A government report has recommended that millions of public sector workers should pay more into their pensions and be forced to retire later to bring them in line with those in the private sector. Is this fair? Or does it mean that pension arrangements are poor for all?
Yes, any attempt to equalise public and private sector pensions is a step in the right direction. It is patently unfair that most (if not all) public sector workers have final salary pensions but most private sector workers do not. The Government should legislate so that pensions and retirement age for public and private employees operate in the same way.
Peter Maitland, Bristol
It is regrettable that these measures are necessary, but it cannot be right that the public sector should be a privileged sector, funded by those that are unable to enjoy the same standards. Having said that, it could be worse - in France, train drivers can retire at 50 (at public expense, of course), and the public sector in that country has long been used to better treatment than those working outside it. My long-term plans to take early retirement at 58 on a full pension (for which I was making significantly increased contributions) were scuppered when my employer, a subsidiary of a one-time FTSE100 company, was sold to its management and the final salary pension scheme was discontinued. I now suspect I may have to go on to 66, as I will probably get caught by planned increases in retirement age. My sympathy for public sector workers who may no longer be able to retire on a full pension at 60 is therefore limited.
Brian Rowney, Astley, Manchester
I have worked both in the public sector and in the private sector and I hope that I have a balanced view of both sectors. The last Government's 1997 raid on pension funds in the private sector raised £5bn per annum but served to destroy the World's best pensions industry; it also reduced the value of my private sector pension fund by two-thirds overnight. Whilst still working I'm now in receipt of a public sector pension which kicked in when I was 55. I'm grateful for this money but, by comparison with 1972 when I joined the sector, a retirement age as low as 55 cannot now be justified with the ever-increasing age of the population. The public sector now has unaffordable pension arrangements and these are going to have to be brought into line with the private sector and this will involve higher contributions and retirement at 65+.
Nick Schulkins, Winchester, Hants
It is a sorry admission! If you equate the current civil service salary package to private sector workers there is no longer any comparison. The civil servants win hands down and by a huge margin. At the same time the government is unable to honour their final salary pensions, there is therefore no 'easier' time for them to implement the changes.
Gary Lock, Leatherhead, Surrey
Both and it illustrates the ineffectiveness of the actuarial basis of those pensions. Maybe that is why those in the pensions supply business get paid more than those in engineering!
Roger Higgins, Derby
For many years a job in the public sector was regarded as being low paid, but with the compensation of a good pension. Over time it became a well paid job with a great pension. Now it is too expensive for the tax payers to support and not fair for those who have to pay a lot for their own pension provision.
Victor Craig, Glasgow
Two suggestions: Final salary pensions should not be payable until the statutory retirement age. Non-final salary pension participants should be allowed to withdraw their entire fund at the statutory retirement age and spend or invest it as they wish. It should be treated like a savings account that is locked-up until you retire.
Alan Cook, Braintree, Essex
About time too!!!
Tim Rutherford, West Lothian
Too true they should pay more into their pensions.
It is probably not their fault that they should though, it is the government who wilfully waste the taxes that people like me give them run the country and who seem to think that they can use my taxes to support their own foolish schemes.
Peter Phillips, Aberdeen
It is a result from our last government that a robust and healthily pension provision for millions of people was squandered for short term political gain through ill conceived polices. It is the same context and thinking with a complete lack of prudence and appreciation of risk that allowed the banking crisis to escalate and nearly cause a worldwide economic depression.
Gordon Brown’s legacy to us is the pensions crisis we now all face. Public Sector workers cannot be immune from this situation. They voted for that particular government as well. They need to accept the consequences of their actions. Their current pension bill is far too high, we cannot afford it.
Yes we have allowed politicians to squander the best pension provision for any industrialised nations and as a result we all have much poorer pensions
John Hopkins, Aberdeen
I find it impossible not to be heavily influenced by, after 43 years with a reputable employer, my pension will be approximately 20% of my salary as opposed to the 66% originally promised. I would not wish that on anybody but pensions have to be less generous in response to financial and longevity problems.
"Public Sector Workers" covers a wide range of pension arrangements. MPs enjoy a ludicrously generous pension but I don't suppose nurses do very well. Teachers were well treated when they could retire at 50, but I believe that has been stopped. University Lecturers have an inflation-proofed pension, but it is expensive (each year of service buys only 1/80 of their salary) and they have to wait until they reach 65. NALGO pensions were quite good, but the pay was traditionally much worse than Civil Service equivalents, and the Civil Service does remain the most generously treated of all both in pay and pensions and job protection. The galling thing for most of us is that we can hardly afford to build up a worthwhile pension on our own account, while also being expected to fund these public schemes.
David Thompson, Aberdeen
We have all been hit by the triple whammy of greater life expectancy, the raid on pension funds by Gordon Brown’s taxation changes and the changing demographic profile of the UK population. To maintain the same benefits a previous employer increased contributions from 5% to 9.5% and changed from a final salary scheme to a career average scheme. I would suggest it is reasonable to expect public sector workers to share a similar level of pain.
A H, North East
Given the ageing population, and ever increasing longevity, later retirement age and increased contributions are a simple consequence. The corollary would be most unacceptable I'm sure!
Charles Melton, Brighton
Those in the private sector whose pension was hit by 'New Labour' 10 years ago will see this latest proposal as levelling the playing field. Having said that, anyone lucky enough to be on a company sponsored pension plan is likely to be considerably better off than those left to finance their own retirement. Don't feel sorry for the boomer generation though, their company pensions, uncontrolled house price inflation and legacy properties from deceased parents' has more than set them up.
John Hutchinson, Coventry
It indicates that Governments of the past have allowed the country’s pension deficit to reach astronomical proportions, by ignoring the funding procedures set out by their own Pensions’ Regulator. In industry, even during these hard times, contributions from companies and individuals alike have risen steadily to keep schemes afloat. I believe public sector workers should contribute a fair percentage of their earnings just like the rest of us. But at the end of the day, when their pensions are due, we tax-payers will stump up the balance as always.
Ian Bell, Perth
The financial services and successive governments have mismanaged the whole provision of pensions and continue to shift the risk away from government and companies to the individual. Look at the handling of the failures of Equitable Life, the abolition of the dividend tax rebate, switching from RPI to another meaningless index the CPI. They have one goal which is to make sure we all have less in retirement.
Peter Airey, Crieff, Perthshire
This would be a step towards the end of featherbedding public employees and would bring them nearer the real world.
Robert Harris-Mayes, Llanwrda, Dyfed
Give them the choice between transferring to a typical private sector pension scheme, or paying more into their pension and retiring later – I think that they will still be choosing the latter.
Clive Newell, Belfast
It is fair but takes years for the benefits to filter through. The whole Pensions Industry is in chaos and as long as the Government allows the Financial Sector to pay itself bonuses despite failure, what hope have we? 'We're doomed, Captain Mainwaring'
David Thornton, Aberdeenshire
I think of my grandson – how dare we, in our greed and selfishness, lumber him and his generation with our debt? Our parents and grandparents generations lived within their means and sacrificed for us. Our political and organised labour leaders have been profligate for years and encouraged us to believe we could enjoy comparative luxury for free. Now it’s time for realism, however painful!
Peter Williams, Beverley, East Yorkshire
Those private sector final salary pension schemes not already closed are being closed either through necessity, or through opportunism on the part of some employers. While it remains a fact that the average public sector pension is only £7,000pa it cannot be fair that those who work in the private sector should in the future have to pay more in taxes to finance public sector pensions when their own pension arrangements have already been downgraded.
Steve Hodgkinson, Egham, Surrey
I like the new concept of “fairness” that is the watchword for the new coalition government, whilst recognising that, like beauty, this is definitely in the eye of the beholder. However, whichever way you look at it, in the private sector the remuneration package that can be expected is set at a level that is sustainable in the market place and affordable by the employer (otherwise he goes out of business), where in the public sector this has been negotiated with an employer (that can’t go out of business), the Government, that has a bottomless pit of funds supplied to them by the rest of us in the private sector. If the private sector is now less able to support the public sector then the public sector’s expectations should reflect this.
Peter Ingamells, Hook, Hants
It is very hard on those close to retirement whom have worked long in the public sector, where possibly one considers benefits other than salary. However we live in a changing world and virtually everyone's expectations for pension have been lowered.
Trevor Sansom, Salisbury
For years the government has spent the contributions of public workers and provided IOUs for the employers contribution and paid no interest on this undeclared loan. Now they complain about having to pay it back. If they had put the proper amount into a fund as private employers had to do the situation would be much better. Pain now has to be shared by all and future pension entitlement must be paid for by all at the economic rate. Public sector workers must bear their fair share of the burden and cannot expect a subsidy on new entitlement from those with inferior pensions.
George Pearson, Warrington
It is more than fair... it is not the Government or the public sector workers that generate the wealth that pays for their pensions.
Colin Sanderson, Stonehaven
People need to get real and stop focussing on the few very well paid public service employees who get enormous pensions, millions of workers in that sector don't !! An average public service pension of between £7k and £8k isn't going to lead to a champagne lifestyle. (And by the way I'm not a public service employee)
Tony Dewdney, Southampton
A suggestion that the public sector should get out what they put in has my vote and any money saved should be used to make sure that the private sector gets out at least what they put in. I speak from experience of having lost a whole lot of pension with Equitable Life and looked on with horror to what happened to the workers of Allied Steel and Wire.
Paul Cullen, Llanelli, Dyfed
May I welcome the millions of public sector workers to the real world! Private sector pensions have already been decimated and anyway, it's about time the public sector helped subsidise the banker's hard earned bonuses.
Ian Mould, Staffordshire
Real life is maybe catching up with the public sector. The capability of public sector managers to over generously benefit from their systems, not only through pensions but early retirement benefits is unpleasant to say the least. Pay now is similar to the private sector, let the other benefits align themselves.
H Barker, Hull
At the time when Public Service jobs were not well paid, the current pension scheme was acceptable. The public sector now gets paid a comparable rate to private industry thus the same pension arrangements should apply.
Mike Parton, Sutton Coldfield, West Midlands
At one time, Public sector workers were lower paid than their private sector equivalent and a good pension was the recruitment incentive. I am led to believe things have evened up on the pay side, so they should also suffer the same pain as the rest of us. Early retirement has to be a thing of the past.
Martyn S. Ralph, Hilton, Derbyshire
It probably indicates that all pensions are too small to sustain an adequate level of comfort after a long working career, but then why should public servants be any different to those in the private sector?
Andrew Deacon, Market Harborough
I cannot agree that public service pensions are any more generous than in the private sector, the difference is that contributions are not invested, rather they are taken by exchequer with the intention of paying out from future income. Changing the rules now would penalise those who have shown loyalty.
Barry Kempster, Newcastle-under-Lyme, Staffordshire
The whole concept of trying to operate a 20th century work and reward system in the 21st century is flawed. The result can only be we will all be worse off.
Ken Gray, Hitchin, Herts
It is fair and a dose of reality. The "sorry" state is a consequence of the welcome fact we are, on average, living longer than previous generations. The pension systems, particularly public, have not caught up with the tremendous costs involved especially as the public pensions are not actually funded but rely on people in work and the % of them to retirees has and is falling. It is the leaders/politicians who are retiring now who failed to address this and look to the long term, but then turkeys don't generally vote for Christmas.
Mike Billington, Suffolk
Some years ago public sector salaries used to be rather lower than the private sector equivalents. In many areas this is no longer the case, in the past I have been tempted by a higher public sector salary than I was on in the private sector.
In these circumstances it is only fair that public sector workers should pay more into their pensions. The real problem is the significant number of very poorly paid jobs in the public sector (Nursing, teaching assistants etc) but I doubt many of these are in engineering.
Jeff Bulled, Lidlington, Bedfordshire
Totally agree with the Government on this one. It is totally unfair that I should be working longer and paying taxes to allow people in the public sector to retire earlier with a better pension than I will get. The public sector has had it far too easy for far too long. It is about time they faced up to the reality that the private sector has faced up to years ago.
Martin Lewis, Towcester
The pension question is affordability. To have money in the future (a pension) means less now (earnings). Lifestyle choices of when to retire and what level of pension to save for need to be realistically funded within overall employment cost. However, as public sector employee, I’m hoping for a public sector timescale to introduce changes...
Maurice Howells, Eastleigh, Hants
Never worked in the public sector and intended to retire to it for a cushy life - lower salary but easy life and 'fat' pension is very tempting but don't think I'll bother because no longer sustainable!
Kevin Clarke, Dorking, Surrey
There was a time when a "gold plated" pension scheme was compensation for lower salaries in the public sector. There has been a trend for salaries and rewards to come in line with the private sector, so it’s only fair that pensions should follow.
Bob Cuthbertson, Preston
Of course it’s fair – why should those who work in the public sector be considered any different to the rest of us in the private sector? My own Company’s Defined Benefit scheme was halted many years ago to all new entrants, and everyone now pays far more of a contribution into whichever scheme we find ourselves in.
Chris Harding, Aldershot
The sad truth is that the previous Labour government devalued the private sector pensions, and the time has come for the public sector to be bought into line. It is fair that the public sector, which is now being paid 'competitive' salaries are not being treated as special cases. The employees in the private sector are a number of years ahead in the process.
Tony Kenyon, Newport Pagnell
Both. The sustainable wealth needed for so many to retire early and prosperously has never existed, and we have been drawing from an accumulated surplus faster than we can produce. I fear that the UK has insufficient resources for its population in the long term.
Mike Yates, Rugby, Warwickshire
Sounds like a study by a high paid consultant which consumes needy budget, is not fair, and probably cannot work to balance the near term budget; the older people either take jobs from young lower paid people joining at lower pay scales who otherwise have no job or you end up with yet more in public service; either way cost goes up not down.
Richard Tomlins, Farnham
I still remember mega inflation in the early seventies when "Private" companies were getting 30 % pay rises while state employees got 22% or so. That created a huge gap that never caught up. However, the better pensions and security in the state partially made up for that. Now state employees get ALL the downsides and no ups: be nice if the bankers got treated like that!
Peter Stanton, Derby
In principle yes they should pay more as the cost of providing their current level of pension provision has gone up, just as it has for all of us. However there is a good argument that this is part of their terms and they cannot be changed overnight. So change must come at a pace that allows those in the public sector to prepare for their retirement.
Ramsay Imlach, Edinburgh
The original so-called “generous” scheme was closed to new entrants about ten years ago and the new scheme demanded nearly 2½ times the previous contribution for virtually no increase in benefit. I previously worked in a private company where the employee did not contribute at all. The “British Problem” lies in paying current pensions out of current contributions instead of contributions funding the pensions of the contributors whether civil servants or those in receipt of the DWP Sate Pension.
Robert Falk, London
The expression “having one’s cake and eating it” springs to mind.
Richard Kelly, Pembrokeshire
In general Industry has demonstrated that Final Salary Pensions are no longer sustainable and action has been taken, there is no doubt that the Public sector should be treated in the same manner. However this should also include such things as retirement age and early retirement packages.
Ian F Morris, Oxon