A member of Treasury is calling for the current public sector pension schemes to be closed to new members.

Bill Shimmins MHK has tabled an amendment to a motion on the legacy funding gap which is due to be debated by Tynwald next week.

A Cabinet Office report had ruled out a series of options to tackle the spiralling funding gap - the shortfall between contribution income and benefit expenditure - which is expected to rise from the current £36.67m to £131.21m by 2059-60.

It claims closing the current schemes to new members will need an extra £2.3bn of funding over the next 50 years. Instead, it recommends bringing in a voluntary defined contribution (DC) scheme for new staff.

But Mr Shimmins believes the current unfunded schemes should be closed to all new members who should automatically go onto the new DC scheme.

And it is likely that his amendment will get the support of Treasury Minister Alfred Cannan who has a pre-declared position on this matter.

Mr Shimmins said: ’Previous Manx politicians have also discussed this thorny issue.

’Unfortunately, they failed to take decisive action, which has meant the problem keeps getting bigger.

’We cannot keep kicking the can down the road. This is unfair on the younger generation and those that will follow.

’The tried and tested method which has been used by many organisations to address large pension deficits is to close the Defined Benefit scheme to new entrants.

’This protects the existing members in the scheme and also restricts further ballooning of the liability to the taxpayer.’

Mr Shimmin’s amendment directs the closure of the Defined Benefit scheme to new members and sets up a new DC scheme.

Asked about the possible £2.3bn cost of funding such a move, he said: ’In the long term closing the scheme will save the island billions.

’Maintaining a defined benefit scheme for new entrants means that the unfunded liability will increase for many decades to come.

’It creates a medium term cash flow challenge but I am confident this is eminently manageable.

’Closing the Defined Benefit scheme to new entrants provides sustainability for existing members whilst a new DC scheme provides flexibility for new joiners.

’This is the fairest solution to all and the island will breathe a sigh of relief when we take the right action to sustain our future.’

The Cabinet Office report said the introduction of a compulsory DC scheme would mean the legacy funding gap disappearing over 70-plus years. But it adds: ’The cost of achieving this would be significant: around an additional £2.3bn and pensions expenditure would in fact rise over the next 50 years or so before it began to fall.

’Additionally, government would still need to contribute up to 15% of salary into an alternative DC scheme, and this cost would be ongoing.’

Before he became Treasury Minister in 2016, Mr Cannan wrote to Isle of Man Newspapers outlining why he thought the only solution to spiralling pension liabilities - which have tripled to £3bn since 2007 - was to close the schemes to new members.

’I do not understand why any government can consider that public sector final salary schemes are any more sustainable than those in the private sector,’ he said.

Another Treasury member, Ralphe Peake MHK, has also tabled an amendment calling for the schemes’ normal retirement age to be linked to the state pension age.