The unions' pension myths

Russell

Matthew, really..."with most of the cost paid for by taxpayers".

ALL of public sector employees pensions are paid for by the privately employed taxpayer and private companies tax.

Public sector employee pension contribution and employer (government) contribution is paid for by the private sector, as are their wages, their tax deduction and NIC deduction.

If the private sector went on strike there would be no money for any public sector employees from PM to roadsweep.

They really do not understand.

Barry Williams

You let her get away with the 80th scheme claim. They also get 3/80th as a lump sum tax free on top of the pension. So a retiree on £30,000 after 40 years gets £15,000 plus £45,000 tax free on top, age 60 and fully indexed. No private firm can come close to that.

Andy H

it is long overdue for the Trade Unions to be tackled. there primary purpose has for many years not been the defense of the worker - the state has made that role redundant by implementing so much HR legislation.

the primary role of Unions these days is purely political.

If they were interested in defending peoples pensions, then why didn't they say anything in 1997 when Brown stole from the private pension pot?

Wilhelm 1

'' Do teachers deserve a better deal.''

No.

10 weeks holiday thats what they get a year. What teachers really need is a good old fashioned, horse whipping.

Brownloather

Public sector workers and their Union representatives leave me incandescent with rage. Their attitude towards those in the public sector is firstly taht we are morally superior to you because you work for grubby profiteering enterprises wheras we work exclusively for the public good. Second, you must work longer, pay more and receive less so that we can work less, pay less and receive more. The one positive aspect of the deficit is that we will eventually have to sack even more of these worthless, sanctimonious parasites in order to remain solvent. Hopefully, this will include David Milliband the most sanctimonious worthless parasite of the lot. Sorry, did I say David, I meant Ed. Easy mistake to make.

Woodbine Willy

No, Matthew, today you "debated (whatever it was you were discussing - the strike, presumably) [with]the president of the teachers' union.
Unless of course you were discussing the president with some un-named third party.

REPay

There are a lot of statistics that are being used out of context - see the Staggers web site. The one about the public sector pensions falling as a percentage of GDP is used to say the pensions will become more affordable. The real problem is that the policy makers and the public sector have too little skin in the economy...the rest of us are supposed to shut up and pay up.

PS If qualifications mean entitlement to higher pension can they will be index-linked to the UK's plummeting comparative performance? We have to pay for their training days too...often at the ritzier hotels...

Woody

One of my relatives works in a school and doesn't have a good word to say about teachers and their arrogant attitude.

disenfranchised

why is it that when i hear a hard-done-by regional bemoaning her union members' treatment at the hands of iniquitous metropolitans i want to do damage to my expensive flat screen?
matthew, my sympathies for having to try to debate with such people.....

clanger

...and the good old Beeb too. As Francis Maude was making his statement on the 'industrial action' after PMQs, the BBC was running a series of subtitles peddling exactly these self-same misleading figures.

daniel maris

We've been treated to this mendacious use of statistics before, from the same source.

The equating, by implication, of the teacher earning £30,000 with the average salary for public sector employees is another classic example.

The facts are that in a nation with per capita GDP (for adults) of something like £24,000 most pensioners are getting by on a per capita average of perhaps £8000 or less. Why? We should be looking to boost occupational pensions.

jason

maybe they should ask what the union bosses are on and if they went with out pay today? also they ask the unions if it is right for train drivers to eran so much for so little.

daniel maris

You might have thought you put in a brilliant TV performance mate but I can guarantee that the vast majority of the viewers will have been - how can I put this - somewhat irritated by the bogus reasonableness, selective statistics and Grant Schapps-style slickness.

The Taxpayers Alliance has no credibility.

fergus pickering

I thought he was much better than the old bag.

dorothy wilson

Surely there is another point about the "average" public sector pension.

If the unions are talking about the average of the pensions now being received that figure will include pensioners who are in their 70s and 80s. If their pensions were based on final salary the amount of that final salary would have been much lower than it would be today. Wouldn't that then affect the "average" pension figure?

Mark M

Very impressive. A full handle on the facts, well prepared to strike down her arguments.

And you're right. Using average figures is like saying "we need to lower taxes on the poor because the average person pays over £9,000 in tax and how can the poor afford afford that?"

In order to compare the deals, you have to compare like with like, something no-one supporting the strikes is doing.

Robert Williams

I am intrigued by the Union statement that uprating pensions by CPI rather than RPI (difference say 0.5%pa) results in a pension 15% lower. Do they mean after about 20 years of retirement, when the lower inflation proofing will have accumulated to 15%?

Scotty

I cannot beleive that anyone would think that the trade unions misrepresent the facts. They are always honorable and trustworthy and accurate, listen to the crow thug man, scargill the donkey lion killer, and barber the smug one - I am being sarcastic, honest.

daniel maris

The truth of the matter, just admitted by Francis Maude is that the cost of public sector pensions is falling as a proportion of the GDP. Not surprising given the job cuts.

Basically a big lie is being told. It's never good when governments tell big lies, whether they be about mass immigration, imported religions, population rise, per capita GDP - or public sector pensions.

If the economy is in such a bad way, why aren't the bankers and CEOs doing their bit by cutting their income by 5%?

Erica Blair

The so called 'Tax Payers Alliance' is a front for the Adam Smith Institute and other loony right groups, yes the geniuses who thought up the poll tax. Of course if they went under their real name they would be laughed off the screens.In fact one of their directors Andrew Heath was revealed as someone who didn't pay any UK tax.

Can we call them by their real name, he Tax Dodgers Alliance?

Sir Everard Dugby

Agin we enter an argument based upon bogus stats:

Argument 1 talks about some public sector pension funds having large surpluses which make them affordable. It does not.The fund has to account for future liabilities. Workforce expansion under Labour has improved cashflow into the 'fund' but also increased future liabilities. The two things should not be conflated. The future liabilities are the real issue.

Argument 2 is that public sector workers received less than average pay settlements under the Tories,so Labour's generosity was merely a catch up exercise. Except for the fact that the workforce also expanded a lot and added further to the future pension liabilities.
3. Argument 3 Private sector pensions have been under attack for over a decade; so much so that many people don't bother with them. Now the state is insisting that people are forced to join a scheme. Perhaps the state should have considered the potential consequences of this sustained attack before now?

There is no comparison between the private and public sector pension arrangements. Forget averages. Take an employee from each sector on the same earnings and compare what their pension would be assuming they work to retirement age. I am willing to bet 50p that the public sector one is higher.

So why should the private sector employee fund someone else's benefits to a level which is better than theirs?

Holly ......

Up the lowest pay a BIT.
Scrap public sector pensions and MAKE them buy their own....Just like the rest of the British public.

No more them & us, no more averages, no more 'how unfair is this to our hard workers'.
It would be one item crossed off the long list of public sector union bods moans
Privatising their reasons for complaining,
striking as they crop up would work wonders.

Bringing them into the same cr@p as the rest of the country are up to their necks in is now the only fair thing to do.

tb

Andy H asks
"If they were interested in defending peoples pensions, then why didn't they say anything in 1997 when Brown stole from the private pension pot?"

They did say something, they "Welcomed" the money being taken, leaving pensioners in poverty, and being given to them via increased government waste.

The TUC had their conference notes to view on their website up until recently when they realised that their hypocrisy would be noticed so they took them down unfortunately google cached the documents.

HJ

Daniel Maris:

"The truth of the matter, just admitted by Francis Maude is that the cost of public sector pensions is falling as a proportion of the GDP. Not surprising given the job cuts."

This claim has been made before by the trade unions and refuted by John Hutton.

The Hutton Report said that the cost would fall if the government's plans for reducing the size of the public sector were carried out, taking into account the switch from RPI to CPI into account and if his pension reform plans were enacted. Not otherwise.

These are the things that the trade unions are opposing - so if they had their way, the costs would rise as a proportion of GDP.

A little more honesty from Daniel Maris wouldn't go amiss.

El Sid

@SED You and others may want to look at this piece by DK for the size of pension pot someone in the real world would need to match state pensions. Someone in the private sector would have to contribute 20% of salary to get a similar pension to a NHS worker paying 9% of salary.

[hmm - won't post possibly because of a naughty word in the URL, you should be able to find it at Devil's Kitchen]

El Sid

@danielmaris The "bankers and CEOs" take their pay not from "the economy", but from a particular company. If that company is doing well, why shouldn't they enjoy the rewards? Conversely, I now several people in the private sector who took temporary pay cuts of 50-100% to help their company survive through the worst of 2008/09.

Government employees are not paid by "the economy" but by the government. The problem is the government finances being in a complete mess, and that is why government employees need to take their pay back to the shocking penury of 2006 levels.

daniel maris

El Sid,

Has RBS been doing well then?

Bankers and CEOs argue they are entitled to increased rewards whether companies are doing well or badly (if doing badly of course their huge pay - much larger in teh UK than in countries like Germany) is necessary to ensure they rescue the company from disaster.

You are very naive.

daniel maris

HJ -

No, the unions' claim has been backed by the Institute of Fiscal Studies. Hutton ignored two of three major reforms, hence his figures were wrong.

daniel maris

The Tax Payers Alliance's lies and misinformation have been effectively exposed. The public sector pensions burden is sustainable and is reducing. The amount of pensions is modest, even for those who work 30 years or more. Many public sector pension funds are fully solvent and have contributed to government funds in the past.

The latest evidence emerging is that young people will be able to opt out of these public sector pension schemes. When they do what happens - on reaching old age they will become a much greater burden on the state, unless the TPA suggests we allow them to starve in the street.

HJ

Daniel Maris -

On the contrary, I have read the Hutton report and you are incorrect.

Perhaps you'd point me to where the IFS supposedly backed the unions claims. They have form when it comes to falsely asserting that people back their claims. They made similar assertions about the Hutton report and Lord Hutton has since clearly refuted their claim and accused them of trying to mislead.