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Taxpayers’ Alliance targets local government pensions

If The Taxpayers’ Alliance has the ear of David Cameron,council staff investing in the Local Government Pension Scheme may have a rudesurprise if the Conservatives win the general election.

The right-wing pressure group, which purports to seek bestvalue from tax revenue, says local government pensions are too high.

Why? “They are more generous than most private sectorprovision,” according to the organisation’s Research Note 61.

It goes on to say that the pension scheme places a “heavyburden on local taxpayers” and had caused a £53bn black hole.

Yet the average annual payout under the LGPS is only £4,000.If that is what The Taxpayers’ Alliances calls generous, it merely underlinesthe poor value of private sector provision for people on moderate incomes.

You can only imagine the research wonks at the TheTaxpayers’ Alliance doing their sums and exclaiming: “Do you know, some ofthese people get £80 a week when they retire?” “Disgraceful,” comes the Pavlovian chorus.

Perhaps these same wonks would prefer retired localgovernment staff to move on to the benefits system in order to top up theirincome. Because that is the alternative, unless The Taxpayers’ Alliance wantsto pare that too.

The gist of the alliance’s research note is that, becausethe private sector is having serious problems maintaining its pension funds,then it goes against the ideological grain for the public sector to have asuperior scheme in place.

Trade union Unite describes the arguments as a “retread” andpoints out that measures are now in place to reduce the deficit, includingraising the retirement age for new entrants to public sector schemes and toincrease average member contributions.

They come with the blessing of the trade union movement, employersand government. Isn’t this trilateralism a better way forward?

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3 Responses to Taxpayers’ Alliance targets local government pensions

  1. Steve Evans 12 April , 2013 at 12:39 am #

    Local government employees are taxpayers too right, it just seems that this fact is forgotten sometimes.

    For the past 20 years it’s been boom time with private sector employees receiving big bonuses, profit-related pay, big perks like company cars and lavish business meetings in foreign destinations, generally reaping the benefits of the boom time…while the public sector worker recieves bugger-all, apart from standard low wages no bonuses etc.

    Now it’s bust time and we are expected to suffer like everyone else, and take away the only perk we ever get. Okay, so fast forward five to 10 years, boom time again and private sector again are content that they have their nice, big bonuses etc, and the public sector presumably will get ?????

    Justice for all! How about all local government employees just stop paying into the pension fund period (because it is no longer what they signed up for). Let’s see what kind of mess that will leave to be cleaned up!

    One very recent non smoker!

  2. Peter Annison 12 April , 2013 at 12:39 am #

    Most public sector final salary schemes are based on accruing 1/60 (police, firemen, armed forces) or 1/80 (teachers, nurses, etc) pension for each year of service. These give a half final salary pension after 30 or 40 years’ service respectively.

    It seems unlikely that the average final salary in the public sector is just £8K ie twice the £4K pension quoted. Apart from anything else that figure is below the minimum wage. It reduces any debate to a farce when such patently wrong figures are quoted.

    It must also be acknowledged that around 70% of the workforce in the private sector have no employer pension scheme and many receive no pension support from their employers. Even the proposed 3% employer contribution is small beer compared with the 15%+ employer (ie taxpayer) contributions in the public sector.

    We therefore have the offensive situation in which the pension poor are, through their rates and taxes, paying for the pension rich. But perhaps this is not a concern of those who seek to defend and justify their own relatively well-heeled pensions?

  3. Outside Left 12 April , 2013 at 12:39 am #

    Hi Peter, thanks for your response.

    The £4k figure I quoted was not the average public sector pension but the average local government retirement pension, which was the subject of the article. Click through the embedded link in the blog and you will be able to source the figure if you do a “find” for “£4,000″.

    Mike