NHS pensions currently cost taxpayers the equivalent of 82pc of salaries, more than six times what even the highest earning workers actually pay in.
It comes as some schools are also offering pay rises for staff willing to leave the generous Teachers’ Pension Scheme amid long term funding concerns.
Unions have defended the schemes and say they are “anything but excessive”.
Salary-linked pension schemes in the private sector must have enough assets to fund the projected amount they will pay out, known as their pension liabilities. They are regularly valued and if they’re not sufficiently funded, a recovery plan is required.
Public sector pensions, however, are exempt. It means that contributions made by employers and employees are not set aside, let alone invested in a fund to pay future pensions.
Instead, retirees are paid from current tax income. This has stored up a series of potential problems – which could one day threaten the entire system, Mr Record said.
The first is that contributions do not cover pensions payments. The Government spent £45bn on approximately 5.3 million pensions in 2022-23, according to the Treasury’s latest analysis. The largest four schemes are for the civil service, armed forces, NHS and teachers.
Public sector workers and their employers made £44bn in contributions, leaving a net cost of £1bn to the taxpayer, around £37 a household. This pension pay gap figure hit £10bn in 2019 – or £357 per household.