Ministers are urged to tackle Lothian pensions time bomb

Published on Tuesday 20 January 2009 08:49

CAMPAIGNERS have called on the Government to tackle Lothian's pensions "time bomb" after it was revealed scores of Edinburgh's civil servants have retired with pension packages worth £1 million.

Figures obtained by the Evening News show how some of Edinburgh's former public sector workers are on annual pensions worth up to 70,000 a year. There are 156 retired members of the Lothian Pension Fund (LPF) who receive an annual pension of at least 33,000.

Nearly all of Lothian's public sector workers enjoy final-salary pensions, which are a mix of contributory and non-contributory, and pay out a guaranteed annual amount based on length of service and final salary.

The majority of private sector final-salary schemes, however, have been closed to new members in recent years, because of cost.

Opposition politicians and campaign groups today said the taxpayer could not afford to keep paying for the "gold-plated" public sector pensions and called on the schemes to be brought in line with the private sector.

Matthew Elliott, chief executive of the pressure group, the Taxpayers' Alliance said: "As more and more private sector workers struggle to afford any pension for their own retirement, the public sector continues to hand out record numbers of gold-plated, million-pound pension pots. It's high time the pensions apartheid was brought to an end, and the massive financial burden on hard-pressed taxpayers was reduced."

The Lothian Pension Fund is one of the largest in the UK, covering Edinburgh, East Lothian, Midlothian and West Lothian councils and Lothian Buses. It has 67,000 members and handles billions of pounds worth of assets.

The highest annual pension pay-out by the LPF is 70,466.

Cameron Rose, the city's Tory finance spokesman, and a trustee of the LPF, said: "Public sector pension affordability is a ticking time bomb and the nettle needs to be grasped by the Scottish Government.

"The biggest threat to public sector pensions is a political one stemming from their unaffordability."

"We have been living beyond our means and the Scottish Government needs to address the affordability issue."

A Scottish Government spokesman added: "The Scottish Government has always been clear that our priority is value for taxpayers' money.

"That's why we have, for example, used our powers to introduce changes to the NHS Pension Scheme which are designed to ensure it is affordable and sustainable, as well as fairer for employers, scheme members and taxpayers."