Public sector pensions bill rises £7.4billion due to 'toxic tangle' with state reforms (MoneyMarketing)

Michael Johnson’s report, “A Toxic Tangle”, was featured in MoneyMarketing on Monday 4th February.

To view the full article, please visit the MoneyMarketing website

“Influential think-tank the Centre for Policy Studies has warned public service pensions will cost an extra £7.4bn a year as a result of a “toxic tangle” with proposed state pension reforms.

Last month, the Government published a long-awaited white paper detailing plans to introduce a single tier state pension worth £144 a week for future retirees.

The publication of the white paper was delayed twice as policymakers wrestled with the complex issue of contracting-out.

CPS research fellow Michael Johnson says the reforms – which are due to be implemented in April 2017 at the earliest – will load an extra £7.4bn a year onto the cost of public sector pensions.

Around £3.4bn of this comes from the loss of the public sector employers’ National Insurance rebate following the abolition of contracting-out.

The additional £4bn follows the decision to allow contracted-out workers to continue to build up state pension entitlement up to the £144 a week single tier level.

To view the full article, please visit the MoneyMarketing website

Date Added: Monday 4th February 2013