Monday, 27 June 2011

Public Sector Pension Debate

The following figures and discussion do not take into effect growth and inflation but represent a simplistic, though reasonably realistic view of the pension debate.
In order to achieve a pension of, say £20,000 it is necessary to have a pension fund of £400,000. During as 40 year working life is would be necessary to pay the equivalent to £10000 per year which would be approximately 10% of a £40,000 salary.
In the private sector, where in many cases employees have also suffered a pay freeze for 2 or 3 years, large numbers of employees have had their final salary pension schemes closed and frozen and only money purchase schemes made available.
Those who have had their final salary schemes left open have had to pay increased contributions to safeguard their final pension. In my case my contributions went from 8% to 13%.
The public sector in the past traditionally had lower wages and generous pension with low contributions (in many cases zero contributions). The lower wages argument is no longer valid.  For example any movement in national minimum wage will not affect public sector workers  as most have national agreements well in excess of the national minimum wage.
The argument that pensions should be exceptionally attractive is no longer relevant as work pressures in the private sector are much higher than they were and working longer for their pensions is not an attractive proposition.
The Public Sector can no longer rely on the private sector to safeguard their futures by paying higher taxes.
It is time the public sector workers got away from political and union rhetoric and dogma and started to think pragmatically and logically about the general situation. There is no such thing as “Government Money” – it is our money, earned by us and given to the government to look after our infrastructure and needs while we generate more money.
Yes, these current measures are unpleasant but will have to be made as we, the general public and silent majority are no longer prepared to reduce our disposable income for the public sector workers.
So come on you silent majority and make your voices heard. STAND UP AND PROTECT our FUTURES and let these who would like to blackmail us into submission that they have to contribute the same way as the rest of the British workers.

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