WHEN an employers’ body accepts – albeit reluctantly – that its members must pay more to solve the ‘pensions puzzle’ it is reasonable to expect States members to agree.
No one wants to contribute more. But the gap between what is being paid into the pension pot and what is being taken out is now so huge that the £500m. fund will be empty in 30 years.
That implies penury for anyone past working age who has not built their own private scheme either because they earned too little or were foolhardy and did not save what they had.
At a stroke, the island would condemn thousands of its most vulnerable citizens to a world of a century ago, before the UK passed the Old Age Pension Act in 1909.
That cannot be allowed to happen, and Social Security fought a partially successful battle last week to redress the balance.
Their philosophy was relatively simple. Everyone except the poorest shares a bit of the pain. So the pension age was raised by two years, higher earners pay more, wealthy retirees pay more and, finally,  employers pay more.
The 0.5% rise to 7% for businesses – worth £5m. a year to the fund – was described by Social Security as an ‘essential part of the measures to sustain the financial sustainability of the fund’.
Many, including Treasury and Resources, wanted employers to shoulder far more of the burden. In the UK and Isle of Man it is already as high as 12.8%, with no upper earnings limit.
A big rise would go some way towards redressing the imbalance created by zero-10 when the States started shifting the taxation load away from companies and onto the individual.
Social Security resisted that, fearing adding unwanted costs to business at a time when profits are already hard to come by.
The Assembly knew better and went one step further. In a move reminiscent of the days when the States was regarded as an employers’ club it knocked one leg of Social Security’s plans away.
Worse, no new proposals came forward to balance the books once the employers’ contribution was gone.
So just who will fill the hole? And when?