Quite: and that the public sector nearly exclusively now has those higher cost schemes is something that the taxpayers are paying for, no? So would usefully be counted as a cost to the taxpayers over and above the DC schemes which now prevail in the private sector?

To start from the beginning again. The TUC figures point to the cost to taxpayers of the current tax subsidy that must be paid for currently unfunded public sector pensions. That gap between current contributions (employer and employee) amassing future pension rights and the pensions currently being paid of £4 billion a year.

This is of course the lowest (which is why it was picked) of all the possible numbers we could use to determine the cost of public sector pensions.

More enlightening numbers would include perhaps what is the current value of future such unfunded pensions. And also an interesting figure would be, what is the higher cost to taxpayers of DB pensions in the public sector as opposed to the DC pensions now overwhelmingly what is available in the private sector.

That last is definitely a cost to the taxpayer of public sector pensions, is it not?

According to the NAPF the average employer contribution to a private sector DB scheme is 15.6%.
http://www.napf.co.uk/Policy/KeyFacts/Workplace_Pensions.cfm

The Taxpayers Alliance reckon the equivalent in the local govt scheme is 12%. (I actually think it’s more like 14%, but hey)
http://tpa.typepad.com/home/files/council_spending_uncovered_3_pension_contributions.pdf

In fact if you think about it you ought to expect the average contribution in many private sector DB schemes to be higher, because many of them are winding up and have to pay off the deficits they are facing whereas open schemes have a bit more leeway.

Obviously the average employer contribution to a private sector DC scheme is much lower. But all that tells you is that much less generous schemes have lower costs.

Of course it is: it’s certainly a cost paid by the taxpayers.

Especially when (as I very strongly suspect but can’t be bothered to google up) the employer’s contribution to a public sector pension is very much higher than the private sector employers contribution to a pension.

“The difference is even more stark if one calculates how much the government should be charging departments for their pension schemes. At the moment, this charge is 18% of payroll;”

“Furthermore, employers tend to pay in less: around 6.5% of payroll.”

http://www.economist.com/displaystory.cfm?story_id=13983688

Sure looks like a subsidy to me.

“As I said there is a strong case for some tax relief on pensions, but given that they are the only form of savings uniquely privileged with full tax relief it seems perfectly reasonable to ask whether it is all justified or well-targetted.”

It’s tax deferment, not relief. And as such, if you reduce the relief to basic rate (say) then there’s a very strong moral case that the tax on what comes out of the pension pot should also be limited to basic rate.

A suggestion which would no doubt shake out of the Treasury that number we’re both interested in.

However, a much more interesting point now arises.

“I know of no source showing any breakdown by income of the tax paid on pensions in payment.”

You mean that you and the TUC are suggesting changes in hte taxation of pensions without actually having any clue what the actual amount of the subsidy to top pensions is?

Way to go, proposing policy in such an uninformed manner.

Your logic leads to seeing that part of pay going to the pension scheme as a pensions subsidy from tax payers. It isn’t – just as when a nurse buys a bar of chocolate it is not a tax payer’s subsidy to the chocolate industry.

But, unlike any of the attacks on public sector pensions that I have seen we discuss, the difficulties of measuring the cost of pensions commitments that go into far into the future, including the limitations of the “net cost of pensions” measure. We also look at estimates of the total cost of pensions in payment as a share of GDP going into the future. Treasury estimates show some increase through to 2017 but then stability.

I know of no source showing any breakdown by income of the tax paid on pensions in payment. I’d like to see one too.

But I suspect that many pensioners will find it hard to accept that only those who were in the top few per cent of income earners when working are the only ones who pay tax on their pensions.

As I said there is a strong case for some tax relief on pensions, but given that they are the only form of savings uniquely privileged with full tax relief it seems perfectly reasonable to ask whether it is all justified or well-targetted.

It may be that the best approach comes from the TUC proposal for minimum tax rates for those earning more than £100,000. This would work by saying that those earning between £100,000 and £150,000 could not use reliefs and tax planning to reduce the tax they pay below a minimum rate of perhaps 32 per cent. There would be higher minimum rates for higher income bands. This, a sort of graduated progressive flat tax if you like, would massively simplify the tax system and make it much more fair.

It would be interesting to see you rebut the point I made over there. That the above is so wrong as to be deliberately misleading.

The £ 4 billion (ie, the £1 in the above) is only what the taxpayer is paying to fill the unfunded gap between contributions and payouts this year from those schemes which do not run a funded operation.

That is, it is only the gap between contributions collected this year from members of pay as you go schemes (plus, of course, the taxpayers’ contribution to the employers part of such contributions) and the money paid out to current pensioners of such schemes.

What you’ve entirely left out is the following: the taxpayers’ contributions to such pay as you go schemes which appear as the employers contributions (a very large sum indeed) plus also any deficits in those schemes which are supposedly funded by investments but which, like almost all current pension schemes, have deficits.

Sorry, but your playing with the numbers here is tantamount to lying.

There’s one number that I’m hugely interested in. There’s, as you say, £10 billion going in pensions tax relief to the top 1%. There’s also £10 billion being raised in taxation on pensions….for pensions are as you agree taxable.

So, what percentage of that £10 billion in tax raised is coming from those fat cats in the top 1%? I would assume that it’s most of it actually, as it will be those fat cats that have pensions high enough that they pay the full 40% whack on it, no? (Compared to the say, 47% including NI relief they’ve had when they pay in).

If, say, 90% of the £10 billion in tax raised is coming from those who in years past were the same people who were getting the £10 billion in reliefs (and of course with inflation etc they would have got less than that) then it all seems to be a very minor problem.

If only 1% of the tax raised is coming from those fat cat pensions that got the £10 billion reliefs then of course this is more of a problem.

So, what is the number? What percentage of the tax paid comes from the pensions of those top 1%?

And yes, I do think you owe me an answer.