Comments on: The CBI on public sector pensions http://touchstoneblog.org.uk/2008/12/the-cbi-on-public-sector-pensions/ Policy news and comment from the Trades Union Congress (TUC) Wed, 23 May 2012 15:08:19 +0000 hourly 1 By: Robert Day http://touchstoneblog.org.uk/2008/12/the-cbi-on-public-sector-pensions/comment-page-1/#comment-1023 Robert Day Mon, 29 Dec 2008 22:33:35 +0000 http://www.touchstoneblog.org.uk/?p=1532#comment-1023 What everyone forgets (and even supporters of the public sector forget to remember) is that in the Civil Service scheme, about 7% is shaved off the total paybill right at the top by the Treasury to help pay for all this before money gets handed down to Departments. Now, I'd be more likely to consider changing my pension arrangements if I got that 7% uplift in my salary so I could make alternative pension provision. And all this also forgets that public sector workers also pay taxes! I know that the deal is that a proportion of my taxes pays for the pensions of colleagues who have already retired. On that basis, I think that it's a reasonable expectation that my pension, when I finally get it, will be supported by colleagues still working. Those with long memories will recollect that the Divine Margaret huffed and puffed about the Civil Service pension scheme before coming into power, and engaged one of her cronies (Lord Sainsbury?) to investigate almost as soon as she moved into No.10. His conclusion was that given the balance of monies paid in and paid out under various budget heads, the scheme was as fair as any other alternative. I suspect that a lot of the sound and fury over the public sector pension bill comes ultimately from the private pension industry, where a small number of people appear to get very rich on administering private pensions and ultimately have their own interests at heart. As it takes more people to administer public sector pensions (whether occupational schemes or the State pension), the number of people who get "rich" through administering the scheme is larger, but the largesse they get given for administering the scheme is correspondingly smaller. Seems like a more equal redistribution of wealth to me. What everyone forgets (and even supporters of the public sector forget to remember) is that in the Civil Service scheme, about 7% is shaved off the total paybill right at the top by the Treasury to help pay for all this before money gets handed down to Departments. Now, I’d be more likely to consider changing my pension arrangements if I got that 7% uplift in my salary so I could make alternative pension provision.

And all this also forgets that public sector workers also pay taxes! I know that the deal is that a proportion of my taxes pays for the pensions of colleagues who have already retired. On that basis, I think that it’s a reasonable expectation that my pension, when I finally get it, will be supported by colleagues still working.

Those with long memories will recollect that the Divine Margaret huffed and puffed about the Civil Service pension scheme before coming into power, and engaged one of her cronies (Lord Sainsbury?) to investigate almost as soon as she moved into No.10. His conclusion was that given the balance of monies paid in and paid out under various budget heads, the scheme was as fair as any other alternative.

I suspect that a lot of the sound and fury over the public sector pension bill comes ultimately from the private pension industry, where a small number of people appear to get very rich on administering private pensions and ultimately have their own interests at heart. As it takes more people to administer public sector pensions (whether occupational schemes or the State pension), the number of people who get “rich” through administering the scheme is larger, but the largesse they get given for administering the scheme is correspondingly smaller. Seems like a more equal redistribution of wealth to me.

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