Belfast Telegraph

Concern over civil service pensions

The civil service pension scheme in Northern Ireland is more than £50 million in the red, it has been revealed.

The final salary retirement plan has been stretched by the massive increase in employees under the Labour government and retired people living longer.

Around 26,000 civil servants are on the books, although they are on a variety of packages.

John Compton, a director at PricewaterhouseCoopers, predicted the Government would consider scrapping the final salary system within five years.

"People are living longer so the Government faces a major problem in the near future," he said.

"This Government will have to make some hard choices. They should go the same way as the private sector and cut out final salary schemes working towards some form of a funded scheme." He added: "Ultimately the scheme has to be radically overhauled."

According to an Assembly answer by the Department of Finance and Personnel to SDLP MLA Tommy Burns, the principal civil service pensions scheme was £50.5 million in deficit in 2009/10. That compares to £16.8 million in 2001/2.

Mr Compton added: "Because the civil service has been getting substantially larger under Labour, it has boomed in the number of people entitled to membership, that deficit is substantial and it is growing faster than our ability to pay tax so at some point in the relatively near future the Government will have to make some hard choices.

"As this huge bulge in civil servants who appeared over the last 15 years move towards retirement we will have to find large sums of money to pay their pensions." Mr Burns said it was a serious situation. "The scheme is going to have to have more money put into it but where is the money coming from?" he asked.

Bumper Graham, an assistant general secretary at the Northern Ireland Public Service Alliance (NIPSA), said career average pensions were introduced several years ago for new recruits. "It is not a solution to the problem," he said.

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