Two-tier pensions

Published on Sunday 23 August 2009 22:22

RESEARCH has revealed that within three years half of UK private companies with final salary pension schemes will be closed to existing members. Jenny Stewart's article Public sector may have to face ten tough years, 18 August) was very timely and in particular her reference to public sector pensions.

This article highlighted that some 80 per cent of public sector employees are in a final salary scheme. This is 60 per cent greater than the private sector, currently at 20 per cent.

National government and local authorities are funded by taxpayers in various forms. Perhaps the time has come for councils and other public bodies which offer enhanced final salary schemes to their employees to publish figures showing the annual income through employee pension contributions and the outgoing.

In the markets' current financial predicament, how can one paying 6 per cent pension contributions expect a half-salary pension? But who can blame public sector employees for saying thank-you to such a lucrative pension deal and defending it vigorously.

The Westminster government, in recognising the ageing population, is planning to raise the retirement age for all due to the national pension debt burden. This is in contrast to the current scenario for many public sector employees who can retire at 60 on full pension rights immediately, or even receive an early retirement package and then go on to exploit the system in taking up positions with the very same authorities. This scenario cannot be allowed to continue, as it is creating a two-tier system of pensioner.

CATRIONA C CLARK

Hawthorn Drive

Falkirk