The History –The Government Unified Scheme (GUS) was introduced in 2012, following lengthy negotiation with staff.  It simplified the administration of some 15 different public sector pension schemes and increased some employee contributions, but made no substantial difference to their affordability or sustainability, nor indeed their fairness to taxpayers and the private sector. It followed tortuous negotiations with the unions and their members (and at a cost of well over £1 million, paid to the consultants Hymans Robertson). Shortly afterwards, it was proclaimed by government spin as a major success story, quite forgetting both the financial implications and that it constituted a desperately sad situation of "pensions apartheid" - dividing the public sector (where 90% of workers have a salary linked pension heavily subsidised by the taxpayer) against the private sector where less than 50% now apparently have any form of pension scheme applicable at all.

The Problems - Put in its simplest form, the problems with public sector pension schemes are two-fold – their funding arrangements and increasing life expectancy.

1. The schemes, with defined benefits relating essentially to salary and years of service, have origins dating back to the 1920’s and 1930’s – when life expectancy of approx 60 years was considerably shorter than today’s expectation of perhaps 85 years, and thus pensions – if paid at all - were paid for relatively short periods following retirement. 

2. As a result, staff pension contributions of typically 5% of pay, and matched by the employer, were historically sufficient to fund the liabilities of these schemes. However, because life expectancy has increased so significantly and so rapidly in the past 2-3 decades (with resultant increases in long-term pension payouts) but with funding arrangements (via employee and employer contributions) having remained unchanged, these schemes are today proving to be too generous, and requiring massive additional “top-ups” from the taxpayer.  They are thus unsustainable.

   More... Add new comment

'The real reason the 'Single Legal Entity' is being promoted locally is because senior civil servants in the Isle of Man sense an opportunity to grab more power from the politicians. The reason it is being promoted from Scotland is because of vested interests waiting in the wings to market, in the Isle of Man, lucrative performance management programmes created in America.'

Attachments:

File	File size	Downloads
Single Legal entity Consultation response	271 Kb	1554

There has been much controversy but little resolution as to how the upper chamber of Tynwald should be elected. However, one clear objective is apparent in that it must be publicly elected in the future – the electoral college route being deemed as anachronistic.

Keys members are jealous of their primary legislative role and are reluctant to sanction any election procedure which lessons their primacy. Council members on the whole do not want constituencies as they feel that they might then become bogged down by local problems.