According to your news story, the CBI has called on the government to set up an independent commission to examine public sector pensions, in particular the liability for unfunded pensions, which it estimates at more than £915bn (‘Government will not recover £126m pensions overpayments’, December 19 2008—January 8 2009).
Perhaps our predecessors of 80 or 100 years ago should have established funds based on periodic actuarial valuations, as indeed they did for local government in 1922 — thus substantially providing for employees’ pensions during their working lives.
But they didn’t. And now surely the only alternative to continuing as we are at present is to create funds out of additional taxation (£45bn a year for the next 20 years?).
No government is likely to grasp this nettle and how would the CBI react to this burden? I hope the government will not embark on such a sterile exercise.
Mervyn Bowley, Chester
