Treasury seek additional £5.2 million from Pension Reserve

More civil servants taking early retirement

Tynwald Members will be asked next week to approve the transfer of £5.2 million to Government’s revenue account from the Public Service Employees Pension Reserve.

Treasury Minister Eddie Teare says the need for additional funding is the result of an increase in the number of staff taking early retirement or deciding to opt out of the public sector and to transfer their pension entitlement.

It means net expenditure on public sector pensions for 2014-15 was £58.4 million, considerably higher than the budget of £26 million.

A transfer of £27 million from the Public Service Employees Pension Reserve (PSEPR) was approved by Tynwald during the Budget in February.

Next week, Treasury will ask for the additional £5.2 million in order to balance the revenue budget.

The fund was set up in 1994 to receive the pension transfer values of incoming employees and fund the transfer values payable to outgoing employees, lump sums payable to retiring employees, the ongoing costs of the implementation of the Government Unified Scheme.

Minister Teare says whilst Treasury has the power to sanction the transfer without Tynwald approval, he wants members to be fully aware of the situation and have an opportunity to express their views.

He points out that substantial cost savings have been achieved in terms of the salary budget, as Government is now employing fewer public servants, but adds that reform is needed of both public sector and state pensions to make them more sustainable and give confidence that pension liabilities can be met in the future.