MORE than a million pounds of public money is being dispensed annually in pensions for ten former government employees, a freedom-of-information response has revealed.
Details of the ten largest pensions being paid out under the government’s final-salary scheme are included in the newly issued response, with the annual payments ranging from £107,000 to £143,000.
A total of 118 members of the scheme, representing 2% of the membership, are receiving a pension of more than £60,000 per year, according to the figures that were provided.
The revelations have sparked concern from the vice-chairman of the Corporate Services Scrutiny Panel. Deputy Steve Ahier said that the matter was imposing a burden on taxpayers and had been a major factor in the high levels of borrowing approved by the States Assembly at the end of last year.
As part of the Government Plan for 2022-2025, States Members supported proposals for a total of £1.7 billion in funding by 2025, including £480 million for refinancing pension liabilities.
Deputy Ahier said: ‘The lack of funding in this area has been an ongoing problem for some years that hasn’t been directly addressed.’
The final-salary scheme was closed to new members at the end of 2015, with around 7,000 public servants now accruing pensions based on career-average earnings.
Deputy Ahier questioned the agreement which led to the change in 2015 and said there was a ‘stark difference’ between payouts to the highest-earning former employees under the old scheme, and the new arrangement.
The ten largest pensions in the new scheme range from £3,500 to £10,200 per year. Former government employees, under either scheme, are also eligible for the state pension.
The FoI response also covered teachers’ pensions paid out as part of the Jersey Teachers’ Superannuation Fund, a final-salary scheme. The ten largest pensions in this scheme ranged from £49,000 to £79,000 per year, the response stated.
Deputy Ahier said that the Corporate Services Scrutiny Panel had considered initiating a review into the matter but had run out of time during the term of the current Assembly. He said the subject was likely to form part of the panel’s legacy review, which would be compiled over the coming months and presented to the new Council of Ministers and to the politicians making up the new Scrutiny panel following the general election in June.
Former Senator Ben Shenton said that public sector pension arrangements were ‘out of sync’ with the private sector, leaving the taxpayer to foot the bill. He said the 2015 changes had not made a significant difference to this.
‘A final-salary-pension scheme is unaffordable, and the appetite for [further] change isn’t there,’ he added. ‘I did try to tackle this when I was in the States, but it was like asking turkeys to vote for Christmas.’
Deputy Geoff Southern said that providing attractive pension arrangements was a necessity because the Island was an expensive place to live.
‘You’ve got to pay people an attractive rate, including their pension, if you want high-quality teachers, nurses, doctors and civil servants to come here,’ he said.
Deputy Southern referred to a recent confirmation from the Health Department about having more than 350 vacancies as evidence of the continued challenges in recruiting staff.
