Daily Mail confusion over slashing public sector pensions
Posted by Christie Malry on February 25, 2011 at 8:39 am
The Daily Mail gets all hot and bothered this morning:
Public sector workers could see their ‘gold-plated’ pensions slashed to make it easier to transfer services to private firms and charities.
The change would mean a nurse with a final salary of £40,000 could see their pension slashed from £20,000 a year after 30 years’ service to £6,000.
Teachers retiring on a final salary of £50,000, who would normally receive a pension of £25,000, would see this whittled down to little more than £7,000.
Doctors can qualify for pensions of around £50,000. But transferring into a new private pension scheme could leave them with just £11,403 a year in retirement.
Those on the lowest salaries, such as refuse collectors, could see their £10,000 pensions cut to £3,249.
I very much doubt this is the case. It's a principle of pensions law that once you've accrued a pension right it can never be taken away from you. So we're not going to see tales of woe as a teacher "just a few months away from retirement" being cynically transferred into a private sector employer and automagically losing half her accrued pension rights.
Instead this is the Tories doing what should have been done many many years ago and taking an axe to one aspect of future public sector pension accruals. Even then they're doing so in a very limited way - this will only affect those who are transferred from the public sector to a private sector employer providing those services to the public sector. In the past their future accrual rights were guaranteed. Now they won't be.
They can still get the pensions they might have been expecting, but now they'll have to contribute a lot more to it. Just as the vast majority of those in the private sector already do. No wonder the unions are up in arms - they don't want lots of people taking responsibility for their own lives.
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