Your report (30 March) highlighted Unison’s campaign against the government’s public sector pension reforms. Tam Waterson of Unison trotted out the “average NHS worker pension” argument; this chestnut cannot be allowed once again to go unchallenged in its irrelevance.
The average figures quoted in your article (£5,700 for males, £3,800 for females) arise from the two main variables of a) the employees’ length of service and b) their salary level in public sector employment. In comparison to the vast majority of those not in the public sector, these are very generous average pensions: in the private sector, they would be less than half of these sums. Public sector pensions are and will continue to be index-linked, unlike those of most ordinary mortals.
The reforms that the public sector detest so much will see the contribution for someone in the NHS on an average salary of £27,000 pay a slightly increased contribution of 8 per cent of salary (the lowest paid will bear no increase and even those on salaries of over £110,000 will still only pay the maximum contribution of 10.9 per cent).
Experts generally agree that for public sector employees to obtain what are generous pensions, they would need to contribute close to 40 per cent of their salary. Who funds the huge gap between members’ contribution and the real amount required?
Yes, you’ve got it – the taxpayer does. Maybe Mr Waterson will tell us what is fair about that.
David K Allan
Haddington, East Lothian
It IS strange that Douglas Yuill (Letters, 30 March) chooses to place all the blame on public servants for failing to regulate a private pension provider, Equitable Life, but does not apportion blame to the private provider who actually failed.
Instead of attacking public sector schemes as unaffordable, the attack should be against the private sector schemes being offered by our wonderful financial sector, who are over-dealing, charging exorbitant fees, paying out to shareholders and paying directors huge remunerations packages including “gold-plated” pensions, and also against companies that use their employees’ pension funds for private business needs.
The Scottish Local Government Pension Scheme (SLGPS) is fully funded and audited, taking into account current demographics, including current life expectancies.
It is a good example of a public pension scheme that is managed properly, with contributions ring-fenced and run for the benefit of the members. Instead of complaining about these, it is the private sector pensions that “don’t stack up”.
We should demand that the government has the courage to stand up to the private financial services sector and ensure schemes similar to the SLGPS are generally available to all.
Another letter berates public servants for having pensions schemes more valuable than those for private sector employees – and for trying hard to hang on to them.This was not by such a major issue a decade or more ago, when very many enterprises had their own final salary schemes and public service pay was often relatively poor.
Only when the UK’s economic woes built up, were employers’ provisions of pay and pensions cut back, ensuring that public provisions (even the many with personal contributions) began to look generous.
It could be thought inappropriate to penalise the public sector for the UK’s business and manufacturing companies’ financial woes, particularly when so many of the latter continued to splash out on their executives’ remunerations and pensions – and still do.