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The public sector superannuation fund for pensions is fully funded, argue three deputies who want to introduce a three-year pension contribution holiday.
“Our proposal for a three-year contribution holiday will save taxpayers around £78m between now and 2026. That sum is better used in helping to fund our capital programme,” said Deputy Heidi Soulsby.
She is one of the deputies pushing for the ‘Fairer Alternative’ which is series of proposals that is counter to Policy and Resources’ plan for future funding of capital projects. It would avoid the need for a goods and services tax in the immediate future.
One of the proposals within the Fairer Alternative package is the introduction of a three-year pension contribution holiday, “in respect of the benefit part of the States’ Superannuation Fund for public servants”.
During the last valuation of the fund in 2020 the fund was found to be 107% funded.
“As P&R said yesterday, the Superannuation Fund ‘was fully funded at the last valuation at the end of 2020.’ 100% funding means that the future forecast assets of the fund are sufficient to meet the future forecast liabilities,” continued Deputy Soulsby.
“Having more than 100% funding is prudent and conservative but it effectively means that the taxpayer has overfunded the likely liabilities of the public sector pension scheme. That overfunding totalled around £102m at the end of 2020.”
Last year P&R said, due to this overfunding, it was in a position to start reducing contributions into the pot by £9million a year.
It comes as the Fairer Alternative deputies continue to pick apart P&R’s proposals for GST, borrowing and social security reform. Most recently the group suggested that P&R had overlooked an impact on the pension fund that would lead to GST costing as much as £90million to implement.
The claim was dubbed ‘misleading’ by P&R who said any impact would never be felt by the taxpayer.
“I wholeheartedly agree with P&R’s statement yesterday that in the context of a fund worth £1.5bn, ‘increases or decreases of this order on a fund of this size are par for the course’ which is unlikely to require any later action or additional funding,” said Deputy Gavin St Pier, in a recent statement.
Express has reached out to Deputy St Pier for more clarity on where his group now stands on the £90million figure.
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