Dear Editor, One aspect of the current pensions dispute I have not heard covered is the actual cost to the state of providing public sector pensions.
Consider – in the private sector when the pension is being paid it is subject to income tax. This goes to the government. The cost of providing the pension is the amount the pensioner actually receives plus the tax.
In the public sector, this tax is paid back to the pension provider, the government so that the cost to the government is off-set by the amount it gets back in tax. The cost of providing the pension to public sector workers is therefore not the gross amount but the net amount after the tax has been recouped.
Phil Bright
Sutton Coldfield
