Government officials have rejected claims that public sector pension commitments are unaffordable. The Treasury claimed comparisons between public sector pensions and the private sector were ‘ridiculous and misleading'. Research from the Liberal Democrats claimed that for every £1 that private sector workers put in to their pension schemes, they pay 91p in tax to finance public sector pensions. The party put the price of providing current public sector workers with a pension at £530bn, but actuaries at City firm, Watson Wyatt, have predicted an even higher liability of £960bn. Spokesman Stephen Yeo said: ‘For every pound paid by private sector workers into their own pension, they will have to pay £2.99 to cover the promises of public sector pensions being made in taxpayers' names today.' Concern was heightened after government accounting documents revealed liabilities for the NHS pension scheme had risen to £165.4bn – up from £104.2bn two years ago. Liberal Democrat pensions spokesman, Danny Alexander, said: ‘The unfunded public-sector pension liability is already more than £500bn and is set to rise. If we do not examine how this will be paid for, we are in danger of creating a two-tier system of retirement for private and public sector workers.' The Treasury argued the figures were flawed as they failed to take into account company taxation. A spokesman said: ‘It is ridiculous and misleading to suggest there is a direct link between public sector pensions and the private sector workforce. Public sector pensions, like all government spending, are funded by general taxation. Reforms already being introduced by the Government will limit costs to taxpayers. ‘The important question is whether the Government can afford to pay out the cash costs of pension liabilities each year.'
