There are promises that must be kept, they include a triple lock payable for the duration of the current Government. What we forget was the review of public pensions in 2011 which promised to provide stability till 2036. Thank goodness for Bryn Davies to remind us of this. Jeremy Hunt, Tom McPhail and Pension Oldie (for differing reasons) should remember that promises are promises.
Pension Oldie suggests the Pension Commission reviews public sector pensions
I need to declare an interest – I am in receipt of an unfunded public sector pension. One which I did not make any decision to accrue but which now in retirement provides me with the considerable reassurance of an inflation protected income to partially offset the now considerably eroded income from an annuity (bulk purchased some years ago) and the uncertain outcome from my personal pensions. (I do have over 50 years of pensionable employment).
What Tom and Jeremy Hunt appear to be saying is that we should reduce the retirement income security of future public sector employees to match the inefficiencies of the DC pension universe.
On the funded versus unfunded issue, I do know that employer sponsored DB pension schemes have added very considerable unnecessary costs onto employers in the last two decades. We are now seeing that position reversed, where employers with open DB schemes have the opportunity to reduce their future employment costs using past service surpluses and improved investment performance targeting long term rather than short term returns. I suspect the same issues have driven the employer’s cost estimation in both funded and unfunded pension arrangements.
Should we not now be targeting the best pension outcome for all workers and attempt to bring up the non public sector pension up to standard of the “gold plated” public sector benefit? In this way the burden on the future taxpayer will be reduced with lower demands for pension credits, housing benefits, etc. and increased requirement to maintaining a State Pension that compensates for the lack of inflation protection on other pensions. It would also increase the tax receipts from better off pensioners, like myself. To do otherwise are we not targeting lower current taxes at the expense of future generations?
This is surely a matter for the Pensions Commission!
Bryn Davies reminds us , that is what a conservative Government did 14 years ago
Let’s have a Pensions Commission for public service pensions! Just a minute. We had one in 2011 under a Tory led government and we ended up with the current benefit structure. A structure that that Government said was guaranteed for 25 years.