Any future cost sharing mechanism for public sector pensions must provide sustainability, stability and fairness.

That’s the view of the island’s trade unions who have made a joint submission to a consultation being carried out by the Public Service Pensions Authority.

Proposals to reform public sector pensions were debated in Tynwald in March.

Members rejected an amendment by Treasury member Bill Shimmins who called for the unfunded pension scheme to be closed to new members.

The court instead approved the setting up of a voluntary defined contribution (DC) scheme for new staff as a way of tackling a spiralling funding gap - the shortfall between contribution income and benefit expenditure - that’s due to reach £131.21m by 2059.

It also notes that the PSPA will continue to develop final cost sharing legislation to have this in place by 2020.

A month-long consultation on cost sharing options ends tomorrow (Friday).

In a collective statement issued by the Isle of Man Trade Union Council and 12 affiliated trade unions, TUC president Debbie Halsall said: ’Scheme members accept that a cost sharing mechanism is a necessary further step to ensuring that public sector pension provision is sustainable in the long-term as well as fair and affordable now.

’However, it is important that the approach taken to cost sharing is principled and robust and that it achieves sensible objectives.’

The TUC president said that a cost sharing mechanism should be based on a number of key principles - sustainability, stability and fairness.

Three options for cost sharing are currently under consultation - a 2% pay buffer, a 75/25% split and a 75/25% split with a small buffer.

The 2% pay buffer caps the cost of the schemes to taxpayers. It would mean the long-term employer cost of the unified scheme would eventually be about 15% of pay.

This option is described as ’sustainable, stable and fair’ and ’clearly the best approach for cost sharing’ in the joint union submission.

But the unions oppose the 75/25% splits, either with or without a small buffer.

They say that these options will be potentially unsustainable if costs rise to an unaffordable level.

The 75/25% split with the buffer would be ’slightly more sustainable’, argues the submission, but remains unsustainable, unstable and unfair.

A second major element of the cost sharing mechanism is the length of the recovery period.

The PSPA proposes a period of eight years, which is the average future working lifetime of scheme members. But the unions suggest 15 or 12.