Public pension reforms may prove hard to stomach

Public sector employees continue to be villified as if they have committed some kind of criminal offence by doing no more than contributing to their employers' pension schemes which were devised by Government and offered to Government employees.

It's not their fault the schemes are generous ( an adjective not usually used in conjunction with public sector pay) and it's not their fault that the Government now want to rat on the deal. But it is the employees who are going to be expected to pay more and give up pension benefits, the prospect of which may well have been the main reason they stayed in a public sector career

In my mind, a deal is a deal and once hands have been shaken you can't pull out of it because it doesn't suit you any more..... that's called a breach of contract although I'm sure the wonderful British Government, renowned the world over for playing a straight bat (yeahhh?) will already have some way of weaselling out of that one.

Anonymous 1's comment is a ridiculous rant. The "wonderful British Government" doesnt have any money; it all comes from the wonderful British Taxpayer who in fuure will be our children. I speak as a public sector employee who recognises that public/private sector pensions have got to be brought more into line with eachother, not only to be fair but also seen tobe fair.

I posted this on another Citywire page "Public sector pensions likened to ‘Ponzi scheme’"

The very generous deal for those nearing retirement has to be paid for by Joe Public.

I know a fireman who was promoted to shift manager or watch manager a couple of years before he retired. My guess is that his pay increased by £3000/year for 2 years. He may have paid an extra £540 in pensions contributions (£6000 x 9%). His pension may increase by £2,000/year if he retires on 2/3rds final salary. If he lives for another 25 yrs, then he gets £50,000 index linked over his lifetime.

Extra pension contributions = £540

Additional pension = £50,000

I know a senior police officer who is applying for the next rung of the ladder. Let's say that her salary increases by £5,000/year and that she pays 9% of her salary for 2 years before she retires - she pays £900 additional pension contributions. If she then retires on 2/3rds final salary and lives for 25 years, then her pension will increase by £5,000 x 2/3 x 25 yrs = £83,333.

Extra pension contributions = £900

Additional pension = £83,333

These massive costs have to be paid for by young graduates who are now having difficulty getting a job - having left university with £20,000 debt!!

I used to be in favour of the combination of

raising the normal retirement age and switching to a career average scheme. A career average scheme would hit hardest those who get pay rises late in their career.

Unfortunately Osborne and Webb have messed up the decision by switching from RPI to CPI. A career average scheme where the benefits which are accrued each year are uprated by CPI is a really bad scheme for those who get no such pay rises.

Osborne and Webb are very stupid individuals.

Public sector workers must not have better peneion benefits then the private sector !!,it's taxpayers money they should all from today have the normal retirement age 65 imposed.

They have no right at all to have such generous pension arrangements,typical of civil servants/ council workers and of course MP's,to be better off then the people who pay there salaries.

It needs sorting out now, it's out of control, if the above were in a private sector business,the business would be broke by now.

Nigel D Snowden

Anonymous 1 is living on a different planet. Our Government has the ability and duty to change whatever rules are necessary for the public good.

As far as "contracts" go Brown increased the tax on funded pension schemes, which included tax on existing pension pots. Personal pension holders had no way of pulling their funds out even though the rules had changed. If one had saved like crazy, denying oneself many luxuries such as holidays and nice cars, then one's pot could be several hundred K (each 100k will buy about £3.5k of 3% indexed pension so this fund would not be excessive). Over the past 14 years the extra tax on this is very considerable. Meanwhile those in DB schemes have any shortfall made up by the taxpayer, including those who have already seen there DC schemes hit.

Quite simply, as stated above, the UK cannot afford generous DB schemes any more, and cannot tolerate the growing division between DB and other schemes. Those in DC schemes have seen their benefits more than halve from what they were told when they joined their schemes.

I just cannot understand why so many people think that existing DB schemes should be unchanged. They are denying the facts. As noted above, many of the costs of final salary schemes are quite mind boggling, but those who are entitled to them understandably refuse to acknowledge this.

Anonymous 1 obviously works in the public or he/she would know that the Government has already "ratted" on private sector pensioners, again and again. Why should public sector employees get special treatment. They already get great expenses, long holidays, plus sick and shopping leave and regular meals out at the taxpayers expense. They can claim bullying or stress or any other condition they can think up, go to a doctor or Human Resources and get leave of absence until numerous committees sit and ponder on their case, real or imagined. The whole process can be kept going for months and months while they are off on full pay

They also have what most private sector employees could only dream about; security of employment.

Stop whinging or join the bankers and go abroad.

Judging by that diatribe it seems GF is the one doing the whinging, If work in the public sector is as you describe why aren't you working there? As for ' security of employment ' I think maybe you should check the news.

I have spent most of my working life on a public sector contract, though with long periods seconded into the private sector. The UK public sector thinks it is hard done by, but anyone who has had to engage with local governmemnt, civil service or quango personnel at just about any level will know whether or not they merit their conditions of employment. And it's a long, long time since the trade-off of lower pay for more assured pensions had any basis in reality. Private sector pay on mode and mean values is generally lower than public sector.

This is not just a folly of Labour governments. The Thatcher government created more quangos than it destroyed. Most governments do, because they are useful whipping boys to have carry out your dirty work at one remove. However, the downside has been the creation of a client-group Salariat that depends on the public tit, paid for by the wealth-creating end of the economy. While it is true that the public sector generates the need for private sector supplied goods and services, this is only an indirect cretaion of wealth. No-one in a regulatory role in the public sector adds one penny of wealth to the nation. All they do is redistribute the income created elsewhere. No serious analysis will come up with anything different. Nothing about this will change soon, despite the rhetoric. It's all become too big for any government to change. However, if by some chance some government cut through the Gordian Knot and properly cut the public sector to 25-30% of spending rather than 50%, who would pay the benefits cost of the majority of those displaced who could not find similar employment elsewhere? Look in the mirror.

Gloria Franklin is entirely wrong. I do not work in the public sector. In fact I am a self employed tradesman. With no employer to add to it, my small pension pot is entirely self funded. I'm in for a pretty thin time when I eventually retire, not that I can see the day that I will ever be able to afford to. I pay my taxes happily in the knowledge that, at least, the hospital workers, social workers, council employees and a whole raft of people who contribute so much to our quality of life will be able to retire in some comfort.

Now, what was that she was saying about "whinging"?