Near-final valuations from the Government Actuarys department are expected to show that current contribution rates are insufficient to meet the future costs of public sector pensions, the Treasury said today.
It warned public sector employers across in the civil service, NHS and education, that they would need to increase their contributions. Without a change, there would be a nearly £1bn a year shortfall across the teachers', civil service and NHS pension schemes.
Final results from the GAD's valuation exercise will be published in the coming months and changes to employer contribution rates will come into force in 2015, the Treasury said.
Chief Secretary to the Treasury Danny Alexander also published details of a new cost cap mechanism for reformed public service pension schemes.
This has been designed to ensure long-term costs are controlled, providing protection for the taxpayer and ensuring that the risks of changes in costs are shared equitably with scheme members and employers.
'Ongoing analysis of what is a fair contribution is the final stage of the reforms, which will ensure that long-term costs of public service pensions remain under control and are fairly distributed between employees, employers and taxpayer,' Alexander said.
