Bloated and unsustainable

摘要

Occupational pensions started in the civil service and then spread to the private sector. Defined-benefit schemes, offering pensions linked to years of service and final salary, became the norm. But the DB pension is now dying in the private sector as a result of decisions by many companies to close these expensive plans to new workers. On current trends, DB pension provision will become more and more concentrated in the public sector, where it began. This will exacerbate the existing disparity between pension rights in the public and private sectors. According to the Pensions Commission, the public sector's share of occupational and personal pension wealth is double its share of total earnings. The public sector accounts for 17% of earnings and 18% of employment but 36% of the value of pension rights.