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Tuesday, 21 June 2011

Public sector pensions - time for a more informed debate

I think something needs to be said about the paucity of the radio debates I've been listening to about 'public sector' pensions.  


Most commentators lump all public sector employees, and therefore their pensions, together. I am no expert (there, I've said it), but many public sector schemes are contributary and some are not. Does anybody out there know which pension is on which list? I could guess, but not a single commentator on the radio has made this distinction in terms. All schemes in the public sector are not equal and neither are the inputs/outcomes/exposure. 


Whilst there are a few hundred employees in local government who earn over £100,000 per annum, and most richly deserve a proper remuneration for the breadth and complexity of their leadership and management portfolios, there are thousands on such salaries in the NHS. Their pensions are commensurately different. As reported in a national newspaper this week, local government officers' average pension in 2009/10 was £4,052; a civil servant's £6,199 and a teacher's, £9,806. Surgeons and doctors get around £37,000 p/a on average, but they only make up about 1% of NHS pension recipients. A progressive local government career in anything but the largest of authorities will yield a pension broadly similar to that of a police constable. I make no judgement on these numbers, simply point out that even this basic level of comparative information has not made it onto the airwaves I have been listening to. 


This needs to be a much better informed and balanced debate - at the moment the lack of quality information and a positive presentation simply allows a vacuum to develop into which disinformation (some of it from Government), opinion, prejudice and envy flood in. Just as public services have borne the financial brunt of the failures of extravagantly remunerated bankers, so seem pubic servants' pensions demonised to justify further cuts. 


Whilst many private sector employees find themselves with similarly low pensions, but assume many of their public sector counterparts are much more highly rewarded than they actually are, the 'average' former FTSE 100 director's pension in 2009 was £248,000 per annum. 

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