Public sector pensions 'in need of reform'

Pensions in the public sector cannot continue as they are, it has been suggested.

According to pensions analyst Laith Khalaf, the government must decide whether it wants to reduce the benefits it offers workers or raise taxes to cope with their growing cost.

The expert pointed out that the choice facing the new Conservative/Liberal Democrat coalition is limited, noting that the population is ageing and this creates a problem for both the state and for public sector pensions.

He said: "It is going to be the case that, from now on, public sector workers are going to have to fund their own pensions more than they are at the moment."

Mr Khalaf's comments came after the recent release of a report by the Public Sector Pensions Commission, which included recommendations for policymakers in the UK to raise employee contribution rates and to apply reforms to all current members of such schemes.