Reform’s public-sector pensions plan could cost billions extra, union warns

A leading trade union has warned that Reform UK's proposal to alter public-sector pensions could lead to billions in additional costs for taxpayers. The union, Prospect, argues that switching from defined benefit to defined contribution schemes for new employees, as suggested by Reform's deputy leader Richard Tice, would harm public finances rather than save money. Tice advocates for this change, citing unfunded pension liabilities as a significant national debt risk. He believes a transition to defined contribution plans, similar to those in the private sector, would offer less generous retirement payouts and help prevent national bankruptcy. He stresses that his proposal would only affect new employees, not current ones, and that the cashflow impact would be minimal compared to the larger balance sheet liability. Prospect refutes this, stating that current public-sector defined benefit schemes are affordable because they are unfunded, meaning current contributions cover current pension payments. They assert that shifting to a defined contribution model would mean the Treasury loses these ongoing contributions, while future payments would need to be financed differently. Prospect's general secretary, Mike Clancy, called the plan a "ticking timebomb" that would cost taxpayers tens of billions and create staffin... download the app to read more