“No TV and no beer make Homer something something…”

It’s not normally in my nature to comment heavily on the news but when PCS forwarded this to me just now, I felt compelled to share:

“The Conservative-dominated cross party committee has concluded that the scheme reforms introduced in 2007/8 (and agreed by the Unions) will keep the costs of public sector pensions stable at 1% of GDP.

Therefore the cost of pensions is not escalating out of control and, in our opinion, are affordable.

As PAC highlight, the cost of public sector pensions cannot be viewed in isolation. As they state “the Treasury has not properly assessed how changes to public service pensions might lead to additional spending elsewhere, for example by increasing demand for means-tested benefits. Public service pensions policy must not be determined in isolation from other areas of public policy and spending.”

They go on to say “there was no assessment of the impact that higher employee contributions and lower public service pensions would have on the number of people opting out of their schemes. Higher opt-out rates would in turn increase future demand for means-tested benefits”.

Virtually all civil servants are currently members of a pension scheme. If contributions increase dramatically then many staff members, particularly the low paid, may leave the schemes in order to save the contribution monies.

In Local Councils, which have seen increases in contributions, almost 40% of staff have opted out of the pension scheme. The social needs of those 40% of staff don’t disappear and as the PAC suggests the future demand for means-tested benefits will increase accordingly. Therefore increasing contributions doesn’t necessary save the government as a whole, much money.”

Up your mancnut, Osbourne.