MPs' pension hypocrisy comes as no surprise

Sadly "New Labour" has created an environment where "no one" in the public sector or indeed in the FSA is accountable anymore or has any responsibility for their mistakes. MP's are no diferent, except that in Iceland they are actually thinking of toaking their previous Prime Minister and other MP's to court for their failure in the financial crisis.

Shame we havn't got the guts or will to do the same. I can think of quite a few names who should be brought to task.

The Coalition Government is showing itself to lack any real back bone where it counts and we will continue to suffer until "responsibility" is brought back in to our society and that no one and no organisation (such as the FSA) is above the common law of the land.

Seems a shame to spoil the MPs' pension scheme - after all the trouble they went to a few years ago to award themselves the most generous accrual rate on the planet!

The sad fact is that the UK can no longer afford to fund Public Sector final salary schemes. This should apply to any public sector employee. Exceptions would create a feeling of even more inequality.

Graham Bond

www.consilium-ifa.co.uk

We will be seeing MP's join the TUC and voting with their feet on the streets of the Capital in protest at the cuts in spending if their pensions are attacked?

Following up Michael's comment wouldn't it be good to have a Select Commons enquiry into the actions of MP's in respect of the Credit Crunch etc - just like they did for the CEO's of the banks last year.

"So Mr Green what experience do you have of running an economy - have you any experience of working in the private sector???"

I think that MPs should all lose their final salary pensions and instead be given stakeholders. Then they'll find out how good they are.

The UK can no longer afford to fund Public Sector pension schemes, according to Graham Bond. A quick search shows that an ambulance driver's salary is around £16,000 per year. They then have the gall to ask for a pension of HALF that amount after 40 years work. Appalling.

I am an IFA as perhaps is Graham - fancy swapping jobs with the ambulance driver then?

I thought this new coalition Government would lead by example - pay cuts etc for the very reason that they could NOT be accused of 'do as I say, not as I do' politics. If MPs somehow exempt themselves from any pension reductions then the true coulours will come through.

Final salary schemes have been abandoned over many years by the private sector as they are unsustainable in current society. I'd like to see nurses, teachers and police etc retaining some generous pension benefits as they really do work for us.

I'd also like to see MPs and Civil Servants providing true 'public service' and taking their own medicine. Government brought us Stakeholder, and now NEST - so why isn't it good enough for them?

We shouldn't have taxpayer-funded DB schemes at all any more - the writing was on the wall 10 years ago. THis whole argument proves that there is a cultural greed at the heart of the bloated public sector which has forgotten its purpose - ie PUBLIC SERVICE !!!!

Michelle this is a good story.

Peter I think you are quite correct. The MPs and all civil servants should be from a point in time. Lets say Dec 2012 given the option of reduced terms on their scheme with a cap on benfits and/or the option to have their own money purchase scheme via stakeholder.

Most very geneorus employers, I use the word generous as they have been very generous over the years to support final salray schemes which have been enhanced upon enhancment over the years but now can nolonger support the committments they have accrued, have had to close scheme to new and existing members, and all new members can only opt for the money purchase option. these employers would be bankrupt if they were to continue with the DB schemes.

So we have a public sector in an unfunded scheme where the tax payer, most of whom have had to forego their scheme, as noted above, continuing to pay the benefits for those in this unfunded sector. If they had to comply to the same accounting for the deficit on the contributions being received, would they be solvent?

The MPs in this government should show great leadership and as Peter suggest, move their geneorus packages across to stakeholder. {this is purely comment and not finanical advice, of course if they would like to come and see me on a fee basis I will glad give individual advice}

All final salary pensions to MPs and public servants should stop immediately.

Many years ago, MPs were people who had worked for many years, done their stint and learned about life, and now wanted to offer something back to the country. They would have accrued a pension elsewhere in the normal course of events.

Nowadays, being an MP is part of a political career that starts when entering University or perhaps joining a union. Very few ever experience the cold reality of real life, going from research assistant or local councilor to MP without having to learn anything or about anything other than their political dogma, which they rely on to provide them with a living. Rather like a career in one or other religion, only somewhat better paid, in the main.

And similarly to a religion, you can't question the dogma because it has to be believed without any evidence, and you have to "respect" the person concerned because they are true believers and always behave with absolute integrity and for the good of others, not themselves.

If MP's pensions become a special case, it will just reinforce my belief that our political masters are just the other end of the spectrum that comprises lairs, rogues, cheats and criminals, and the end that is not quite so visible.

I predicted this privately to friends when the announcement about intended reform of Public Sector Pensions was originally announced. Why am I not surprised?!! Same old same old. Don't do as we do - just do as you are told!!

In just starting my 34th year in the financial planning business, the only thing that's changed about our nation's long term pensions problem, since I can remember, is that it has just got progressively worse !

The main reason for this, in my view, is that the people who make the rules do not really understand/appreciate the problem - because the issues have never applied to them !

The problem is only ever likely to get properly solved when we are all in the same boat paddling together.

I wil be extremely disappointed if this government is allowed to make themselves exempt as suggested and I just hope that Michelle and her fellow reporters will do their utmost to bring this to the attention of as many people as possible who may then shame them into doing the right thing.

Evidently, we are not all in it together...

It seems somewhat sad that the new muppets in charge fall into the old cliche of blaming all the ills of the day on the last lot in charge (as the last lot did, blaming their predecessors), whilst lining their pockets in the meantime. I think the issue is all those career politicans who have never lived or worked out of the Westminster nursery. (I know its meant to be called the village because they are all competing to be the chief village idiot, but nursery seems to sum them up better).

Clearly there is a very strong case for MP's leading by example and there is no reasonable justification for them being exempt from such a review of public sector pensions. Especially when you consider that unlike most other public sector workers many of them often have significant other perks such as generous expenses allowances, other sources of income from numerous "outside interests" such as sitting on the board of big PLC's as non-executive Directors or advisers, as well as having the ability to earn huge sums after retiring as MP's in doing the after dinner speaking circuit (which lets not forget, they would not be able to do if they had not been elected to serve the public as MP's in the first place).

As a result of all these other multiple income streams that are often available to MP's, their need for good solid Final Salary Pensions is arguably much less than that of say, a lowly paid junior civil servant / public sector worker such as a Nurse, or an Ambulence driver, who is bound to be much more reliant on a decent Final Salary pension in order to live a comfortable retirement and not be dependent on means tested State Benefits such as Pension Credit, and ultimately the tax payer, .

It is very easy, especially for public sector employees, most of whom lost their final salary pensions years ago, to jump on the "that's unfair why should public sector workers get decent Final Salary Pensions when we have to have Money Purchase" bandwaggon, without thinking about the wider implications of this arguement, which I feel is at best over simplistic and at worst, mealy mouthed and taking revenge on many public sector workers who did not create this pensions problem which we all now face.

Lets not forget, many public sector workers earn pretty low basic salary's and many do quite hard physically and mentally demanding jobs, such as Nurses, Ambulance Drivers, Teachers etc. I am not saying that Private Sector employees do not work hard either, but traditionally, a good Final Salary pension has been seen as a sort of trade off for the fact that many public sector workers accept a lower wage than they could perhaps be earning in the private sector, which they only put up with in favour of the historically greater job security and better pension than they could expect from the private sector. If that situation is eroded then you have to consider what effect that will not only have on recruitment and retention within the public sector, especially at lower Grades / Salary levels, but also the possible greater demand on State Benefits that will ensue as many of these workers will then be retiring on inadequate pensions. And all of this at a time when the new Coalition Government and the public mood is one of trying to reduce the burden of the Welfare bill on the tax payer. The two just don't equate.

Therefore, a far more sensible and much fairer approach all round, would I feel be to not just do away with Final Salary Pensions for all Public Sector workers carte blanche. But rather to keep them for lower grade / earners within the Public Sector, to avoid the above problems I alude to, whilst also replacing them with a Money Puchase or some sort of Hybrid Scheme for Senior Civil Servants and any Public Sector workers earning over a certain amount - say £40,000 maybe. My understanding is that the number of higher earning Civl Servants and Public Sector workers has increased significantly in recent years, so this should at least help resolve this problem, by reducing the deficit of such schemes without shifting the burden onto the tax payer through a greater welfare benefits bill.

However, to prevent the threat of massive industrial action within the public sector for any changes to pension arrangements, MP's must lead by example and scrap their generous Final Salary Pension first! I would have thought this was obvious. There is an old saying that "When the leaders are leading the followers will follow"! MP's - take note!

Sorry Guys I can’t resist - I told you so. The last election was indeed a choice between Syphilis and Gonorrhoea. If I’m not mistaken a greater proportion of the electorate abstained than any of the votes case for any of the parties. Amway it’s high time we stopped calling them Parties. They have partied long enough at our expense.

Let’s have a competition – am prize for the best alternative noun.

I’ll start – A Wart of Politicians.

They must include themselves in this.

There will be a riot if they try and put this through.

It is true though it is unaffordable, mainly because the public sector has ran out of control, too much money syphoned away from where it is needed and wasteful stuff elsewhere.

The public sector needs moving back to a basic safety net and to look after our surroundings and education properly with long term development plans which can be afforded on technological and infrastructure improvements with plans to get out of debt and stay out of it. It cannot be everything to everybody.