Budget 2016: Osborne hits public sector employers with £2bn pension tax rise
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Public sector employers face an increased bill of £2bn per year to fund public sector pensions.
Public sector employers face an increased bill of £2bn per year by 2019-20 to meet the demands of funding public sector pensions.
The change to the discount rate was announced by chancellor George Osborne when delivering the Budget.
He said the move was intended to keep public sector pensions sustainable.
“To ensure those pensions remain sustainable, we have carried out the regular revaluation of the discount rate and public sector employer contributions will rise as a result. This will not affect anyone’s pension, and will be affordable within spending plans that are benefitting from the fiscal windfall of lower inflation,” he said.
According to the Budget documents, the move will cost public sector employers £1.97bn in 2019-20 and an estimated £2.005bn in 2020-21.