pound burden on the taxpayer, public sector pensions must be part of a more affordable system.

According to the Confederation of British Industry (CBI), final salary models are not sustainable and other systems must be implemented.

John Cridland, deputy director general at the organisation, said: "Public sector workers deserve a good retirement, but they and their employers should pay their own way."

There is a rising pensions black hole "and taxpayers cannot be left to make up the difference", he added.

Research from the CBI found that final salary pensions cause such deficits because the level of guarantee from employers cannot be predicted.

Each UK household is now liable for an equivalent of £40,400 in debt from these schemes.

To solve this problem the government should carry out a full investigation of pensions costs and establish an independent commission, the CBI advised.

According to the confederation it aims to work with the government and legislators from other countries to enable effective competition from UK businesses.