Financial Times FT.com

Pension costs deter outsourcers

By David Fickling

Published: June 8 2009 00:06 | Last updated: June 8 2009 00:06

Plans by the government to save money by spinning off work to private sector companies risk being derailed by ballooning public sector pension liabilities, says the UK outsourcing industry.

Companies are walking away from public sector contracts because they are being asked to pay pension costs running as high as 30 per cent of the wage bill when they transfer employees from the public sector.

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