sharethis

Tuesday, November 06, 2012

You should work for your pension says the learned Lord Bichard.

Sorry - this is a bit of moan - very little marketing value!

My initial reaction to reading this chap's words of wisdom was 'not another nonentity trying to grab his 15 minutes of fame'.

Just before seeing his pronouncements I had read research quoting the latest research from the Office of Budget Responsibility forecasting that by 2016-2017 the amount of money that taxpayers will be forced to pay to meet the pension requirements of public sector workers will have increased 77 times since 2005 to a staggering annual figure of £15.4 Billion. Nearly £4 out of every £5 paid in pensions to former public sector workers will come from the taxpayer.

This huge financial demand on the private sector is happening at a time when the private sector is increasing its productivity whilst that of the public is in decline - but this is not reflected in the salaries where those working for state are still getting increases - whatever the unions claim.

If we are genuinely concerned about ‘fairness’ and ‘everybody pulling their weight' and all of these other high ideals I suggest that we start by looking at the inequity between state and private pensions.

Following the learned Lord's arguments perhaps we should require all retired public sector workers to contribute a proportion of their time to the general good as a little 'thank you' to the rest of us who are paying their pensions? 

This could be staggered by years of retirement so that somebody retired for the past 10 years would required to contribute less than a newly retired. 

If you think that is unfair consider this - Lord Bichard has spent his life in the public sector – a back of the envelope calculation suggests his pension fund equivalent to be about £4 million of which he will have contributed a small fraction -  the majority coming from you and me. 

The subject of intergenerational and inter-sector fairness is complicated. Trying to grab the headlines with these type of statements does nothing to further our understanding or finding a resolution to the huge problem of funding retirement. Pity the learned Lord didn't realise that fact. Dick Stroud

No comments: