The government is making progress on the public pension deficit, but it can’t just wave a wand to make it disappear.

That was the warning from Policy and Reform Minister Chris Thomas MHK at this month’s meeting of the Positive Action Group.

Mr Thomas, who was invited to detail progress made on the £3.7bn pension deficit began his spellbinding talk by discussing the dark art of magic.

Perhaps embracing a government desire to pull a rabbit out of a hat, he said: ’Politicians and magicians have the same last six letters but that’s where the similarity sadly ends.

’I am no magician, I can’t just wave a wand and make the pension deficit just go away.’

Mr Thomas said that the pension deficit is both a historical and current problem for the island to resolve and one which before 2006, little was done to fix.

However, he said that the island’s position has improved. A projected shortfall of £58m, which needed to be filled in 2021/22 has now been lowered to £45m and will not require funding until 2022/23.

During his speech, Mr Thomas spoke of missed opportunities as he told the meeting that in 1991, the number had grown to 29 different pension schemes consisting of 4,949 members.

At the time, the government actuary’s department conducted a review which concluded: ’The present structure of providing superannuation arrangements for public service employees in the Isle of Man is becoming cumbersome and increasingly complex.

’It is considered that some simplification and rationalisation of the present system should be possible. It would be feasible to establish a single pension scheme for Isle of Man employees.’

However, the recommendations were not taken up by Tynwald, nor were similar proposals accepted in 2002 when a single scheme was recommended by the Civil Service Commission based on the UK model and seeking higher contributions from employees.

In 2007, when challenged on the legacy funding, the then Treasury Minister and former Chief Minister Allan Bell (pictured above) told the House of Keys that there was no black hole.

Mr Bell said: ’There is not a crisis, there is not a massive black hole that the Hon Member (former Onchan MHK Peter Karran) keeps referring to.

’The issue is being managed and we will be reporting back with our recommendations for any changes at the appropriate time.’

In an attempt to address the legacy issues, changes were eventually introduced in 2012 to help make public sector pensions more sustainable.

These included increased contributions for most workers, lowering benefits for new members of schemes to 20% less than existing members and a move from final salary pensions to average salary pensions.

Also introduced was triennial actuarial valuations, the next of which is due before Tynwald in March this year.

Mr Thomas outlined further changes to the schemes starting in 2020.

They include employee contributions rising to about 10% of pay, pre-2012 it was 6%.

He added that teachers and police schemes have had cuts to future benefits and negotiations on reforms with the judiciary have been carried out.

Furthermore, he revealed that an update to the legacy report is due before Tynwald in March of this year.

The next PAG meeting is scheduled for the end of February.

It will host Treasury Minister Alfred Cannan MHK to discuss the 2019/20 budget.