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The Pension fund pays out to retired employees, not current ones. Direct employees contribute to the pension and keep money coming, the more employees paying in, the easier it is to control the scheme's deficit. Outsourcing actually increases pension deficits because fewer and fewer direct employees are paying in to help support more and more retired staff. Of course, this is far from the whole story behind the pension deficit, or necessarily even the biggest single contributor, but it plays its part.
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