From the TUC

Terry Rooney is wrong about top public sector pensions

07 Sep 2009, by in Pensions & Investment

I’ve got huge respect for Labour MP Terry Rooney. He’s done a fine job as chair of the Commons DWP select committee, and its reports have been very helpful in much TUC campaigning.

But his call for a cap on public sector pensions is wrong and unhelpful. For a start it feeds the anti-public sector pension campaign. There are very few big public pensions in payment (and none in the Fred Goodwin class), but that is not what the TPA and allies would have us believe.

But the key difference between public sector pensions and fat-cat private sector pensions is that top public servants are members of the same scheme as their staff (with the exception of judges and MPs).  Indeed in some public sector schemes that cover a wide range of pay grades contributions are graduated. Better paid staff make higher percentage contributions.

Now, there has been a growth in pay in some top public sector jobs. It must be said though that this is way behind the growth of directors’ pay in the private sector.  Personally I deplore this widening of incomes across society, though whether the public sector can be completely immune from this is another matter.

But what I do know is that, given that the underlying pension schemes are basically fair, if you think someone is getting too big a pension, your point is really about their  pay.

One Response to Terry Rooney is wrong about top public sector pensions

  1. Will Osborne’s cap on top public sector pensions reduce the deficit? | ToUChstone blog: A public policy blog from the TUC
    Oct 7th 2009, 11:07 am

    […] or not you think this is a good idea (and Labour MPs have also supported such a cap in the past), it won’t have much impact on the deficit.  Very […]