Reduce the nation‚’s spending deficit by reforming the public sector defined benefit pension scheme

Covid-19 has resulted in unprecedented levels of spending and borrowing. Whilst there are various economic methods to get the country out of this hole (eg inflation, increased taxes etc) this fails to address the fundamental issue that we spend more than we bring in. By reducing superfluous public sector spending we can reduce our spending deficit, or even divert funds to more beneficial causes. One substantial drain on public money is the lucrative defined benefit pension schemes on offer to public sector employees (be they politicians, council workers, teachers etc). As well as being a drain on public money, the schemes also create a significant wealth inequality, with private sector workers unable to benefit from such lucrative schemes, and significant resentment across the private sector. It is therefore time, in the interests of fairness and equality, to level the playing field. It would be unethical to remove benefits for those already accruing them, but by immediately stopping new members joining these schemes and moving them onto the government‚’s workplace pension scheme this would immediately reduce the level of contributions requiring to funded. Due to the huge drain on public money that these pension schemes create, employees should be given a basic pay rise to partly compensate for the reduced contributions.

This proposal should be acceptable to the public for the following reasons:

– Existing public sector employees will suffer no reduction in their benefits;

– Private sector employees will be less resentful of public sector employees‚’ substantial pension benefits;

– New public sector employees will see a higher base salary, allowing the right talent to continue to be recruited;

– The spending deficit will be rectified allowing public spending to be diverted to more visible and worthy causes;

– The burden of debt on future generations will be lessened.




Leave a Reply