Monday, November 06, 2006
Public Sector Pensions Again
The TaxPayers' Alliance has just published more information on public sector pensions, in this case the eye-watering size of top mandarins' pension pots:
"Former Cabinet Secretary Andrew Turnbull left in August 2005 with a pension worth £2.62 million while David Omand, the security and intelligence co-ordinator, left with £1.68 million pot.
Current employees such as Sir Gus O'Donnell, the Cabinet Secretary, had a pension worth £1.56 million while that of Sir Nigel Sheinwald, Tony Blair's foreign policy adviser, was worth £1.09 million."
Worse, these are just the official numbers. Stephen Yeo, a leading actuary with consulting firm Watson Wyatt, points out that to buy equivalent pension rights in the private sector would actually cost much more:
"While these numbers must seem enormous to the average taxpayer, they actually mask the true value of the pension. If a private individual were to use his own money to buy the equivalent it would actually cost 30 per cent more. To buy the pension entitlement of [Sir Andrew Turnbull] would cost close to £3.5 million."
And to, ahem, "cap" it all, several of these pots are actually bigger than the government's own £1.5m cap on private pensions.
We've blogged the outrage of public sector pensions many times (eg see here). The bottom line is that at a time when the vast majority of workers in the private sector have lost all hope of a decent final salary pension, those index-linked, retire-at-sixty public pensions are a still a £960bn millstone round taxpayers' necks.
As we should all know by now, it will all have to come out of our pockets as we get older. There is no pot of real assets to back the promise. There is no money, other than what we will be forced to pay in future taxation.
Posted by Mike D at 8:16 am