It remains the biggest challenge facing the Manx government.

But Ministers have once again put off a decision on tackling the huge public sector pensions legacy funding gap - and a final report won’t now be produced until March next year.

A report to this month’s Tynwald sitting will recommend only that a series of workshops be held to reach a conclusion on a series of options.

Treasury and Public Sector Pensions Authority offices will also ’explore in greater depth’ the feasibility of these options.

These include introducing a voluntary defined contribution scheme for public servants and capping the salary on which pension benefits are based.

The number of public servants who have retired each year has risen from 224 in 2010-11 to 355 in 2017-18, but peaked at 399 in 2014-15. Of the 2,808 who have retired since 2010, two thirds took early retirement.

Government accounts give a figure of the pension scheme liability as £3.8bn. This is a long-term liability that will not be required to be paid all at once.

If the public sector pension schemes were fully funded, then the amount required to be in the fund would be £2.3bn, a significantly lower but still huge figure calculated by the PSPA actuary.

During a debate in February last year, Tynwald approved an amendment tabled by Middle MHK Bill Shimmins that a report outlining full options and proposals to tackle the legacy pension gap should be presented by November that year.

Mr Shimmins criticised the ’inordinate’ length of time it had taken to get this far.

But in November, Policy and Reform Minister Chris Thomas admitted that progress on addressing the legacy funding gap had been slower than hoped but that options would be available for consideration by early 2018.

But, now in July, Mr Thomas presents his report.

His motion calls on Tynwald to receive the report and note that a series of workshops with members will be held over the next eight months aimed at reaching conclusions on the options it covers.

Further work will be carried out on options including:

* Introducing a voluntary defined contribution scheme that should become the default scheme in

* Capping the salary on which pension benefits are based

* Linking the normal pension age for each public sector scheme to the state pension age

* Borrowing options.

Once this further work on options and the workshops have taken place, a further report will be submitted to Tynwald no later than March 2019 with finalised recommendations to address the legacy funding issue.

The island’s public sector pension schemes are ’pay as you go’ with no fund of money building up through contributions and any shortfall met from the Public Sector Employees Pensions Reserve Fund, which is due to run out in 2021-22.

The legacy funding gap is the difference between employee and employer contributions and the total gross expenditure.

This figure is £23.4m in 2017/18, rising to £72m in 2035/36.

The PSPA obtained legal advice from a UK QC on whether it was permissible to reduce benefits rights earned to date.

Counsel’s conclusion was that it was likely to lead to significant legal challenge and industrial relations issues, and the PSPA concluded this was an option of very last resort.

The report also ruled out closing the current final salary schemes to all new members, or alternatively all new members other than key staff - saying this would lead to cashflow issues, ongoing costs and legal challenges.

Bringing in a ’mirror’ money purchase scheme was deemed as not viable, while introducing a salary incentive to join a defined contribution scheme would only increase the government’s wage bill.

Increasing scheme pension age is expected to make limited impact on future cashflows.

The PSPA looked at borrowing options to top up the pension reserve.

It also considered taxation options but said the legality of measures that could potentially discriminate against certain groups of pensioner would need to be clarified.