'Ponzi' public sector pensions threaten economic stability

Jonathan Stapleton
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Public sector pensions have been run like an "unstable Ponzi scheme" which threatens to impoverish future generations, according to an independent report.

The Public Sector Pensions Commission accuses successive governments of hiding the true cost of public sector pensions, and raises fresh concerns about the State's £1trn of retirement promises. Its report, out today, calls for urgent reform of the civil servants' gold-plated benefits in which it says pensions are worth an average of at least 40% of salary. The main unfunded schemes have combined employer and employee contribution rates artificially set at around 20% of salary. But the report says the true value of such schemes, when measured using a discount rate based on the cu...

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