Friday, February 29, 2008
Local Government Pensions
The Taxpayers' Alliance is making few friends among public sector pension fund members. Earlier in the week it published research highlighting the generosity and cost of of NHS pensions (see here), and today it does the same thing for local authority pensions (see here).
Overall, it concludes that around a fifth of our Council Tax goes to pay for the kind of gold-plated pension arrangements most private sector employees can now only dream of. As we described here, most council employees still get those expensive Defined Benefit pensions which are fast disappearing in the private sector. In money terms they are worth an average 25% on top of public sector pay.
It's not the first time someone has done this calculation. A couple of years back, the leading local authority pension fund actuary calculated the cost at 26% of Council Tax (see this blog). But he'd somehow overlooked the fact that his clients wouldn't be too keen on having such inconvenient truths bandied about. Within days his boss was forced into an humiliating public climb-down where he disowned the 26%- although he inadvertantly failed to explain why it was wrong.
Money talks, my friends. Money talks.
PS Following its paper on NHS pensions, the TPA has been accused in some public sector quarters of being "ultra right wing". As far as we're aware the TPA has never held torchlight processions or book burnings, but the accusation does underline why the Tories fight so shy of engaging in candid public discussion of such issues. And why non-party organisations like the TPA are so very necessary. As we've blogged before, one in four employed workers (nearly 7 million people) now work for the public sector, either directly or as contractors, and that is one huge block of voters. Add in welfare recipients and you're talking over half of the electorate being beneficiaries of the state. Many of them completely agree that taxes are too high, but -quite understandably - are as nervous as the plumpest turkeys when politicians start discussing the details of Christmas. But somehow it does need to be discussed. Nobody says public sector employees should be underpaid, but equally, we should all understand that their published pay rates significantly understate their overall remuneration.
PPS Tyler is not at home at present, and for various abstruse tech reasons, can blog but not read or respond to Haloscan comments. Responses at the weekend.