Backbench MHK Alfred Cannan MHK has expressed ‘deep concern’ over the future of the public sector pension schemes.
He spoke out following the publication of a report from the Public Sector Pensions Joint Working Group which is due to be debated in Tynwald next week.
The report shows that currently the taxpayer is paying £60m a year in pension payments to former public sector employees with the existing workforce currently contributing just £17m of the £77m annual pension bill.
Under the proposals outlined in the report, the position would change slightly with employee contributions rising to £25m and the taxpayer’s bill dipping to £57m per annum but under the plans all the taxpayer contributions would now come in to Treasury from departments as ‘employer’ contributions, rather than paid directly from central funds.
Mr Cannan said: ‘This is a blatant accounting fudge in which “shortfall” is turned into “income” by simply pushing the problem away from Treasury and on to departments who will then “pay” Treasury.
‘It is absolutely unbelievable that this is proposed as a solution to public sector pension liabilities, which currently exceed £2bn and which continue to rise.
‘Each year it is going to get more and more expensive and in 2018-19 the pension’s bill for public sector workers is expected to reach £100m.
‘I have no problem with employees paying more for their contributions but that is only sustainable up to a point and these proposals offer absolutely no certainty for employees in respect of future contribution requirements.’
Mr Cannan said it was his view that the schemes must now be closed to new members with the exception of the police, teachers and medical staff.