Public sector pensions: the unions just don’t get it

Sadly, I fear that the Public Sector Unions (PSU) are being led into a battle they will not and cannot win by leaders who have an agenda that has little in common with the hopes --and fears of their membership.

PSU employees enjoy good working conditions,excellent Health and Safety standards, excellent training opportunities.If they are unfortunate enough to fall ill they can receive 6 months off with full pay and 6 months off with half pay.

This is hardly indicative of a downtrodden ,vulnerable and persecuted underclass that their leaders are attempting to portray.

Nor am I persuaded by claims that unqualified junior clerical officers are the

"passionate,caring, committed front line professionals" they claim to be.

These people are in danger of having to face up to their worst nightmare i.e seeking work within a commercial environment

Even if they do win the battle they will surely lose the war; as jobs willl have to go to fund those fortunate enough to remain employed.

Well said, Ms Simpson.

I wonder what sort of salaries and pension deals the top union leaders are on . . .

Spot on, ms simpson.

“Public sector workers, or more specifically the unions, just don’t get it. We have all got to make sacrifices in today’s tough economic climate”

By we I assume you mean everyone except the people who created the mess we are in eg Bankers (generalising here) and politicians. If they were seen by everyone to be taking a real hit there may be a bit more understanding about the situation the country is in.

Yes there is a need for pension reform and it should start with a capping rate for senior executives who can often retire early with pensions in excess of £80k per year. It should then be followed with a sensible reform ensuring the poorer section of the workers (remember 2/3 fall into this category) are not heavily penalised. The remainder must be prepared to pay more for their pensions and by more I mean a minimum of 10%. What they have is excellent and even with a fair reform it will be far better than many will ever achieve.

Whilst not having much faith in Government I do believe they have to be firm but fair over this issue. At the same time members of the public and the stupid press need to stop using the public sector as whipping boys (and girls) and report things in a more balanced manner instead of using their jealousey to fire up the reactionary thoughts.

Can somebody please explain to me on what basis public sector workers think they deserve better pay and pension packages than the private sector? Why should there be a difference?

Mind you, do any public sector workers read Citywire? Dave Prentis - are you out there?

I think Danny Alexander could have presented the proposal in a less confrontational way - part of the union offense is that they feel there has been no consultation. So that doesn't seem very clever on the government's part.

But unions aside, are there really many public sector workers who don't get the reality of the situation?.. This is not so much about the financial plight of the country as about the simple fact that we all live much longer than we did, and cannot expect to be funded from the same cut off point (retirement age). 50 years ago a man retiring at age 60 would have a life expectancy of around 15 years - now it's around 25 years.

That makes the mathematics quite different as anyone can see. If the scheme was a funded one the annuity rate would have to drop so less pension. As an unfunded scheme, taxpayers simply have to pay for longer to keep the pensioner - and that cannot continue indefinitely as longevity increases.

Presumably we are all grateful for medical advances that mean, in the last year alone, life expectancy has increased on average another 18 months. And presumably we all realise that we need our pensions either to last longer - so who pays for that? - or we have to start drawing them later!

... and are the revenues flowing into the PSUs directly proportional to the number of their members?

A friend of mine works as a school teacher in Florida. With two technical Masters degrees and 10 years experience on the job she earns $39,000 rather less than pseudo-graduate New University UK teachers. ps. Florida has no scheme to help out low paid teachers with their college fees debts.

Why should people in the private sector work into their late 60's / mid 70's to pay for the pensions of public sector workers who retired in their early 60's or on an ' early relaease ' full pension scam in their 50 's ?? My mum is 75 and still has to work 4 days a week to make ends meet because she was never able to build up a pension (Has never worked in the public sector) and many private employers never offerred pensions. I worked in the public sector, thank god, for 16 years and now have to work in my current employer for 150 years to get the same pension !! The current situation is outrageous and unsustainable !!

Just turn the money tap off!

Perhaps we need a new tax. We could call in "public sector pension gravy boat tax" and impose it just on those who will receive said pensions rather than on those who won't?

My advise to the PM is get on with it! These people are not interested in change or reform.

The tax payer cannot afford their luxury, particularly as I have said many times, there are those paying taxes for Public Sector Pensions who cannot afford to pay for a pension for themselves.

It is unfair and they have to belong to the "real world" as has also been said many times. They already have good benefits, low contributions and no risk - the rest of us can only dream that such utopia ever existed.

They can strike, but ultimately there will less people working in our Public Services because of the mis-guided approach that everything should stay the same forever!

PS My wife is a Lecturer and has just been made redundant!

One could argue that the longer the public sector go on strike the better. Being consumers rather than generators of wealth, everyone of them that goes on strike will help reduce the public sector debt because they won't be getting paid. Their demands are ridiculous. They spend their lives in easy, secure, reasonably paid jobs with a good pension at the end of it, and yet they demand more and more from the wealth creators, who now are generally worse off than they are. The country is in a fix (mainly because of the miscalculations of the last prime minister, who erroneously thought he had conquered the economic cycle and then borrowed too much money on that basis) and yet they refuse to carry their fair share of the burden. Let them strike as long as they like, they don't deserve anything.

Any person who does not work in the public sector will not agree with this situation on strikes/pensions and there are a lot of us. Mr Cameron dont back down because the private sector for me is 100% behind you.

Mike the red wrote

Jun 23, 2011 at 12:26

.“Public sector workers, or more specifically the unions, just don’t get it. We have all got to make sacrifices in today’s tough economic climate”

By we I assume you mean everyone except the people who created the mess we are in eg Bankers (generalising here) and politicians. If they were seen by everyone to be taking a real hit there may be a bit more understanding about the situation the country is in.

It was not just the bankers although Im not supporting them. The simple problem is that the Government (labour) was spending more that the revenue it was recieving when the 'UK economy was booming' and therefore have no reserves once the slowdown started -basically gross incompetence. Even with the cuts the government is STILL spending more that its income for which we are all paying and will do for some years to come even though we are all paying 5%+ more in taxes now. The only solution is to cut government spending, be it pensions, schools, NHS etc.and balance the books. The altenative =keep spending- is that Sterling will become a basket currency (almost is now) then you will really see inflation and hardship

The unions just seem totally misguided on this one and the news coverage has lead to much angry spoon waving at the TV during breakfast time in my house, (much to the bemusement of my other half and the cat).

I keep seeing union leaders on the news stating the argument that 'public sector workers did not cause the banking crisis, so we should not be made to pay for it!'.

This is completely irrelevant. The banking crisis is not the issue here, it is the unsustainability of public sector schemes that is the issue. It was not sustainable for private sector, yet the attitude seems to be that because the taxpayer backs public sector, they should have what they want and be damned with the consequences.

Even after the reforms, the public sector pensions will continue to be far more attractive than most private sector schemes.

I was also disappointed with Danny Alexander's stuttering defence of the propsals on BBC news when the (clearly uninformed) news reader ran rings around him. Grow a pair mate and stand by your convictions with resolution!

This needs to be done and I respect this government for tackling the issue, as it is tantamount to policitcal suicide given the enormous size of the public sector in this country.

I am afraid there is very little sympathy from the private sector on this issue - as witnessed above.

Mike the red's suggestion of 10% contribution does not scratch the surface of the cost of providing CPI inflation proof final salary schemes from age 60! This issue is nothing to do with the Banks either.

The Government must hold the line on this or the burden in terms of tax for the working private sector, the younger generation and our children will be too horrendous to contemplate. Remember it is principally the private sector that pays for the public sector in their employment and their pensions. Claims of less pay relative to the private sector frankly do not stack up anymore.

Sorry my public sector chums, the game is up! Welcome to the real world!

I am still working full time in the private sector at the age of 67 to supplement my meagre state pension. 15 years ago a friend at the age of 50 who worked for the Local Authority had been offered an early retirement package which he accepted as he was only £10 per week off not working than working. He then had time to concentrate on working for himself and spending 6 months abroad on holiday.

Basically you're an idiot (you being the author of this article). You show a clear lack of intelligence in comparing public and private sectors in such a broad manner. What has happened in the public sector is that many of the lower paid grades (binmen etc.) have been taken out of the public sector and put in the private sector. The effect of this has been to increase the average public sector pension and decrease the average private sector pension. Whether someone is in the public or private sector is irrelevant and the likes of you and the government deliberately pitch these sectors against each other. Before the binmen etc. were privatised you would have been saying look at their gold plated pensions. Now they are in the private sector you say how hard done by they are. Anyone with a reasonable level of intelligence would realise that a fairer comparison would be of people with similar qualifications/levels of responsibility.

And as for us all suffering, don't make me laugh. I run my own business and have never been better off. The fact is, the people who caused this crisis (the bankers etc. ) have run off with the money and ALL working people - public and private - are paying for their lifestyle and yes massive private sector pensions.

The real scandal of this is that pensions in the private sector are so poor. Yes, there should be reform of public sector pensions, especially making the better paid pay more and those at the very top much, much more. But rather than yelling about public sector pensions, everyone in work should be compelled to save for their pension and employers should be forced to contribute too. We have to accept this to reduce the burden on the state and encourage thrift and self reliance. If there was a state sponsored scheme for private sector jobs admin etc costs could be low. This could produce a huge pool of additional capital - s Sovereign Wealth fund for those in the private sector but with a State guarantee for the issue of market turbulence, easily paid for by the huge saving in benefits for the retired, (The State old age pension would continue).

"reasonably paid jobs" thats hilarious. most public sector workers are very badly paid and the pension was an incentive to accept far worse pay and conditions than the private sector would contemplate. When I left university in the 1980s to work in the NHS I was paid considerably less than my peers in the private sector but in return we accepted the prospect of a decent pension and reasonable job security. It was accepted at that time that there would be a lag time of many years before the public sector employees caught up with those in the then booming private sector. Now that the tables have turned it is completetly unfair to expect me to take a reduction in a pension entitlement that I have paid into for many years. i won't accept this moving of the goalposts for a problem not created by myself. Mess with my pension and many professionals like myself will definitely leave the NHS for the private sector or overseas.

Like someone wrote earlier , we all have to contribute when times are hard !! perhaps our MPs would like to set a good example first by reforming their pensions , why does everybody like comparing private sector pensions with public sector pensions , If I had a public sector pension I would certainly be fighting to keep it , you get what you fight for in this world !!

I don't think the government has gone far enough.My daughter works for local government in HR and she thinks the pensions and benefits are outragous and unsustainable

It has to be madness when the public sector who after all only spend the wealth,thro taxes, created by the private secctor, are on a guaranteed purchasing power pension. Whilst the poor private sector, who compete daily in the real world to make the money the govt spends have to save and gamble on the stock market for theirs. When was a govt employee lkast told that unless you match or beat your competitors productivity, quality and pricing your out on your ear.

A public sector worker is currently 35% better off than his/her counterpart in the private sector. Once the ultra-generous public sector pensions are also included, this rises to 43%.

I can't blame anyone for riding the gravy train, but please can they just admit that's what they've been on, and stop bleating as it pulls into the terminus.

phildoc why not do it leave thats is. its time you lot woke up and smelled the coffee why should we in the private sector pay for your pesion and in most case early retirement. Just admit what you have earned you are going to keep so just get on with it.

Dear disgruntled of T . Wells , Easy , Tell your Daughter to leave the public sector then , and stop milking a system,which as she says , Is outrageous and unsustainable ,will she be on strike at the end of the month , I doubt it , but she will probably take the benefits that are negociated ,!!

I would be confident of a fair outcome if as someone else said, our MPs took the lead and set a good example.

Let's be honest, this is a bit of union or public sector banging by the Tories. Just after we rescued the banks we found that they were still paying mega bonus's to some. We, the owners, could not stop this as the banks were contractually obliged to make the payments. Are pensions terms and conditions also part of the employment contract? Why don't we hear about public sector employment contracts?

The key to all this furore is in the hands of MPs - set a good example on pensions and guarantee that we will not have to bail out any other EEC country that has a more generous pension scheme.

Yet another mess left by the last government. There simply isn't the money to pay for better pensions for the public sector than those in the private sector can afford for themselves.

And what about MP's pensions while we're at it?

Bailey - so the public sector only spend the wealth created by the private sector do they? Well what about the supply of educated workers that the public education system provides to the private sector? What about the way the NHS looks after the health of private sector employees enabling them to keep contributing? The fact is that the public and private sectors both contribute to each other and as I said earlier, this public v private battle is a nonsense. It is created deliberately by Osborne etc. to deflect from the truth which is that the bankers have screwed everyone and people are just passively accepting it while they walk off with their pockets stuffed full of their ill-gotten gains. Even Mervyn King said he couldn't believe how the people in the UK are not more angry about a crisis they had no part in the creation of.

I fully support the need to put the brakes on the public sector pensions gravy train.

But have MP's taken any action to reduce the generosity of their own pension scheme?

Let's have some leadership from the front!

"public sector salaries 35% more than the private sector" Complete crap. try telling that to NHS secretaries on 9-10K per year! i doubt many would do the same job in the private sector for that sort of money

As usual Lorna Burke is banging on about her right wing views which Citywire really should not allow on these pages. It is not a balanced article by any measure. Is the purpose of Citywire to bash public sector workers?

Don't forget that a certain Mr Gordon Brown killed off private pension schemes by taxing pension dividends as soon as he got the job as chancellor in 1997. Pity he didn't close down the unfunded public sector ones too.

Great , At least we have someone who is not totally blinkered ( Alan Gleeson ) , like I said before it is not a very nice world we live , Its dog eat dog thats why the rich get richer and the poor pick up the bits , the problem is that the rich have that much they cant spend it,and they still want more !! so If you are well paid and well off good luck to you , but dont attack people who are just trying to defend what they have for their retirement . My Father who worked for 50 years then retired on the state pension , once said in a discussion about saving for retirement , " Saving for a pension was not an option years ago , you were lucky to have enough to buy food !! alot of you seem to have short memories ( or very young ) Fight for your pension , you never know when you might need it !!

My 'gold plated' pension means if I were retiring today, I would also be telephoning Pension Credit to check the progress of my claim. For those in ignorance, Pension Credit is a means tested benefit to ensure pensioner's income meets the Minimum Income Guarantee.

I have said before, the answer to British worker's pension problems is to give us all the same pension schemes as are enjoyed by our sharing & caring MPs, MEPs and senior civil servants. I assume it is unlikely this will happen! Then why should I have to save for my own pension and have to part pay the pensions of millions of civil servants, many doing a pretty meaningless job. Everybody should be paid for the job they do and they should make their own savings for pensions etc.

Is there a single person who believes the unions (& phildoc's) mantra that people going to work in the public sector did so in the knowledge that they were being paid less than they could get in the private sector; but knew that their pension in 40yrs time would be at a higher level!!

No-one in their 20s thinks of future pension levels. They are just another of the many gold-plated employment benefits in the public sector, alongside:

# lack of accountability

# three times as many annual sick days as in the private sector

# job security (a total disgrace in the educational system)

# shorter working hours

# etc.etc.etc

(NB - the major "Other" is of course the fact that a high %age so called public servants just wouldn't cut the mustard for a job in the private sector)

Lets stop bashing the public sector a moment and consider the facts:

1) Everyone not employed in the public sector is a banker and therefore to blame for the financial crisis.

2) Public sector jobs are so much more demanding and stressful so everyone in the public sector needs to retire at age 60 (or earlier).

3) In the public sector you are entitled to pension, pay and benefits you haven't earned (yet).

4) Everyone in the private sector earns more than everyone in the public sector and therefore should be made to pay for their pensions.

5) The public sector shouts louder and has people organising strikes and handing out banners - therefore they must be right.

6) Because the Government responded to a pre-emtive 'strike' by the Unions, it means it was right to declare a strike.

7) No-one in the public sector gets paid so they can't contribute to their own pensions.

8) The unions were not elected by the general population therefore put forward a far more balanced point of view and have the interests of everyone in the country at heart than the democratically elected Government.

9) Public sector pensions (largely paid for by the taxpayer) should be at least as high as private sector pensions (largely not paid for by the taxpayer), it's only fair.

Most private companies changed their pension terms many years ago.

Lloyds Bank did in 1995 and changed the terms of the RSB pensions after the takeover in 1997.

The Labour government made a half hearted effort in 1995 but chickened out of more than a minor change as soon as the unions made a noise.

Nick Greenwood, In answer to your question:

"Is there a single person who believes the unions (& phildoc's) mantra that people going to work in the public sector did so in the knowledge that they were being paid less than they could get in the private sector; but knew that their pension in 40yrs time would be at a higher level!!"

Yes me. Not only do I believe it, I have concrete proof of it, knowing a number of people who took jobs in the Civil Service in the 80s for exactly that reason.

Quite amusing you find job security "a total disgrace".

nytu - That's brilliant !

Nick Greenwood and nytu you sum it up wonderfully

In private industry, pay for the employed (of whatever rank) in a competitive realm, is governed by the price of their product, which in turn depends on what people are prepared to pay for it; needless to say, if the price is too high in comparison with other personal needs and/or sources of supply then people won't buy it.

As has been said before, pension is effectively deferred wages, thus overall that figure goes into the equation of cost versus value for the product. Where does such an equation exist in the public sector? it would appear there is none, thus they get what unions can extort; nowadays based on out of date criteria and everlasting greed.

Trouble is, the public sector has been left to it's devices for too long and are being asked/told now to come to a fairer apportionment of reward for their toil. No doubt it comes as a shock.

H, An elder one , What category would you put MPs in based on "the price of the product " , there must be an equation surely ?? are they not Public sector

Nytu - Brilliant! I do wonder who's going to support the public sector workers when they strike. Perhaps we'll find out just how necessary they are . . . .

I remember working in the West End of London years ago when they had a massive power cut and all the traffic lights went out. Far from causing chaos, the traffic moved much more smoothly and there were no accidents.

Lorna - I was a pensions lawyer for 20 years, and you are spot-on in your analysis. Your article needs to be "more balanced"? All you are doing is pointing out a glaring imbalance. What would have been the point of "consulting with" the unions? Everyone knows exactly what the unions would have said. Let's not waste time. This isn't union-bashing by the Tories. It's a government having the courage to do something essential that the previous government ducked out of - just possibly because that government was funded by the unions?

One of my pensions clients was an engineering company ruined by its US parent. TheTrustees of the pension scheme were puzzled why they kept getting transfer requests from the public sector schemes. It turned out that almost all the redundant workers had found jobs in the public sector specifically to take advantage of the guaranteed pensions. Hence, I suspect, the rise in participation in the public sector schemes.

Lorna, who pays for private sector pensions, incidentally? Could it effectively be the purchasers of the goods and services that private companies sell, by any chance? Have you noticed how badly affected those in the boardroom are affected by the present financial crisis? It's tough for them, isn't it?

Your general argument seems to be along the lines of, "If I/we (the private sector) cannot have it, why should others". If you'd bother to actually research the issue rather than make populist utterings you will see that these pensions are not unaffordable, as the ideologically-motivated government would have you believe. You seem to advocate a race to the bottom. That's only for the plebs though, I suspect.

Maybe all the private sector workers that received bonuses, share options and other perks over the last 20 years or so would care to hand them back now the country is found to be in a mess. In the interests of fairness and balance, these monies can then be handed to those in the public sector who never had the opportunity to receive such rewards. Is that not fair and reasonable too?

"Maverick-" --- wasnt he a Cowboy ?

Nice one Ted , I look forward to Lornas unbiased reply

Norastrand - Wrong Maverick - I'm the fighter pilot from "Top Gun"!

Ted - you seem to be under the same illusion as a lot of people who work in the public sector in thinking that everyone in the private sector is a banker or ceo who get bonuses and other perks. This is totally untrue.Many get no perks exactly the same as the public sector where some get bonuses but the majority get nothing

And where is your research showing that public sector pensions are affordable?

Why does the debate have to be at such a facile level - dependent on demonising either the public or private sectors? Most people in both sectors work hard and should be able to end up with a decent pension. (Though some bankers have their fingers in the till (our till) and are getting away with it.).

Public sector workers, if they deliberately chose the public sector (as many of them did out of public spiritidness - eg doctors, teachers), did so for a particular package of rewards. They expected to be adequately paid but not to make lots of money.

I am sure they now realise that change has to occur because of increased longevity and a difficult neogtiation is in progress which appears (if you read between the lines) to be getting somewhere. But fomenting a public/private divide is not the answer - everyone should be encouraged to save for a decent pension.

The problem at the moment is that the private sector as a whole is not incentivised enough to save for pensions - back to the introduction of the 10% tax credit which has seriously upset the economics of pension funds and pension savings.

I too joined Public Service because I believed in the job I do ( Trading Standards Officer) and knew at the start of my working life that my pay would be less than University peers with the same degree who joined the private sector. I knew the pension was a good scheme and did not worry when friends were telling me of their Christmas Bonuses, other perks etc. which we did not get. Certainly our pay is lees than comparable jobs where those comparisons can be made ( for the simple reasons as explained above)

Now I am looked on as a pariah in society because i will get a pension that I have paid substantial contributions to. Incidentally our employers have used our pension funds as a source of cheap loans to keep your council tax down.

I have worked untold hours of unpaid overtime including 12+ hour shifts protecting responsible private sector retailers against counterfeit/unsafe goods and also when Foot and Mouth caused by the greed and criminality of some parts of the private sector.

Incidentally I have been on a number of management courses with private sector people and enjoyed the interchange of ideas but also have not found them to be the superior breed that some commentators would have us believe. Indeed we see our job to assist the private sector to grow by working in partnership but still enforcing legislation against the rogues who harm responsible businesses.

For this reason I resent your lets bash the public sector tone of your article and some of the poisonous comments as well as the way the Govt is portraying our position.

I am seriously worried about the prospect of public sector strikes...

What will happen to we private sector employees - bankers every one of us, equally responsible for the s**t hitting the financial and economic fan - when blameless public sector workers - caring, dedicated and low paid the lot of them - go on strike?

I just googled "public sector jobs" to see what misery awaits us if the holders of these caring, dedicated and low paid positions withdraw their labour and these are just three:

- Intelligence Analyst in Brighton "Making risk based decisions at an operational level assisting effective early intervention"

- Behaviour support worker in Stoke on Trent "to support students identified as having behavioural difficulties through planning and delivery of targeted programmes to enable them to access mainstream education."

- Tree Officer in South Wales "to assist with the management of their tree stock"

Bear in mind that these positions are currently available so somehow the country has managed to scrape along without the posts being filled and also that public sector unions and Labour are claiming that this is a time of unprecedented cutbacks, yet they're still recruiting!

I forgot to mention the prospect of gender diversity advisors going on strike; its just too awful to contemplate!

I worked in a local authority after leaving school in 1963 for about 10 years. At that time salaries were significantly lower than those of my peers who chose private sector careers. This difference was accepted as normal by public sector workers because the trade off was better job security. At that time there was not a lot of difference (as I saw it then ) between public and private sector pension benefits, but this may be a wrong perception.

Since then salaries have come much closer together, despite the fact that public sector employment carries little risk. Pension benefits as shown in the article are now heavily skewed for the benefit of the public sector. I am amazed that public sector trade unions cannot see that a correction is required. They seem to want the best of all measures for a protected and what are perceived to be a relatively inefficient group of members. I agree that the Government must not back off their aims.

The proposed increase in pension contributions, when added to repayment of student loans (minimum 4 years Higher Education for teachers) will produce marginal rates of deductions from salary exceed 50% for newly qualified staff on say £23000 p.a.

The result of this will be simple, teachers will drop out of the pension scheme. The pension schemes are run on a PONZI basis so the net effect will be greater demands made on the taxpayer, not less.

There has also been a great deal of misrepresentation of the facts. Under the teacher's scheme for example contributions are currently 6.4% from the employee, 7% from the LEA and 7% from the DFE. This is a contractual arrangement as part of the conditions of service. I have noticed that comparisons are made between a 6.4% contribution into a private scheme and the benefits of the 20.4% contribution under the teachers scheme. The teachers scheme should be 3 times better, it isnt. The comparisons assume that the private sector employer makes no contribution. A further distortion is caused by using current annuity rates to inflate the comparative value of current public sector schemes.

Here we go again. Drive a wedge between public and private sector. While the wealthy sit back and take their bonuses, seat on the board, jobs for the boys (and sometimes girls). No doubt someone will soon call public sector workers 'parasites' as has happened in this and other forums recently. Private sector pensions are poor in comparison to public sector. It wasnt always so. Is that public sectors fault. I suggest that many people over the last 20 years or so, have been misold pensions schemes that they should never have been enrolled in. It is the financial sector and poor regulation by ALL governments that enabled the financial free for all. Look were it has got us. Fighting amongst ourselves. The article states figures that show how many in the private sector do not have pensions. They will be living off the state, assuming their is one left. It was realised that public sector pension schemes were unsustainable, that is why over the last 5 years or so , new terms and conditions were negotiated. Contributions were increased, retirement ages increased. Many public sector schemes including the NHS now run a surplus, which the treasury take into its coffers, rather than supporting future pension requirements. Dont see that being mentioned very much. Regarding, unsustanability due to increased life expectancy. Some may be living longer, many public and private sector workers, especially those that work shifts will not benefit from increased longevity. Again as in most health statistics there is an increasing gap between poor and wealthy. I believe that all workers should be able to have a retirement that is financially sound and do not have to worry where the food or heating bill is coming from. Ideally without state support. This is what citizens should be fighting for, rather than turning on each other. Apologise for the ramblings but am currently on night shifts so not clear headed. Sleep well and safe in your beds tonight.

Phildoc is misinformed on secretaries pay in ther NHS. See this ad. Barnet & Chase Farm Hospitals NHS Trust

The Social Work Department is based at Barnet Hospital, providing a service for Adult and Elderly. This post is part time working over 5 days We are looking for an experienced and motivated Secretary to join the Social Work Team, covering mainly children and families social work including secretarial, reception, telephone work, data input and scanning. The ability to work...

£15,860 to £18,827 pa

Barnet

The unions regularly misinform the public on pay by talking about net salary and average pension.The true figures are gross salary and average no of years worked.to get average pension.(in the civil service 14 yrs.)

why do some public sector workers retire early ,well its simple

Do you want a 70 year old doctor ,nurse physio, paramedic etc,

Do you want a 70 year old police officer

Do you want a 70 year old firefighter.

and to finish off when i retire i will have to get another job ( private sector £6.00 per hour ,cant wait )

Gill - I'm under no illusion. I'm just addressing the imbalance in the article. You are right. There are workers on each side of the divide that are both advantaged and disadvantaged. A pity that Lorna and others on here cannot comprehend that and seek to create a divide. In all honesty, how much moaning was heard from public sector workers when the private sector was doing well? Why did we not hear the clamour from many in the private sector until now?

The previous government thought that the pensions were affordable and submissions to the Independent Public Service Pension Commission, and extrapolated data they produced suggests the same.

How many people realise that the reforms of 2007-2008 for new entrants addressed many of the issues?

Like others on here have alluded to; the real scandal is why private pensions are so poor. Even the majority of publice service pensioners will not achieve a pension that is a "livable" income.

The industrial action threatened is natural because the union leaders are charged with defending terms and conditions. If negotiations are being conducted in bad faith (as Alexander's comments suggest) what else can be done? Sure, there may have to be some movement and compromise by both sides, but sadly one suspects that the effects of any agreement will fall disproportionately on those at the bottom of the pile rather than skimming those at the top. Shamefully, it was ever thus.

I am a teacher in the TPS (Teacher's Pension scheme). In 2006 the treasury and unions re-valued the scheme, negotiated changes including an increase to teacher's contributions and the government said the scheme was sustainable and affordable for the long term. Then came the financial crisis and suddenly it's not affordable or sustainable without substantial increases in contributions, reductions in future pension increases and 8 years more working to maintain the SAME position as just 4 years ago.

What the press fail to get across to the population is there are a whole miriad of different schemes in the public sector, the "platinum plated" scheme is the one the MPs have for themselves (no mention of bringing that into line with the private sector), the civil service scheme where many contribute nothing or 1% or 2%, teachers 6.4%, NHS workers around 9%.

I agree there should be a review and bring them all into line with an affordable scheme for the future...but don't do this with calculations on the back of an envelope which is what the government has done. The TPS should have been re-valued over a year ago but the government haven't done it and expect us to believe the new figures are necessary. Show me the facts and the projections and I'll sit down and consider them through.

I'm out on strike because they are not playing fair not because they want to change my scheme.

Send the treasury back to school to brush up their calculating skills!

James W, succinctly and calmly put.

Alan, bunkum. The binmen pay into the local authority pension scheme, one of the few public sector schemes that have separate funds to support them. Because of the raid of the evil triumvirate, and their acolytes, a very deep hole resulted which the local authorities are now trying to fill by adding to the rates payable by the general public to fill the hole. In other words, the public having paid out once already, are now being asked to pay out again to make good the deficit caused by Bliar, Brown/balls/Cooper and the other evil ones. It is better that there be proceedings for misfeasance against these individuals and that they and their supporters that pushed this measure through Parliament should be forced to forfeit every last sou that they possess to partially fill this hole.

This picking on the bankers (and I am not saying that they do not need to be picked on) as being the devil incarnate is trying to lay a red herring trail. In terms of a minority, they are an extreme minority and the support of the few banks that needed support was a mere drop in the ocean to the cause of the black hole compared to the black hole created from 1997 onwards, sale of gold (having warned the market that this was going to happen), leaseback of Crown property, the bill for which is now rising steeply) and support for the feckless, both local and imported. These, local and imported, are a continuing drain, on top of the pensions scandal for the public sector which is bailout of current income, and not funded by having put aside the contributions, employer and employee, but out of current income.

By vastly packing the public sector with their supporters, Bliar, Brown/Balls/Cooper (to ensure politicisation of the civil service) and support for them in elections, as well as the fraud of the unions education grants (this money would come back to them at the time of elections) the aforementioned had no regard to the liabilities they were laying down for the future for the electorate, other than to ensure that they would be re-elected. I think they call that gerrymandering.

The point I'm trying to make here is that it is easy to hire at low wages for little impact at this point in time "seat polishers" and not have them contribute meaningfully to their pensions. What should now be done is for the "pension" contributions, both employer and employee should be put into a separate fund so that the future pensions etc do not rely on the payments by taxpayers for the future to maintain them and the amounts yielded by those pension funds should support those pensioners, not future taxpayers money.

Should these funds, as is currently the position with local authority funds, be inadequate then that is the problem of those benefiting from the funds, not of the general public.

Again I say that because of the misfeasance of the aforementioned, their personal assets should be attacked to be a lesson for future politicians who ignore reality to get unfair advantage.

An equally large drain of the feckless idol, both local and imported. Not only do we have to pay their weekly maintenance, they also get substantial funds for their accommodation, kitting out the accommodation, holidays, TVs, motor vehicles etc and the more mouths they create, the larger the payment. That must stop. Once might be careless, twice is more than negligence and more mouths is downright fraud.

In this context we should not reward criminality. There is too much condoning of criminals, and as result of these frauds continue unabated, and I also include those criminals in Parliament, current and past, who should have been prosecuted and incarcerated with loss of all benefits because of their criminality. The human rights fraud also needs to be ended and the rule of law re-established, if you do not observe local laws, you will not fit, if imported, to remain in the country. This "right" go obligations, something that politicians all too often ignore.

NYTU, Twaddle.

David, what Labour government in 1995? Which country?

The current strike is not about pensions, so much, as a political agenda and as such that should be illegal and strikers liable to be sacked, without notice and return of the contributions made that they can make their own pension arrangements, in the market and if none, nothing more other than then very basic state pension, no frill etc. Based on the size of the support, that would probably very nicely be an instant reduction in the public sector of about a fifth of the man/woman power. There can be no surrender and/or fudging of the issues. This was always on the cards because Brown was persuaded that if he imposed his pension plans at the time on the unions, they would strike at the time. This is merely, somewhat belatedly, bringing into effect that which should have been done in 1997. If the unions were serious, they would have struck at the time to support the private sector against the pension rates being made, from which they benefited quite considerably, although it was not obvious at the time how.

Those with powerful unions behind them seem always to forget the plight of others.

Ted - I agree there are those that are advantaged and disadvantaged on both sides and it is a shame that this seems to be putting the public and private sector at loggerheads with each other

There are 2 things that really bug me

1. Why aren't MP's leading by example and reviewing / changing their pension schemes before expecting everyone else to accept changes

2. The union leaders always twist everything and tell untruths. I know a lot of people don't trust what the government say but you cannot trust what the union leaders say either. Also, the salaries and perks they receive are scandalous and they never lose money when they ask everyone else to go on strike

At the end of the day we are all living longer and the pensions everyone (public & private sector) had 30 or 40 years ago are no longer affordable - that would be the case even without the financial crises

But how do we solve this?

What about the G.Ps on £130000 a year +, who no longer make home visits unless your dying (then probably a locum) - weekend work also seem problematic. Their collective pension costs must be stupendous. Another instance of the last labour government being shafted by greedy NHS medics. A further manifestation of Aneurin Bevans "crock of gold".

At the end of the day the people I really feel sorry for are our children as they are the ones who will be paying for our pensions when we retire and they will have no hope of building up a decent pension of their own. Things have to change for their sake.

I actually feel I am lucky to have got 12 years in a final salary scheme before it was closed and feel those in the public setor should look at it the same way. No-one is trying to take away what they have built up so far just change future benefits

I am wondering what effect public sector strikes will have. The railways will continue to run because they are no longer in the public sector. The NHS cannot close down because public sector workers are also users of the NHS services. Closing the schools would certainly have an effect but public sector workers have children. I don't think the police are allowed to strike. It would be a nuisance if the customs and immigration people struck and we were flooded with drugs and immigrants. Many public service workers carry out jobs in which the absence of a week or two would hardly be noticed. As far as I can see the absence of dustmen could be the biggest nuisance. How can this be the biggest disruption since 1926? Am I missing something?

I think we are being manipulated to attack various sectors, when in fact we should be asking more questions of those who govern us. For example:

1. Why have private sector pensions done so badly over the last decade? It was after all the government who allowed private companies to take pension holidays for years, thus weakening private pensions. It was also the government (about ten years ago) who started to tax dividends and as a result are plundering pension funds on an ongoing basis. In addition, private pensions in this country are exposed to massive charges by fund managers - why is this over-charging allowed to continue when there is clear evidence that fund managers from other countries charge significantly less. These charges drain the value of these funds.

2. If the public sector pension fund is in such a mess, why has this been allowed to continue for so long? Also, why are so many of these schemes unfunded?

3. Why are MPs, MEPs etc given such generous pension packages? Why are they allowed to have pay rises, when many others cannot?

4. Why are executives of leading companies paid so handsomely? For example, I note that the chief executive of Nationwide Building Society intends to take a pension/salary package of 1.8 million this year alone.

5. Why did our government decide to remove the Glass-Steagall firewall, thus allowing commercial bankers to gamble with the bank deposits from retail bankers? And, by so doing make our country more or less bankrupt. Interestingly, India decided not too remove this firewall when other countries did. They felt it would be far too risky. Their banks are fine.

6. Why can we find money for some things, but not for others? For example, ‘interfering’ with Libya, sending aid to Singapore, in Scotland scrapping prescription charges for the 1 in 10 who pay, costing 60 million pounds.

7. Why when we discovered oil in the 1970s, did we not do what Norway did and put aside funds for a rainy day. Norway, saves 50% it receives from her oil fields and invests this money in Sovereign Funds. These funds now yield more than the oil.

8. Why as a developed nation do we still not look after our aged with dignity?

As I said at the beginning - we are asking the wrong questions or question. Surely the question has to be why are we governed so badly?

In my opinion, we are being set up to attack certain sectors, simply as a ruse.

Incidentally, I am a public sector worker and proud to be one.

Ps I don’t remember the private sector, 15 years or so ago when their pension funds were fine and generous, feeling any sympathy for the relatively poorly paid public sector worker at that time.

Snoekie, you need to take your medicine - it might help you understand what I actually said. In terms of calculating average pensions, those workers in services which were contracted out to private firms are regarded as being in the private sector. As they were mostly lower paid workers, the net effect of this is to raise averages in the public sector and lower averages in the private sector. Is that clear enough for you? However, my basic point is that it doesn't actually matter whether people are in the public or private sector. As has been said by others here, the argument of some in the private sector is along the lines of "my pension is rubbish so I want yours to be also". Not a very wise strategy. As soon as one group is pulled down to the level of another, the next stage will be to lower the level of the next group who will then start pointing at others and say they need to be as equally badly treated and so on and so on. At the same time the reptilean Osborne endlessly repeats "we are all in this together" like some demented Dalek stuck in Groundhog Day.

As for the banks, the mess caused by these excuses-for-human-beings is only just beginning to unwind.

In private industry, if manning levels and pay in a company don't add up to a viable pricing for the product, then action is taken to make it so, or the company goes bust.

Ergo, if the tax payer cannot afford manning levels and pay in the public sector then the same expedient should apply in that domain; nothing personal! forget odious comparisons; we cannot afford such a large public sector doing often unnecessary tasks, economies must be made. The public sector has grown like Topsy in this nanny state of ours.

Gill Pelosi - I agree with you, and I came to the conclusion the only way my daughters were going to get a decent pension was if I started it for them. So far I have set up one SIPP for the elder and will do the same for the younger when she gets a job (!!). I administer it and choose the investments and only I know the password!

I should have joined my firm's final-salary scheme when I joined it in 1989, but I had just bought a house on one of those pernicious low-start mortgages and I couldn't afford it.

Gill, you make a very good point that no-one is trying to take away the pension the public sector workers have already built up.

In the private sector a pension is a promise, not a contract. Is the pension really part of the terms and conditions of employment for public sector workers?

My children won't be paying for my pension when I retire. In retirement, I am projected to be paying more in tax than I get in state pension. Yes, I've been saving hard. Silly me.

Why are people going on about the banks FFS?

The public sector crisis has been festering for years. There was f**k all chance of Labour doing about it (Public Sector Unions are keeping the near bankrupt labour party afloat), at last we've got a Government prepared to grasp the nettle.

Re my earlier comment about Lorna Burke and her article. I strongly disagree that this is the sort of subject for Citywire. It is well covered in the main press. So why is she covering it here other than to espouse her well known right wing views and get a strong reaction from fellow supporters who have equally biased views. Look at the comments above from her fan base.

Just what did Lorna miss in her article? Well she managed to overlook the most comprehensive review ever undertaken of the public sector schemes by the independent National Audit Office ( they report to Parliament and are known internationally for the integrity of their work). They found that although the cost of the public sector pensions will rise over the next few years it will eventually return to the cost levels borne by taxpayers in the past. The National Audit Office concluded that on this basis public sector schemes are affordable over the long term.

What has changed is that the public/ politicians want to cut back on the overall cost over the long term. This was started in 2007 when there were major changes to reduce the cost of the schemes. Less than 4 years later the Government wants to make even bigger cuts as outlined in Lord Hutton's report. Lorna didn't even mention this - strange.

Many public sector workers probably accept that cuts to their pensions are inevitable but are a bit non-plussed as to why the Government didn't get it right the first time around. Danny Alexander and Frances Maud as the chief negotiators on the Government side are presenting a fait accompli prior to negotiations. Not really helpful and possibly because there is something more to their tactics as suggested by Labour (no mention of this angle by Lorna).

Lord Hutton who looked at how the cost of the schemes could be reduced warned the Government this week that pushing up the retirement age, reducing pension benefits and substantially increasing contributions could have effects that would end up being costly to the taxpayer. How so? Even if these are still good pension schemes, public sector workers may vote with their feet and not join/ exit the schemes. This will lead to lower contributions to meet current pensions - a shortfall that will have to be met by the taxpayer. This bit of news seems to have passed Lorna by. Where has she been? zzzzzz.

The government should lead us and stop us coming to harm.

This government is not leading by example - their pensions remain the same - even better than public sector ones.

They are greedy so will not 'reform' their pensions.

The last government did not stop the bankers bringing harm to us.

Gordon Brown knew what the bankers were up to in USA and knew our bankers were buying the phoney bonds they were selling.

After all he was one of the best read and intelligent chancellors we have ever had.

But, even he, a socialist, was greedy and had not the courage to stand up to the bankers, because he wanted all the taxes rolling in from the bankers Mickey Mouse money.

Alan, Brown/Balls/Bliar (et al) robbed my pension pot of 6+ figures, leaving me with a pension of less than 5 figures. Me, myself and I, no employer. He did not touch the public sector pensions, and what is happening now is a re-balancing. It doesn't go far enough. So, please engage brain before you blow ignitable hot wind.........., a rude noise etc.

As for the banks, this is attacking a minority of a minority. £65 billion compared to the trillions wasted/committed to mainly by the last govt. I agree that the twankers are mocking us with their pay/bonuses, putting their sticky fingers into the money stream without real effort on their part, or even any good service and/or ideas.

Medicine, HAH! Poison and avarice more like it, to fund their criminal activities...

Love this quality article from a well informed intellect. It's as good as the others I've read. Few points to ponder;

1) Bring it on. I can't wait to employ the public sector plumber, roofer, taxi driver, butcher and mechanic that will exist once the tap is turned of? Oh - sorry they all exist in the private sector and don't need public sector money?

2) Why the race to the bottom? The scandal is what has happened to private sector pensions but you lack such backbone you just let it happen.

3) If it's so great in lah lah land why don't you apply for a job in the public sector and join this apparent gravy train?

This is little more than a spoilt child saying you can't have X because I haven't got it and my parents can't afford it. Yes the reforms are needed but kicking the public sector just to make you feel better about your life isn't the answer.

Nice to see so many SFCs as usual. If the private sector is so poor then get a job in the public sector - good luck with that!

I bet I could have sorted a private pension just as good as the one I have with the 11% I've been paying for the last 16 years.

The problem is that not enough in the public or private sector pay enough in and never have. It has gone on for too long and now people who would have paid more years ago are going to be shafted - that is why they are angry.

Also not every public sector pension is the same although Nick Clegg thinks they are - don't worry though cos the MPs will ensure theirs are affordable - they'll probably claim their contributions back through expenses too. But hold on they're not part of the review are they...........wonder why??

Nice to see Citywire joining in the Facebook cause 'hands up who hates the public sector' - are they being paid by Danny Alexander?

Good to see that this issue is "hot" and obviously close to the hearts (and pockets) of many of us here.

I shall not bother repeating the comments of many with regard to why should the public sector be immune to the downturn and continue to enjoy benefits not freely available to those in the private sector.

My feelings go further.... I think that if these people see fit to strike over this issue then they should also have to reapply for those jobs that they hold. I feel sure that many responsible people would dearly love the opportunity to work, if only they could get a job - a striking public sector worker should NOT have the automatic right to return to the job they are striking from!

I agree with A Donald.

The new MPs in this parliament should have been made to buy their own pensions or else have been offered a DC scheme (with no cross-subsidy by the provider). This would have led to a better understanding of pensions in Westminster and therefore better government.

In fact, the existing scheme for all MPs should now be closed to further contributions and accrual of benefits, like with many private sector schemes.

It's my understanding that public sector pensions are generally fully funded by those that have paid into them. This means that those in the private sector won't be funding them despite what the government would have us believe.

Well said XXXXX. Right on the nail.

An Elder One - confused logic. This isn't about reducing jobs in the public sector - those you may feel are unnecessary or not. It is about reducing the pension benefits of current and future employees. But even if it were, are you saying that those "unnecessary" jobs are genuinely unnecessary or that they should be outsourced? And if outsourced to what benefit? To put those workers on inferior terms and conditions?

There are so many things wrong with our economy and our collective economic mentality and public sector pensions as not even close to the top of the list.

teachers pensions look higher as most of them have stayed in the same job for most of their working lives and have paid their contributions for a long time.

The statement about contributions is extremely misleading. A rise of '3%' for instance, does not mean that it you were paying £10 of contributions yu woould now pay £10.30, it means that if you pay 7% of your salary as contributions you would now pay 10% of your salary, which is a big increase. Local authority workers in local government pay contributions like everyone else, and the money paid is kept in a fund. Vast numbers of council workers have lost their jobs and there has been a pay freeze for 2 years, whilst many of those in the private sector have received increases. People enjoy having a go at public sector workers because the press likes to have a go at anyting that will stir up hysteria. We work just as hard as anyone else, mostly to provide services to members of the community who are in need.

Almost all Public Sector schemes were changed in the past 10 years with many early retirement options being removed, a reduction in pension calculation from a 1/60 to 1/80 of salary and increased employee contributions. This however was just intended to be the first stage, negotiations between pension manangers, employers & unions were ongoing with all parties accepting further changes were necessary. When the current government came into power they stopped negotiations & commisioned the Hutton report & then took over negotiations themselves and conducted them in a highly confrontational manner including enforcing some 'non negotiable' changes, some of which do affect benefits already acrued.

The average amount paid out by LGPS is around £4,400 for men & £2600 for women, hardly gold plated, though its also true that if you worked for your whole working life in a reasonably paid Public Sector job then you would retire on a reasonably comfortable pension, Police & Fire pensions are better than that but only a few at the top (<1%) retire on gold plated pensions comparable with those at the top of the private sector. Dramatically cutting comfortable & low pensions will simply force those people to claim means tested benefits when they retire forcing part of the cost of their upkeep onto future Tax Payers as will already be the case for many in the Private Sector.

The idea that Public Sector Pensions are unaffordable is much bandeied about . The reality is that all public sector pension funds are always affordable; provided that benefits to pensioners, employer/employee contributions and qualifying retirement ages are set at the right level.

This was the basis of the discussions before the Government interfered & turned into a political football.

The destroyed pensions that many in the private sector currently wave about like badges of pride will eventually turn into begging bowls, A race to the bottom with pensions is merely increasing the burden for future tax payers not reducing it, instead the government should be looking at how to provide substainable & comfortable funded pensions for all

@ dave sullivan

> I bet I could have sorted a private pension just as good as the one I have with the 11% I've been paying for the last 16 years.

No need for betting, use a pensions calculator such as the one at Hargreaves Lansdown. You may be surprised as 11% is *very* low. I've been paying 25% since an can remember, and 50%+ over recent years, and no way could I swan off at age 50 on 60% of my final salary, index linker forever.

I just hope that David Cameron finds the time to read these comments.Successive governments have been afraid to grasp this nettle. Lets hope he has the guts to hold firm.

I'm sure DC will find the time to sort out private medical care, education and security whilst he is at it. Danny boy and NC might want to consider this before they need it. Hope the rest of you can afford it :)

The millions of pounds collected from union members should be paid back to its members and all unions should be disbanded as there is no call for fat cat trouble makers in todays world

If the government back down on this issue no one will need a pension as the country will go to the dogs

when I left the local area PLC, power provider and joined the local Council the wages were comparable. Now I am down £5K plus no wage rises plus asked for another TAX to bost Osbourne. Also if I had stayed I would be retired now on nearly the same as I am working for now. People should get their facts right about pay and pensions at the front line of localgov services. The country is heading down without Union help, helped on by the greedy few

And past governments during the last 25 years+, from both sides of the House, were clearly asleep at the wheel when people started living longer - or did that just suddenly happen from 2000 onwards!!

Focus on the incompetence of those we have put in power for the last 25 yrs + and expect them now to lead by example.

Not to mention the £250,000,000 spent in 3 months bombing Libya.

No problem finding those funds then?

Trouble is many folks have not saved enough for their old age , relying on house price increases to see them through. Many of them did not take independent advice. I wonder if Ms Bourke did ?

Did I read recently that about 20% of Council Tax is set aside for Public Sector Workers Pensions ?

Is Ms bourke moonlighting from Fox News? I have rarely read such fatuous, ignorant biased claptrap apart from in the red-tops. Two points: in fact the private sector is highly dependent on the public sector, not only for the contracts the public sector is forced to give them at hugely inflated cost, but it is the public sector that provides (largely) the education and healthcare that almost all of us use. You don't see BUPA providing A&E, do you? The fact that those with private pensions whether as a scheme or as individuals have been ripped- off and/or defrauded is the real unaffordable scandal here. Join a Union and fight with us! One final thing - look at the interest payable on UK Government bonds, and you 'll see that we're not bankrupt, not by a long way.

Ted York, no, I'm not confused, the argument with regard to public sector pensions is ultimately about the cost of public services, and pensions ( which is effectively part of the lifetime remuneration for the public servant) is a significant piece of that, and has grown through changing facts of life, thus needs revision.

True on the face of it, the argument is about pensions but the headcount (a component of cost) employed at present in the public sector is of concern to many, who regard many of those jobs as unnecessary, whether by public or private sector for that matter. The unions one suspects aim to maintain the status quo, thus headcount is unavoidably part of the maths.

Wherever public sector pensions stand with regard to the priorities of state concerns, it is a significant factor to be addressed nonetheless.

look you out of date thatcherites, did ther public sector cause the banking crisis that caused this whole financial crisis,did my bin man deliberately screw up the financial markets,take a few million in bonus then leave the wreckage for the country to pick up did he heck. so lets drop alot of this public sector blame shall we. for a start i reckon i have written to this guy eric pickles so many times on the fat cats in public sector at local gov. level, but what reply do i get simply this ,'its not the governments job to micromange the public sector,. so lets get it straight the government are simply spoiling for a fight with public sector because they dont have much of a clue how to get the friggin economy to work better. take the head of JCB who yesterday said openly on the BEEB that the government hasnt got the faintest of an industrial strategy and if guys like him tell it how it is then you have to believe them. every government i can recall in living history has allowed to public sector to get bigger so now they are the bad boys well it wont wash. you cant blame them for reacting to this who wouldnt. we have laid down like lambs over the last couple of years with labour and tory government upping our working lives to god knows what age and not one person has hit the streets to say no its not on. good luck to the public sector,they will have to take a hit like the rest of us but they have to defend themselves where they can.

Quite a debate ! But a lot of the discussion does not concentrate on the fundamentals. A report around a year ago found that final salary index linked pensions in the public sector required total contributions of 40% of salary for half salary retirement at 60. And for police and firefighters the figure was 70%. Clearly public employees are not making personal contributions anywhere near this, and the taxpayer cannot afford such huge contributions. So there has to be mega change.

The "average" pensions, or individual schemes are hardly relevant. The maths is still the same. Some fund reviews were carried out several years ago and are well out of date with current actuarial calculations.

Another point often made above is how the private pensions were no worse, and how it is their fault that the comparison with public pensions causes so much grief. This is a silly argument since it was simply that private companied realised that they could not afford to keep the schemes, so thay had to change. Unfortunately too many people in the public sector will not accept that their schemes should have changed years ago, and still cling to the belief that they should be entitled to benefits which are getting out of control and that all private companies should be able to afford similar schemes. If this were possible it would cause massive inflation. But then as everyone's benefits would be indexed to inflation...........

No - public employees have to accept that with longer life expectancy and low interest/annuity rates the world has changed, and that the rest of the Country has already had to accept this truth. And whilst the rest of the Country has already tightened its belt it finds itself paying more and more towards public employees who do not know what a belt is !

Of course, most people in private employment never have been members of final salary schemes, so, in fact, to use such schemes as may remain as the other side of the coin is not valid.

Another point is that the Government are giving an unearned sop to the lower paid. I cannot understand why their contributions should not be increased as the maths is the same whatever salary one is on. It is setting a dangerous precedent. Why should the lower paid have a greater pension subsidy than the rest? Those in the private sector have to take the same financial arrangements whatever their pay. Just like the cost of bread is the same for us all, surely the cost of financial products should be also.

What we are all forgetting is the public sector pensions are a SECOND pension after the state pension. Rather than subsidising lower paid public employees would it not be better and fairer to increase the basic state pension for all and therefore have a level playing field. Otherwise they will have to appoint many extra public employees to oversee the rules for the lower paid. For example what happens if someone does overtime or claims allowances?

I can never understand why binmen are seen as the lowest paid public employees. The Birmingham binmen are renowned for their outrageous earnings.

In summary those who argue against public sector pension overhaul are simply stating that they are entitled to a growing slice of a shrinking cake, and that their slice should grow much faster than the cake shrinks If you visualise this then you will quickly see where it all ends up !.

Bananas anyone ? But with out climate a cabbage republic is more likely

Apparently public sector pay is better than in the private sector. Working conditions are also better. Pensions are also better. So why do most of the people who seem to comment here choose to work in the private sector?

From my personal experience, it seems that when times are bad, the private sector turns its anger on the public sector; but when times are good, the private sector forgets the public sector even exists.

Quite A4 and Jon - Look at the senior managers. That is where the waste is.....out of interest what was total contributions for MPs or was that not included??

Think I said we should all (Public and private) pay more then you would be less dependant on the state.

To Jon's comment "Quite a debate ! But a lot of the discussion does not concentrate on the fundamentals. A report around a year ago found that final salary index linked pensions in the public sector required total contributions of 40% of salary for half salary retirement at 60. And for police and firefighters the figure was 70%."

Sort of. The percentage figures you quote of 40% and 70% were based on the most pessimistic financial assumptions possible and therefore not plausible ie they provided the upper boundary of cost given an extreme set of circumstances. The most likely cost is around the 25% mark, still quite high but not 40%.

How can we trust the government to deal with pensions honestly when they have already switched index linking for pensions in payment from RPI to CPI? CPI is NOT an accurate measure of inflation as experienced by individuals and they know that full well. They try to rig the figures to suit their argument. All governments do.

Let's not kid ourselves. This government has money or will go into further debt for causes that suit it. So bombing Libya, for example, is a choice made by that same government that wrings its hands and says public pensions are unaffordable. These pensions were affordable and if the economic crisis has rendered that to be otherwise, why is it that temporary arrangements are not brought in for the duration of that crisis? Or is it that they know this bank and borrowing induced mess is here to stay?

@sgjhaghsdg

I think your imaginary public sector worker deserves 60% of his salary at 50 after all in order to get it, in the majority of public sector schemes , he would have had to have started full time employment at about age 3 & that's assuming he got a full pension at 50 which he wouldn't

God, some of the arguments here are like those between kids quarreling over a bag of toffees or somesuch. Irrespective of the private sector condition the public sector needs to face up to the reality, that as presently constituted they are unaffordable and government must addresss the matter for all our sakes.

@ Rpbert Boakes

> I think your imaginary public sector worker deserves 60% of his salary at 50 after all in order to get it, in the majority of public sector schemes , he would have had to have started full time employment at about age 3

Imaginary? I don't deal in imaginary. This is a very close family member, who has never broken a sweat at any stage of his public sector employment, but who has just been offered an ENHANCED pension to retire at age 50, I recently attended his retirement party and had to sit there grinding my teeth and trying to think charitable thoughts. It wasn't easy.; I'm his younger brother, who's risen higher by every metric other than generosity of pension, where I'd have had to achieve 10x what he has to come anywhere close.

No-one needs to invent or imagine anything regards the public sector as the objective truth tells us all we need to know.

Messrs Cameron and Osborne - just do the deeds - the private sector - who create the wealth - will never for give you if you don't - while you are at it - why not move all PS pensions into defined contribution schemes like the rest of us - and make a real difference to the costs ???

In the case of teaching were the vast stress of the job makes many teachers ill and unable to continue their careers, it would be sensible to keep the retirement age lower as is the case with uniformed services. I don't know whether any other public sector jobs would fall into this category.

I once met a senior public sector manager who told me that he had left school at 16 and joined as an apprentice, now at 56 he had 40 years service under his belt which gave him the maximum 2/3 salary pension and that he had done a calculation to work out the difference between the costs of coming to work (travelling, cost of second car, suits, lunches etc) or retiring. He came to the conclusion that he was only £60 a week better off working and that the tea lady was effectively earning more than he was. So he took a redundancy package and retired!

The comments on this item appear to be roughly 95% from private sector peole and 5% from public sector people. I wonder why that is.......

Primarily, of course, it is because more private sector people have enough capital to worry about the issues covered by Citywire.

But I suspect it is also because fewer public sector people are money-driven than private-sector.

You do need a public sector to do certain things - privatised defence anyone?. The size of the public sector is chosen by us and our politicians - if you want less public service then cut the budget, there will be fewer employees, less will be spent and you will get a reduced service.

But if you want good people in the public sector then you must treat the ones you do employ reasonably. What is worrying about the current government is its limited management experience - mostly they have backgrounds as political advisers with a dash of public relations.

And this encourages them to set us up against each other - public and private sectors each laying into our stereotypes of the other.

I once met a senior public sector manager who told me that he had left school at 16 and joined as an apprentice, now at 56 he had 40 years service under his belt which gave him the maximum 2/3 salary pension

2/3 having joined over 40 years ago at age 16. That scheme didn't give 2/3 rds I'm afraid.

These war stories are great.

'privatised defence anyone?'

Its quite interesting how dysfunctional and expensive the MOD is, you could privatise that and see a huge leap in service to our soldiers, etc.

Gone in 60 seconds - As an ex-pensions lawyer I know there are a lot of public sector schemes that give 2/3 salary for 40 years' service. And the early retirement packages, on top of the pension, have to be seen to be believed. All negotiated by the union, of course.

Woodberry - The reason why only 5% of these posts are from public sector workers is because they are keeping their heads down.

Then find me the scheme that pays 2/3rds for 40 years service that someone who worked in the 60's could get? Police? For the normal public sector it was 80th schemes i.e. 1/2 salary. I'm no lawyer but just looking at the facts as they existed then. If you find it let me know and I'll sue my wife's former public sector employers for fraud.

"We have all got to make sacrifices in today’s tough economic climate"

Really? Why is it then that the CEOs of the FT 100 companies have seen their income rise 30% odd over the last year. Don't even get me started on the bankers,

Mr Woodberry, if you are not money driven, why all the fuss; for your toils to be purely vocational you should eschew this union intervention on your behalf.

Quite where you get the 95/5% fraction from all of this chatter is a mystery; a Nelson touch perhaps.

The 5% - if that, it is - is sufficient to underline the problem we behold, the self-centered presumption of some in the public sector.

Sorry, strike or do what you like, but there is not enough money in the pot to pay inflated civil service pensions. Don't go looking to blame the current government, the fault lies well within the Blair/Brown era when public employment and conditions of service were boosted to increase the labour vote. Turkeys don't vote for Christmas, but these turkeys should forget their blind obedience to unions, the labour party and all left-leaning organisations that no longer subscribe to the thinking of the real world.

dr ray, CEOs in private industry and Bankers are red herrings in this argument, most of the costs involved in this debate are for labour; employees or workers for the government, which make up by far the greatest proportion of cost on the tax payer. Agreed, Finance (the bankers et al) is a mess and has failed us; that is another matter; CEOs pay (greedy often, alright) is governed by the market place, which is unforgiving of poor business cases.

Come on girls, let's up our National Insurance contributions to 30% thenw e can all have a decent pension.... sorted.... LMFAO

The levelof comment on this article is pathetic. Are these really intelligent people because most of them sound like your average Daily Mail believing every half truth they read.

The current NHS scheme contributes £2bn more to the government than is needed to meet the current pension requirements - a nice contribution the their revenue.

Most private pension schemes took long pension holidays in the 1990's and then realised that they had got the sums wrong after the crash in 2000. That never gets mentioned.

Nobody seems to realise that unless people have a decent pension, the state will end up having to pay more in the long term when they can no longer afford to pay for their care, etc.

Everybody should be entitled to a decent pension. However I wouldn't trust the private sector to provide one. How many pension mis-selling scandals have there been? If people think life in the public sector is so great, why don't they go a get a job there?

An Elder One - The inclusion of public sector numbers in this debate is only only relevant insofar as an increase or decrease has a bearing on total costs borne by the tax payer. However, the numbers are not increasing as I understand it, and any shrinkage would result in a saving, I cannot see how it is relevant to this immediate debate.

The private sector maybe the engine that drives the economy but the public sector is the oil which helps give it the means to do so, whether by restoring health, keeping public order, guarding public safety, regulating private industry or whatever. History offers immeasurable examples of the failure within the private sector to work for the common good, of failure of self-regulation, and exploitation for its own ends. Not everything can be left for the market to address.

So both sectors are needed but the public sector cannot be governed by market forces because that isn't its function. Trying therefore to draw direct comparison between public and private workers is futile. When a private company is successful it may pass some of its rewards to its employees; likewise if it begins to fail, those employees may pay with their jobs in worst case scenarios. The public sector provides many varied services but few areas would or could operate like that.

I suspect much of the real debate on here is aimed at the unions. Public sector unions have large memberships and are better placed to defend their members' rights. Private sector workers are generally unrepresented, or in weaker unions, and vulnerable. And that breeds resentment which in turn polarises this debate.

Finally, there are many aspects to the debate about pension reform, and a broad brush cannot be used across the whole public sector, but that is precisely what the government is attempting.

An Elder One - The inclusion of public sector numbers in this debate is only only relevant insofar as an increase or decrease has a bearing on total costs borne by the tax payer. However, the numbers are not increasing as I understand it, and any shrinkage would result in a saving, I cannot see how it is relevant to this immediate debate.

The private sector maybe the engine that drives the economy but the public sector is the oil which helps give it the means to do so, whether by restoring health, keeping public order, guarding public safety, regulating private industry or whatever. History offers immeasurable examples of the failure within the private sector to work for the common good, of failure of self-regulation, and exploitation for its own ends. Not everything can be left for the market to address.

So both sectors are needed but the public sector cannot be governed by market forces because that isn't its function. Trying therefore to draw direct comparison between public and private workers is futile. When a private company is successful it may pass some of its rewards to its employees; likewise if it begins to fail, those employees may pay with their jobs in worst case scenarios. The public sector provides many varied services but few areas would or could operate like that.

I suspect much of the real debate on here is aimed at the unions. Public sector unions have large memberships and are better placed to defend their members' rights. Private sector workers are generally unrepresented, or in weaker unions, and vulnerable. And that breeds resentment which in turn polarises this debate.

Finally, there are many aspects to the debate about pension reform, and a broad brush cannot be used across the whole public sector, but that is precisely what the government is attempting.

Its not just about pensions.....too many public sector jobs pay far too much......head teachers on 100K plus....same with GPs...local authority managers..etc...etc.........but of course this goverment is populated by college boys and is spineless.

As for the much vaunted private sector its not all Satchi and Satchi I dont call driving a parcel delivery van or working in a supermarket etc rocket science.

My pension is only a fraction of my income.....how.?....easy..I didnt waste my money I invested it.

Private or public as far as pensions are concerned forget it ..its gone ( unless your earning the type of salary Lorna is..)...the public debate is meaningless....its later than you think......its every man for himself and to be honest its bloody years overdue.

look guys,the government are hell bent on tasking on the public sector to deflect from their useless attempt to sort out the banks.

what happened to ring fencing the ordinary bank account we all read about last week,bog all i can tell you so they want to blame the public sector thats all they can do well if they want a fight then they will get one. yes public sector will have to pay more and get a bit less,not their fault not ours ,blame successive governments and labour was the worst but if you want public services you have to pay for them isnt it the case that in some areas over 40% of council spending is on social services child protection and so on,correct me on this but i know its very big.the bit that gets me is why the gov and specifically eric pickles,he of lots of hot air, wont deal with top execs salaries,wont micromanage thats what they told me in writing so the government has only themselves to blame about top public sector salaries afterall they signed them of DIDNT THEY!

look guys,the government are hell bent on tasking on the public sector to deflect from their useless attempt to sort out the banks.

what happened to ring fencing the ordinary bank account we all read about last week,bog all i can tell you so they want to blame the public sector thats all they can do well if they want a fight then they will get one. yes public sector will have to pay more and get a bit less,not their fault not ours ,blame successive governments and labour was the worst but if you want public services you have to pay for them isnt it the case that in some areas over 40% of council spending is on social services child protection and so on,correct me on this but i know its very big.the bit that gets me is why the gov and specifically eric pickles,he of lots of hot air, wont deal with top execs salaries,wont micromanage thats what they told me in writing so the government has only themselves to blame about top public sector salaries afterall they signed them of DIDNT THEY!

Dear Dougal the Dog

The reason why most companies took pension holidays, rather than improving benefits or reducing members' compulsory contributions, was because they were more or less forced to therwise.

The Surplus Regulations of 1986 saw to that !

PriceWaterhouseCoopers produced an interesting report on this subject in 2009 comparing a private sector worker and a public sector worker of the same age. It's called the Tortoise and the Hare. The private sector worker having lived the high life in earlier years suddenly wakes up to the fact that the lowly earning public sector worker has done much better than them especially in the later years of life. Sounds familiar?

You can find a summary of the report here and on the right hand side of the screen you can click to download the full report.

http://www.ukmediacentre.pwc.com/content/detail.aspx?releaseid=3233&newsareaid=2

I have a feeling that the threatened strikes won't go ahead after the first one next week. We are not that stupid and do not need union leaders, who are riding the gravy train, to tell us what to do and what is good for us. But there we go, they have to do something to try and justify their super salaries, I suppose. I worked in the private sector until I was 68, and I have many family members and friends who have worked in the public sector, and do you know they don't have a clue what % of their salaries they pay into their pension funds! And they are all professors, lecturers, teachers, NHS nurses and managers! If they are that stupid, then no wonder our health and education services are in such a mess...

As usual this debate has morphed into a Daily Mail level of discussion based on half truths and heresay. Here's a good rumour - I heard that asylum seekers are now getting pension contributions paid whilst awaiting repatriation.......

Ted York - I do not think you understand that this is a permanent and growing problem. It has NOTHING to do with the financial crisis. It should have been addressed 30 year ago. All pension rights should have been annually adjusted to take into account average life span/ You use the costs of Libya etc as some sort of argument that public pension reform can be deferred. But the cost of such wars is chickenfeed compared with the huge and growing pension deficit/ Anyway these are all paid for (and more) by Brown's onging annual pension raid of £billions per year, so those with DC schemes are suffering the consquences of that - not those in DB schemes.

xxxxxx - do the maths. If you work 40 years and retire for 25 then, assuming investment returns equal inflation, on a simple basis for half salary pension you need to contribute 31%. But the real figure is higher as firstly public sector wage inflation has been very much higher than inflation to the extent that public sector salaries are now better than the private sector. Secondly people get promoted. So somone starting on £2OK and ending up on 60k (typical NHS middle manager) needs a contribution of TWICE that id promotion is linear. And just like some senior people in the private sector, the figures go through the roof for senior public executives. But leaving these out and accepting that not everyone gets promoted, the 25% you quote is long out of date and 40% is realistic.

ynys - so teachers should be a special case? Some do have terrible times, but the solution is to address kids behaviour. So,e of these teachers may be in the wrong job and lack the skills to motivate and control - not all but some. Then there are all the vast majority of teachers, lecturers and the rest of the educational establishment who probably have less stress that someone working in highly competitive private businesses and who have less holidays !

Woodberry - uou are missing the point. Public sector pension benefits have rocketed over the past 20 years such that the overall pay package (and with basic pay having overtaken the private sector) becoming unaffordable, Yes we need public services, but that is no argument for paying well over the odds for them.

Dr Ray - yes, anyone can find examples of very high pay - but these are a tiny minority of the population and does not make the problem go away. We have to face up to it and deal with it. No more "we didn't create the financial crisis so it's not our fault". This gigantic pansions deficit is caused only by public employees having seen huge increases in their benefits which have become unaffordable. Nothing to do with bankers, high executive pay or men from Mars/

Doug the Dog - the maths of the NHS scheme is the same as the rest. If it was wholly funded by the employees - like a DC scheme - then that would be a different matter. If it has a surplus because the taxpayer put in too much, then the taxpayer should have the right to take some back. And I would be surprised if it really has a current surplus unless it had fund managers the likes of which we could only dream about. It may also be that with a high turnover of staff, people who leave subsidise those who stay.

And Ted York again - under the last government the number of public employees increased by 1 million. This had added a huge latency to the situation. We got by 15 years ago without them, so the simple answer is to cut these jobs now.

Barry Watson blames the government. We elected out governments. They have failed to act until now. At last something is being done, far too late and far too little. Few public employees want to know that millions of people in the private sector with DC schemes have seen their pension prospects cut by over 50% in the past 15 years. but still expect these same people to pay more and more tax to give better and better public pensions.

Public employees do not appear to realise that they have, perhaps unintentionally, been taking a rocketing slice of the cake over many years. We are not asking them to pay us back, but we are telling them that this gravy train has to come to an end, Not by much compared with many others. They will still be enjoying far more gravy than many.

Take a look at MP's pensions.

http://www.parliament.uk/documents/commons/lib/research/briefings/snbt-01844.pdf

Public sector pensions are typically based on 80ths i.e work for 40 years to get half your pay as pension.

People in glass houses (of parliament) shouldn't throw stones

We all know that pensions - both public and private - are in a mess. But the level of bile being spouted in some of the comments here makes me genuinely sad.

The right wing press has succeeded in pitting public sector workers against private sector employees as though they were different species - and articles like Lorna's further embitter the division.

The Hutton Report - a balanced and fair document by most people's standards - makes clear that reform is needed if a public sector pensions crisis is to be avoided. But Hutton has also stressed that we must avoid a 'race to the bottom'. Why should public sector pensions be brought into line with company pension schemes if these are not deemed, objectively, to be the best solution? Just to keep Daily Mail readers happy?

A rise in pension contributions from public sector workers seems both necessary and reasonable - but it's crucial that we try, properly, get union backing for the changes that are made, and implement them in a way that is calm and rational.

Danny Alexander hasn't helped matters, and the tabloids won't be satisfied until they have stoked union firebrands sufficiently to cause the 'summer of discontent' headlines they are so desperate to print.

I worry about how members of my family who work in the public sector (on FAR lower salaries than I earn in the private sector) will afford pension contribution increases of up to 5%. In the case of one individual, already struggling to pay rent on a south London flat, travel costs, etc., this rise may render her pension simply unaffordable. And Hutton has warned that, in this scenario, we could face an exodus from public sector pensions - storing up problems for the future that could have been avoided by more balanced reforms.

Ted York, I don't suggest that we can do without the public sector, that is nonsense; it, is the agent of government that enables law and order to prevail and essential state objectives to be implemented. My contention is that it has become distracted by poor legislation and enlarged beyond what is affordable or even necessary. Some of it's function could be done by the private sector and synergies derived from combining the two, in for instance, the health service.

The private sector with the exception of Finance - which is another distinctly separate problem that needs to be addressed - in general is self-correcting, subject to dictates of productive supply and demand; the public sector is not and has thus grown out of proportion.

The government is attempting to reduce the consequential cost and has to start somewhere; pensions is an obvious place to start, bearing in mind notions of fairness in the minds of all workers in the realm and issues such as increased longevity of the human being.

Yes, reducing numbers employed in the public domain will by itself reduce cost - just a thought; if the numbers were not so inflated then one might think that pensions might have been overlooked - but that I think is more problematic and will taken longer to bring about.

its not the low paid public workers who are the problem its the people who can retire on above average earninings £24.000

then walk into a another job for the public sector. best idea was cap the final salery for all at say £36.000 and let the well paid pay for a second pension if they want one. to many people you hear leave in the public sector army navy doctors mps and police fire chiefs leaving with big money pay offs , dont forget it happens in the private sector as well. top people in companys earning more than 20 times bottom wage that could have bought new machines to boost a companys performance.the higher up the ladder the bigger the take but the wage gaps get bigger by 5ks or 10ks or20ks pigs in the troff come to mind i bet these bosses dont listen to share holders like people at the top of goverment bodys dont care what people think they have the power with waste public money just look at the council water drinking bills.gallerys.comitees

mps should have no expenses just free accomadation in aflat in london and train fares free as we already pay for it with grants.they can stand up if they cant get a seat.

Jon

I don't need to do the maths. Someone else has done it for me. Actuaries employed by Lord Hutton. Perhaps you had better send your calculations off to him to show where they have got it wrong.

@ Jon

"Dr Ray - yes, anyone can find examples of very high pay - but these are a tiny minority of the population and does not make the problem go away. We have to face up to it and deal with it. No more "we didn't create the financial crisis so it's not our fault". This gigantic pansions deficit is caused only by public employees having seen huge increases in their benefits which have become unaffordable. Nothing to do with bankers, high executive pay or men from Mars/"

I think you miss my point. What is going on and has been for years is a massive transfer of wealth from the working man to the super rich. In 10 years the renumeration (or compensation as they prefer to call it) of FT100 company CEO has increased from around x45 to x120 the average wage.

Initially it was done by globalisation and outsourcing which hammered the private sector worker and now it is being done to the public sector.

It is not a private sector vs private sector debate which the media and politicians have portrayed. It is a super elite vs the great unwashed.

Dr Ray - I agree with you. Executive pay in larger companies has risen unacceptably and the pension funds who hold much of the share capital do nothing as it might reduce their pay. And public service execs have seen their huge pay rises in line with "the market". But there are plenty of directors of SME companies who do not enjoy such rewards - we hear of the relatively few who do out of a working population of some 25m.

My point is that if we reduced all of these mega pay packets we would still have a problem. Therefore it is not relevant to use high executive pay as a reason for not sorting out the pension crisis. They are different problems. The pension deficit is huge in comparison, and if we do nothing on the basis that there are other inequalities around, then the situation can only get worse. Already there is a divide between middle England pensioners - those who enjoy final salary schemes and those who do not. The private sector has been forced to act. At last the Government has realised that we have to do the same on public pensions.

If we do nothing than we will end up like Greece, and all public employees and pensioners will have to take a big cut - not just a future accrual adjustment.

xxxxx - do the maths ! I think that you may be confusing the reported taxpayer cost whereas my maths is for the entire cost.

Looking at the National Audit office actuarial report of March, they admit that the figures are very sensitive to the "discount rate" (ie rate of expected growth of funds). They have assumed a 6% long term growth in funds with 2.75% inflation. My Standard Life fund has grown just 3% over the past few years, whilst inflation has gone from 3 to 5%. The trouble is that these actuaries use older historic measures without looking at the real world. Back in Margaret Thatcher's period inflation hit nearly 30% pa as her Government devalued Sterling to pay off the huge debt the previous Labour Government had got us into. We are likely to be seeing much of the same now..With Western economies out of balance - most net importers by huge margins - our currencies are bound to devalue unless we sort out the trade balance. Lower Sterling will mean high inflation, less to spend on imports and more competitive exports. So unless interest rates go sky high too it will be impossible for pension funds to beat inflation let alone make more than double inflation. Therefore my assumption that fund returns and inflation cancel out is far more realistic and prudent. Ask anyone with an endowment policy or general investment fund if they have beaten inflation over the past 30 years. There will always be some exceptions, but the general rule is NO.

The pension companies used to quote some high fund rates in their examples based on the pension industry recommendations. These rates have since been shown to be widely optimistic. I simply do not think that any assumption that fund growth will be more than twice inflation over the long term is sound, As a declining economy the reverse is more likely.

Jon - your last 2 comments are absolutely spot on

Jon - As I said perhaps you should write to Lord Hutton letting him know that his experts have got their calculations wrong.

Public spending has grown far too much relative to private (which actually pays the bill).

Banks lent out money irresponsibly, encourage by the government(s) particularly in the US where the government promoted sub-prime lending and we followed suit.

The taxpayer is picking up all the cost either through taxation for bank bailouts or the excessive printing of money which will lead to massive inflation.

We are all living the consequences of past decisions...... it's too late to change things but it suits the government that the public get distracted by things like this. A likely Greek default will crystallise the debate and accelerate our dropping living standards (just as a bailout of the Greeks will have the same results a little later). I wonder how many private sector/ insurance company backed pensions schemes will survive what's coming?

Dr Ray & Jon, the top execs of the ftse100, for that matter 250, have been taking the p on oay, pensions and hello and goodbye pay offs fpr years, even failed ones get paid, when they should be sacked.

Essentially it is the company employees and shareholders that are being ripped off, and that should stop.

For some years now I have been consistently voting against the remunerations packages as they are an insult for a fairly mediocre job, not being stretched at all. Telephone numbers now seem to be the norm and this needs to be rowed back, a lot. Perhaps all shareholders should revolt and disapprove the packages, and those giving those numbers sacked for allowing the shareholder to be ripped off.

Their pay etc is as insulting as the public sector higher ups. Whilst the tax payer might be annoyed about the private sector executives, they are flaming livid about the excesses permitted by government, particularly the last one, when all the aides were from the unions, and only a few from the civil service, McBride, Campbell to mention but 2 plonkers/bullies.

xxxxx - perhaps I should - but of course these experts have a vested interest in understating the costs of their pensions :-)

The Treasury, Audit Office and Bank of England "experts" have got even very short term forecasts widely wrong even though this has been pretty obvious to the financially savy. So what chance do they have on a 65 year financial product?

My own experience is that as a contributor to my pension fund from age 21, putting a good 20% of my basic salary into it, at age 60 the best quote for an index linked pension I could get was 16% of my base salary. So I would have had to put in around 60% of my salary to get a half salary pension. This is a standard pension fund and not subject to any quirks like Equitable Life. If Brown had not started the annual tax take then the figures would have been less severe.

I believe that all of the pointers, and leading pension fund opinion is that a total 25% pension contribution is well short of what is required for a standard public service pension now. This was the figure leading pension experts were quoting as a minimum some years ago, and life expectancy has risen whilst annuity rates have fallen since..Hutton has come up with a low figure to avoid controversy, but then points out that even this is unaffordable.

So just because government "experts" say something it does not mean that it is right. Unfortunately they do not get the sack when they are wrong as unlike those in private industry they are not held accountable for their mistakes. And Public financial accounting has long lagged the professional accounting standards with huge off-balance sheet funding (CF Enron) and the failure to recognize accrued liabilities

What seems missing from some of this is the issue of responsibility - there are perfectly normal, mature and healthy adults on this thread arguing without even realising it that the public sector CAUSED the financial crisis.

The public sector did not cause the banking crisis. Envy is not a reason to cut the pay of the public sector - and their penions are an aspect of their pay. Private pensions are a corrupt lifestyle choice that invests in the unethical and risky things that caused the global financial situation. Private pensions are not pay. The rubbish about a 'future accrual adjustment' being different to a 'big cut' is absurd. The truth is that they are intending to cut the ultimate pay (including pension) of teachers by an average of £200,000 - and these people have done nothing to cause the situation. Teachers and nurses are also not paid much. A person who manufactures and markets chewing gum is NOT entitled to an opinion to the same degree as a person who polices, cleans up, mends or teaches society.

The simple fact that private pension schemes see such drops in their forecasts does not mean you get to cut public sector pensions just because they exist. The situation is contractual: they don't have to work and live under terms they don't agree with. And for that matter they don't have to tolerate class struggle from above.

It does strike me as a rather big mistake the government has made in terms of the size of the proposed cuts: in order for a teacher for example to make up the amount of money they will lose if the cuts go ahead, they would have to strike for on average something like two years continuously. (quick back of envelope calc: consider £200,000 as about £90.000 bearing in mind inflation and the fact that some of the increase is increased contributions as well as reduced accrual and times that by about £180 for a contact day lost due to striking=500 days of striking, not including the fact that inflation will in 3 years reduce the frozen pay of the public sector by about 12%)

If it's a choice between on the one hand living on my knees and allowing private sector employees to steal my money to pay bank debt off with and make themselves feel better for their job selling chewing gum for a living, or dying on my feet with my hands around the throat of one-

with those figures I'll take death, thanks. May the best man win. That would be me.

Anonymous 7 - not sure why you have to be anon - but I do not think that you understand the situation.

1, The banking crisis has NOTHING to do with the much bigger pension crisis.

2, To start to judge people's worth by what they create is a slippery slope and emotional.

3. The fundamental point is that public pensions have become worth far far more than they were 20 years ago. Thus public employees have seen a huge increase in their pay over and above their pay rises. Now that their pay is above that in private industry, to have such a huge benefit on top means that they are being paid well above what was intended. Someone has to pay for this.

4. The long term prosperity of the UK is dependant on having no trade deficit. Thus we have to encourage both exporting industries and those which reduce imports. We can afford no public services unless we get this right, as the alternative is a slow decline as Sterling falls. During the last 20 years, although GDP has risen our real prosperity has fallen. GDP is a measure of "economic activity" ie spending, and since we have and continue to spend money we do not have - continuing deficit - the GDP has been maintained at the expense of a growing debt which our children will have to pay off. Our trade deficit continued to grow whilst Brown boasted about our prosperity. He created 1m new public employees which we could not afford. He raided our savings and raised a myriad of stealth taxes to help pay something towards this, but still by no means anything like enough,

5. Civilisations have been able to afford public services only when their basic economy has flourished so that it can support people who do not immediately contribute to wealth creation. Therefore we have to get our basic economy right, If we do not we will go further down the same path like Greece. The only remedy then will be savage public expenditure cuts. You cannot just ignore this.

6. What you are implying by your resistance to reform is that either we go bust or you tax everyone through the nose on our way down. There is no alternative. Before anyone says "we are not in the Euro" a continuing devaluation of Sterling would have the same effect.

The bottom line is that public expenditure has to be cut dramatically. We cannot grow the economy fast enough, given our current position and competition to support current levels. And furthermore, if we do nothing public expenditure will increase faster than any possible improvement in the economy and thus the situation will spiral out of control.

I do not believe that enough people realise the seriousness of the situation, and what we are letting future generations in for. Too many people can think only of themselves and in the short term. Too many do not have the guts to face up to the situation, or the understanding of the enormity of the problem.

And to cut public expenfiture by the huge amounts required needs more than just stopping Trident of fighting a few wars. By all means let's do that, but we have to reduce public employee pay packages to a market level and make big cuts in jobs (although in the short term the latter will be partly offset by greater welfare payments). We need to channel effort into reducing the trade deficit - cut imports and increase exports. More resources into the food and engineering businesses. Less use of imported energy. And so on.

This is primarily not a fight between private and public employees but a fight for ecomonc survival.

The fact that public employment has become so well rewarded is simply a rational and factual observation. Therefore we have to review this before we make huge cuts in public employees.

Just one point missed off above - public employees have not individually caused the crisis, but collectively they have, The cost of employing each individual has rocketed in real terms, and we now have far more people in the public sector, Public expenditure under Labout rose from around 42% of GDP to 52%. All this in a world in which we are finding it harder to compete. So it is absolutely incorrect to state that public employees have not created this crisis as they have in terms of their cost, We have a deficit from bailing out the banks (relatively small), a state pension deficit and a public employment deficit. The latter is huge in terms of commited costs and we can do something about it. We do not have the option to do nothing.

So please let us all face reality and not pretend that somehow public employment did not create the crisis and that somehow we can find some petty cash from the rich to sort this out.

For example, this job found on a public sector jobs board: £70,337- £76,885 pa plus car, to be a "Head of Achievement" - the ad says "we are keen to recruit a passionate, committed and highly able professional who can continue to support the drive for raised standards in a context of increased school autonomy and diversity. You will lead a successful team of advisers and standards and quality will be at the heart of your work."

Is this really worth £75k + car + pension, all paid for by current and future taxpayers?

It has to do with the pensions crisis because it's that that has made people decide to attack public pensions.

'What you are implying by your resistance to reform is that either we go bust or you tax everyone through the nose on our way down'. - Yep. Actually you might be able to discern my subject specialism when I point out that 'die on my feet' stated that, it didn't imply it. That is indeed exactly what I'm stating - or rather, use taxes to pay for things, that's what they're for. Previous posters have pointed out a number of ways such money could be found, although even they perhaps don't realise that public sector pension schemes have already been raided a number of times in the last ten years. It's a great way to argue they're invsolvent - take money out of them and make them insolvent. Then when you claim they are, they will be.

You see the counter-side of what you're saying about civilizations is that they can't afford public sector services when they have a poor economy - it's actually the other way round. There is no civilization in that situation. Because how do you measure civilization? The only possible justification for a government to exist is to protect its civilians, educate them, care for them and provide for them - otherwise what you have is not a society, but a feudal system.

Highly amusing you call me 'emotional' for judging people 'based on what they produce' - seems like a pretty good means of judgement to me. Got a better one? How much chewing-gum they sell? You don't by any chance sell or market chewing-gum do you?

The vast majority of public pensions pay out a tiny amount, Jon - most teachers' about £10,000 a year. There are now many teachers, especially young ones, who cannot afford to pay into their pension scheme. Consider this when you reflect on the warnings about the amount of pension provision people are now making - down 20% from 15 years ago. It won't just be council workers living in poor conditions and from state benefits in 20-30 years' time, it will be people with degrees and from all walks of life.

Additionally try to understand what it will lead to in Society, because that is the only thing that matters - the remuneration (not pension) of teachers will reduce by at least 12% over the next three years, and then on top of that they will lose about £200,000 each in pension entitlement: that does mean they will all leave the profession, except for the stupid ones. Then there will be a generation of people incapable of even having this discussion, because their teachers will be failed people with no aspirations.

As to sources of revenue, the government will try to deflate out of the current situation. If the public sector pensions are cut as you propose you'll be left with a wasteland that is solvent. Good for you.

'More resources into the food and engineering businesses. Less use of imported energy' - are you aware that people are resources and have to be trained, to have qualifications?

Death. Throat.

So Jon, it is my fault along with my colleagues?

Get a grip! It is not the employees, what did they have to do with the pension and setting it up?

I think everyone agrees it should have been sorted decades ago but it hasn't. Trying to bring things into line in quick time is unfair.

Go and moan to whitehall who should've sorted it. Not me or anyone else.

Failing that there's a job that Steve123 has spotted.

these jobs are there because the goverment off the day is weak and wont take control. the people at the top in councils who are out off touch with public just dont care about waisting other peoples money just look at the new fad of drinking water fountings in offices-whats wrong with the tap.councilers vote by party lines and not with thought about what they are voting on like the goverment. some things labour say is wright and some things the cons say is wright but you dont see them vote yes together. make the cap on salery /pension 36000max then we dont get the jobs for the boys again.

Agreed Jon;

Ted Ray, just picked up on a remark you made some way back. The Public services must be judged by Market considerations, despite the valued function they serve they are nonetheless an oncost for productive business that 'bakes the cake' we all share in; just like any other oncost, such as research and development for example which is needed to improve/invent product and improve productivity. In business these factors have to be tuned to suit the overall business model to maintain profitability for everyone's benefit - agreed some individuals take arguably more than their fair share in this matter, but that does not kill the argument - in that calculation all components of oncost must be treated in like manner; it cannot be argued that public service is above it all and untouchable as inferred by your 'holier than thou' implication. By this calculation the size and recompense of our public services must be judged. It would of course help a lot if we could increase the size of the industrial private sector to improve GDP.

PS:

The public sector must apply methodology to their activity and find ways to become more efficient in order to do their task with less headcount and at the same time adjust the level of lifetime remuneration to compare fairly with the private sector; after all, most of us are or have been employees (labourers) in it together, in our careers; labour is by far the biggest component of production cost.

The best minds of Government and unions should sit down and thrash this out and forget the strike.

'In business these factors have to be tuned to suit the overall business model to maintain profitability for everyone's benefit - ' NO. This is not what business does or is for. Businesses, I think you'll find, are about their own benefit. That's why we call them 'businesses'. Just saying.

Btw Jon, your chosen appellation doesn't exactly denote your address and phone number does it?

What's your point Ben Coulthard; in the dictionary the word 'business' has many interpretations, with and without adjectives; I was not aware yours was a commonplace however, in any case you are well aware of mine, namely, a commercial or industrial concern for the purpose of making profit. In the process workers are employed and provided livelihoods from sale of the products they make. UK industry overall is the thing that goes into GDP to serve benefits to everyone.

Argue about individual shares of the profit if you like and I accept there are notional abuses, but that is the way it works and if that principal is abused too much or poorly balanced (tuned) in any particular company, then it will go bust and/or attract attention from others.

A further point Ben Coulthard, you are confusing the meaning of business with your implied ethical overtone; I did not say that businesses are set up primarily for the benefit of those employed - a rare to most unlikely occurence - but that they benefited nonetheless. In the process it behoves the employer to maintain an adequate, healthy, reasonably happy and proficient workforce in order to secure success , namely profit. Not everyone in the business will be entirely happy with their lot; that's life!

"An Elder One" - Good to know that recognise a public sector is necessary. I couldn't agree less with you though. The health service is exactly the sort of area where there should be no private involvement, in my opinion.

The private sector might be self-correcting in the theoretical market place but in reality it doesn't work like that.

There may be a need to rationalise the public sector but many of the jobs that people feel are not required tend to be the higher paid ones I suspect. There may be a case for culling some of these jobs but just as the private sector expands with a greater population so does the public sector. Supply has to satisfy demand.

In further posts you discuss the meaning of business. Well private business only exists to provide a profit, not to satisfy a demand. Services in demand that provide no profit are of no interest to private businesses whatsoever. Look at bus companies for example, and their routes and schedules. Frequently they are subsidised to run services!

Following on from that, why are private businesses interested in being involved in the health service, for example? How do they make their profit? From cost savings, presumably. Who suffers from these cost savings? The workforce. It just transfers the "wealth" (pay) from the employee to the shareholder/owner. The taxpayer will not benefit because there is no restriction on taxes that the public are asked to pay. The consumer will not benefit, except by greater efficiency (in the true sense) but there is no earthly reason why that cannot be achieved in either sector.

Jon - I beg to differ. The clamour for the changes to public sector pensions is related to the financial crisis. You dismiss the figures used in the review as being conservative. Well, if so then a new review is in order. Public sector pensions have been revised in the past few years, and new entrants are already on different terms in many areas. Even Hutton is saying that moving too fast will be counter-productive.

The last government considered public sector pensions were at that point affordable. Only the finacial crisis has shifted those goalposts - and the Tory-led coalition of course.

The reality is that when the private sector was riding the crest of the wave no one gave a jot about how the public sector fared, pensions or otherwise. The introspection has only begun now. And I believe it was you that talked about real prosperity falling over the last 20 years. I think it has been falling longer than that, and the lack of addressing the skewed distribution of wealth has only re-inforced its effect. The effects of the re-distribution of wealth that gradually followed the end of WW2 faded, and the sell off of state assets only created a temporary bubble, otherwise it has been all downhill for the majority. And that in its turn has created a need for a larger public service in part, too.

If people were employed and offered pensions on whatever terms, I think it reasonable for that pensions contract to be honoured - like any other contract. That goes for both private and public sectors. The fact that public sectors pensions are underwritten by the state is irrelevant. Under current proposals both new entrants and long service employees are affected. That's unilaterally changing a contract, I'd say.

So Ted you are quite happy to have inefficient public services which waste our money so that they do not make a profit !! And you are against profits so your pension fund investments will have no yield and be worthless.

I think everyone knows plenty of cases when our public services spend money on pointless activities driven primarily by political or personal whim. And I remember a BBC program in which a surgeon left the NHS because it was so inefficient he could not perform the number of ops he felt he should. He joined a private company which was contracted to the NHS and was able to perform twice the number of operations. The cost per operation to the taxpayer fell sharply.

Without private investment we would have no modern economy, no one would take risks and we would be a backwater. Or we could adopt the Communist model which is what you infer is the right course.

If there should be no private involvement on the NHS then will it produce its own drugs, equipment, buildings.....?

We are not in business to pay people for doing nothing useful. If a private company can do things better or cheaper then we ALL as taxpayers benefit. Public employees have no God given right to a job as none of us do. Unfortunately it is often not in their own interests to be more efficient, as there is no strong driver. You would have us still making lots of shoddy cars to sell at high prices as it would keep so many people in jobs. Even Russia realised this does not work.

And Ben - if teachers are earning pensions of 10k pa then they have not done their 40 years. But they would still need a pension pot well over £300,000 to buy such a pension. £10k pension is not tiny, and, of course, they get their state pension on top. The maths is the same irrespective of the actual pension level, and many people in private industry would kill for £10k pa pension.

And although all pension funds have been raided, the taxpayer simply has to top up public employee pension pots. But private pensions are just reduced.

And Dave - I have a grip as I understand the gross deficit and its causes. I am not blamimg individuals, but public employees have to understand that their pay package has become uneconomic and take a cut, In private industry overpaid employees are generally made redundant one way or another. Do you understand what is happening in Greece? Let us try to avoid such drastic measures.

Lots of contributions in response to this article.

Go to China or Russia or the other remaining communist countries to see how it works now-a-days. Not pretty.

The Bosses of private companies take the Michael at times by getting big pay offs for failure - exactly the same as those highly paid public servants.

As for union leaders...

I remember a union leader attending a working men’s club to present a long term medal to someone in his union - he was drunk, slovenly dressed, unlike the person who received the medal.

Union leaders today are all in the big bucks sector, same as council leaders, private FTSE leaders, government civil servant leaders etc.

Unfortunately, the public sector unions will not see sense until the 'donkeys' leading them have dragged them a lot further downhill.

Personally, I'd rather see a quick end to all this financial debate, by the government giving in to unions and the IMF having to be called in.

Gordon Brown, the very educated chancellor, thought it best to bail out the banks, even although he had the opportunity to prevent the crisis happening years previously.

He agreed with Allen Greenspan (who he gave a knighthood to, for 'services to financial stability'), who said that it was better to let the catastrophe to happen and clear up the mess afterwards, rather than prevent it.

Jon - "inefficient public services " are your words, not mine. What crazy idea makes you think effeciency is a prerogative of private industry? Believe it or not, there are still folk out there motivated to do an efficient job because they believe in public service and not motivated by private profit.

You may be right about cases of public services spending money on pointless activities etc., and for everyone there is probably a tale of private companies driven by inflated egos and making exaggerated profit - not to mention being inefficient.

I'm not arguing against private industry. I'm saying that private business is for profit and not for public services. Your example of the surgeon is about efficiency not private better than public at all.

I think you are being disingenuous about private involvement in the health service. I'm not saying that medical equipment shouldn't be provided by private companies nor drugs, though drugs companies have been known to overcharge the NHS for their products. However why should they provide the buildings (other than builders for building them)? Where is the benefit there? Taxpayers have an asset if government owned. They have nothing if a private company owns the building.

On what basis should a private company be able to do something better or cheaper? Please explain the mechanism? And what is this nonsense about a God-given right to a job that you speak of? Your reply is littered with comments that just betray your prejudices because it suits your philosophy, not because they are true.

A public service is a public service not an opportunity for private individuals to make a profit. Private bus companies, to return to my example of earlier, only wish to cherry-pick the profitable, not to provide a service. To do the latter they require subsidisation. Once Royal Mail falls into the private sector it will not deliver to your door, or alternatively deliver as frequently . It's labour intensive and unprofitable. RM's current woes aren't because of bad work practices per se but because dear Mrs. T. hived off the profitable bits to private enterprise. Repeat: private enterprise and public service are mutually exclusive precisely because the rationale for their separate existences are diametrically opposite. Private enterprise is only interested in the health service as with anything else because it spots the opportunity to make money. That's what it is for. Making money for its owners. There is no reason why the public sector cannot do that - and with people having the right motivation of service and not self-interest.

Ted york,

I would like to point out that virtually every piece of equipment from drugs to MRI scanners used by the NHS is produced by companies in the private sector. The NHS puts the available technologies to best use in the field but doesn't generally make anything. Drug companies (like oil companies) take incredible financial risks trying to produce the next generation of medications, and most lines of research lead to failure. They can only do this if there is sufficient income and incentive to carry on.

You can use similar arguments with search and rescue (ie they don't design and build helicopters or fire engines).

My point is that the public sector seems to forget that although they deliver valuable services they could not operate without the private sector to provide them with the tools to do the job.

As an aside an interesting example of public sector efficiency can be shown by looking up the recent fiasco about the Edinburgh tram system overspend.

Dennis, I said the equipment, drugs etc. is made by the private sector. I'm not arguing against the private sector per se but about its direct involvement in providing most public services. And I am in no doubt that there are public sector inefficiencies and incompetences, just as there are private sector ones. Again I say, what are the mechanics that ensure that the private sector is more "efficient" than the public, as a matter of course? My suspicion is it is mainly about reducing costs, of which staff are the biggest, thus satisying an accountant, without necessarily improving care or treatment. Are the staff paid less, or are fewer employed? And are either of these scenarios of any real benefit to the taxpayer or other workers, ultimately? More lower paid people, more unemployed? Putting more money into the hands of fewer people? There is a fashionably slavish devotion to free market economics these days but is it right for everything? Even the Victorians - the ultra capitalists - didn't believe that.

Other way round Dennis, surely? (nice post Ted) - What Dennis described is the private sector acting as a parasite on the public sector.

The idea that the public sector is 'too big' and 'doesn't respond to market forces' is very strange - if that were true, there would be class sizes of 56, nurses caring for wards of 100, etc. Maybe the reason there is a large public sector is because there are more children to teach, more patients to care for, more rubbish to collect? You think? This perspective is proof that what Jon is advocating is an attack on the public sector WORKERS not the public sector infrastructure, and it is also proof that it's class struggle from above. I'd be careful with that sort of thing: 'when the revolution comes' it might be remembered.

Without private investment all investment would be from the state (not wanting to ignore Jon) - that's a lot of investment. Public employees do not have to 'accept they are uneconomic' and 'take a cut' - at all. This discussion polarizes between those that essentially think that private wealth is a good thing and that their position in society should not be under threat, and those that don't see any reason why they should tolerate class struggle from above, because that's all it is. If I were on the private sector side, I'd have to face the fact that no amount of raping public sector funds and dishonouring (important word) public sector contracts will buy me dignity. And believe me, it IS better and FEELS better to have dignity than it does to have a large (private) sector pay packet.

Ben, I repeat, who makes the drugs and equiment that hospitals use?

There are two extremes to wealth creation, one way is that the state does it all and we have a planned economy like North Korea, the USSR or Cuba for example which has been demonstrated to stifle innovation and delivers general poverty and not enough food. The alternative is something like the USA where the state is less involved but innovation is very visible (look at the number of Nobel prizes) and there is enough to feed the population with surplus. However there is no safety net for people who have health or employment problems.

Ideally we should aim for something in between and in Europe I think there is a fair balance. However we need to keep both sectors on their toes and keep finding new ways to do things, in the private sector there is a continuing battle for survival against competitors which drives efficiency and innovation but the public sector has no such natural predator and as with all organisations (including private sector) the instinct is to grow and suck in resources unless held in check by the government.

As for the "dignity" that you mention, that sounds a bit holyer than though and don't forget that private sector profits largely go to pension funds which we all receive (even public sector ones like the Local Government Scheme). Comments like "Class struggle" are a bit dated these days don't you think?

Dennis, You labour under a delusion. People, not companies, produce the equipment that the NHS use. People in the NHS provide a maternity service and thus 'make' the people that then go on to produce the equipment that the NHS use. And so on and so on. So your point is wrong. Without the NHS providing their maternity (and general health) service the private sector could not operate. And if the private sector could not operate then the NHS also could not operate. The real point is that this delineation between private and public is a nonsense and is merely a means to set people in both sectors at each others throats while the bankers walk off with the family silver.

http://www.ft.com/cms/s/0/64c2eebe-9ec3-11e0-a4f1-00144feabdc0.html#axzz1QMtqx95T

you say that a doctor did twice as many opps then that only shows that the new private over paid managment that nhs are not doing there organisational skills properly. which is what the people at the bottom say any way. it is usally the top people who dont have any idea but got to the top by being good talkers and email senders. just look at how many people in companys spend writing emails trying to slag some one else off but dont want to use the words in case it comes back and bites them if the hhs was run like a production line without privat money then the pensions would notbe a problem.it the overpaid creaming the pensions not the average wage earners,the well paid have the ability to save out of there disposable extra income.stop knocking the low paid for the mps .doctors.top police /and top other people the are taking big golden pay offs with massive pension pots but trying asking a top person who is part off the gravy train to stop it .pigs might fly

Ted - like Union Leaders you keep blamimng the financial crisis for the mess we are in despite the fact that all parties recognize that there is a pension crisis and it should have been tackled many many years ago. The problem has been that governments have always looked at the cash flow, and not the future cost of liabilities.

A recent channel 4 program calculated that the total liability of the UK is £13 TRILLION or a pile of £50 notes, each 0.11mm thick, over 600 miles high. Just work out the debt per head of our population to flabbergaste yourself. The cost of bailing out the banks was less than 1% of this, and we might get some or all of the money back.

The cost of bank bail outs happened several years ago. But we are now running a GROWING deficit which will continue to grow uncontrollably unless we make some tough changes.

The financial crisis might have been a trigger to start action on the overall problem, in which case this was a blessing. But please, please, understand the dire economic situation we are entering has NO significant element caused by the financial crisis. OK there may be further effects from the Eurozone, but these will still be peanuts compared with the underlying problem. It is not what you want to believe but the facts that matter. This can be hard for human animals as we are driven 80% by emotions and only 20% by "common sense", but realising this does help to overcome our emotional side.

You talk about my response being littered with prejudices and question the truth, My mission is simply to make people aware of the FACTS of the situation so that something is done to help future generations. It is exactly people like you I am aimimg at because I do not think you understand or want to understand.

And you are in denial that private companies can do anything cheaper or better than public services. You talk about private bus companies, forgetting that the previous bus companies were very heavily subsidised and that is why they were sold. You have not read my bit about the surgeon. You are assuming that the NHS does everything as efficiently as possible with no room for improvement. My local NHS Trust had a Marketing Director and a secretary. Since becoming a Trust some 60 plus people work in the renamed "Corporate Affairs" with much higher salaries even ignoring their growing pension entitlements. I could give you countless examples of bloat, soaring pay and jobs for the mates.

All parties agree that the NHS needs reform. Many of the practices are ineffcient and out of date. Most of the employees are sincere and dedicated, but have no power or training to bring about the changes necessary. The NHS is the largest employer outside of China and to control it is beyond the understanding of any individual. It is also a very emotional subject, so any change is always met by protest and misinformation. So do not tell me that an external contractor starting with a clean sheet can do nothing to reduce costs and improve care in some areas.

Ben - you talk about dignity versus large private sector pay packets. What we are facing here is large public sector pay packets (compared with millions of Jo average in the private sector) and the same people going on strike.

You and I make the same decisions every day in our discretionary spend, borrowing and future commitments, but have no indiviual control over the spending of our taxes and public borrowing and future commitments. Let me give you an example:

You have some spare cash and decide to employ a window cleaner, thus helping to create a job. Over the years the window cleaner puts his price up. Some years later after talking to a neighbour you realise that you are paying 50% over the odds for no better a job. What do you do? You may switch window cleaners. You may have a word with your window cleaner and ask him to reduce his price. The incident may cause you to review the affordability of window cleaning, so as you are having to tighten your belt you may decide to do without, this helping to lose a job.

This scenario applies to almost all of your spending such as finding a cheaper supermarket although the pay adjustment and job postions may be remote from you.

Those who are resistant to bringing our deficit under control just do not see the long term effects on the whole Country if we do nothing. In this scenario public employees will suffer like they have'nt seen anything yet. Many countries have let deficits get out of control in the past, seen hyper-inflations and public employees not being paid at all. What will happen to our beloved NHS if that were the case?

Jon - I think you are well intentioned but seem to fail to understand that it's capitalism that is at the very heart of the financial chaos of today, not the public sector. It doesn't work. In an age of smaller populations and innumerable resources to exploit it appears to work, but in an age of diminishing resources it cannot without frequent correction. It can only survive by constant expansion either in population or by creating demand, and credit and debt are essential to its function. No problem when these are kept under control but they have not been because human weakness and greed always prevail.

I'm not assuming the NHS does everything efficiently. Quite the contrary. I am saying that there is no logical reason why public service cannot produce effeciencies as much as private industry can. It is down to personal motivation rather than ability.

My fear is that your mind runs on orthodoxies and not common sense. You persist with an outdated model that cannot take mankind forward any longer. I think it is you that does not understand nor wish to. Your example of your local NHS trust illustrates this perfectly. It is now bloated at the top precisely because it has been spun to try to mimic private enterprise. Also, there are thousands of middle managers in private and public industries that perform no genuinely useful role. It's a fallacy to assume that problem only exists in the public sector. Promotion is often used as an incentive, not to fulfil a need.

The NHS has been remodelled from the top downwards not bottom upwards. The NHS does need reform. That has absolutely nothing to do with opening the door to the private sector. It is absurd to say that those working within the NHS have no training to bring about change. This implies that private companies have a unique insight. If that is the case pay them to train the NHS, but let's not have another gravy train draining public resources into private pockets. Your comments about the private bus companies are revealing also. Public transport ran as a service. It wasn't designed to make a profit but should have attempted not to make a loss. It was there to benefit the community. In private hands it is there purely to make a profit and so fares are raised, routes and frequencies reduced. The profit goes into private hands. So, worse service, higher cost. In wedding yourself to the private sector mantra you seem to have forgotten that the idea of a transport service is to provide a service to the public. It is an enabler that helps people get to work etc. which in turn helps all business. Private bus companies have no such aim whatsoever - and they still want a subsidy - not to run the service but protect their profit. i.e. If it makes money private business wants it, if it doesn't the public purse can pay for it.

Private business is essentially not about satisying needs but creating them to generate profits for the respective owner. It really is that simple. Many of us don't see that the world should be structured like that .

Incidentally, is the £13 trillion you mention that sum before or after "quantative easing"? Just print some money, I say. Seems to be the capitalist solution to the problem when it suits. And why? Because money in itself does not equate to real wealth, so it can be manufactured, and everyone can get poorer.

The Question to ask is "If the Public Sector were a series of public Companies would they be solvent ?" I think even a child of 7 could answer that one!

Whilst I accept that we need the State to organise certain limited matters we are kidding ourselves if we think that we need a State enterprise of the current size. I fully accept that many workers in the state sector work to the best of their ability but it is an undisputed fact that productivity in virtually all the state sector is well below that of the productive arm of the economy.

Managers in the public sector are more recently having to face up to the more "realistic" issues brought about by the current slimming down of their often bloated sector but there is a huge way to go yet.

One of the main difficulties does lie in the unfunded nature of many of the the state pension schemes and the weakness of managers to say NO or bring about change.

The unions are not all to blame but in this country still seem to have the dinosaur attitude of "them and us" rather than a more constructive model of identifying the desired aim and trying jointly to achieve it with Management.

Ted York, the market is not theoretical it is real, it is the place where cash is lent or shares bought in enterprises to enable them to flourish and profit individually, the totality of which is a countries wealth; any individual enterprise that does not profit by its endeavour goes to the wall. Essentially that means that if it has failed then the effort was a waste of time and money.

Your notion of profit is crude and simplistic and overwrought with sentiment; there are far better sources of instruction than I possess of that field, but essentially it is the difference between the cash that is put into an enterprise and the cash that comes out of it; it is fatuous to suggest that all that goes into the owners' pockets, the inland revenue would have something to say about that, and R & D, amortisation etc, comes out of it.

As far which layers of employment will targeted, then clearly - apart from the current pensions issue where the lower levels escape I believe - all levels must be affected, it's worth noting that management structures grow like a pyramid in layers as more headcount is added at the base, those at the top claim more pay because of their alleged increased resonsibility and are in the position to give themseves a rise - local councils for example.

In all of this, it is pure commonsense to find more efficient ways of doing things, yes that does mean some headcount becomes surplus to requirement in any particular enterprise but the headcount saved in one enterprise, is available for another to set up or expand its profitable endeavour.

I will agree that such movement of labour is not without some pain and anxiety - I know from personal experience as an engineer who was once made redundant for 5 months through a well known company having lost its way - but no one is suggesting this is an overnight remedy.

In that regard, the NHS for instance is no different from any other endeavour; their objective is to cure people of their afflictions for the price of their labour which is to enable them to regard their own wellbeing, it's not of some higher order morality that is beyond price; whatever you may think.

Oh, and touching on another of your point business will only flourish where there is DEMAND for its products and services; thus business endeavour, is to satisfy demand, whereby they profit.

Ted Ray judging from some of your posts I get the impression that you are something of a Marxist, you seem to imply that what is effectively capitalism is essentially wicked. You say to Jon 'private business is essentially not about satisfying needs but creating them to generate profit for the owners' and go on to suggest many don't agree with that.

All of that is neither here nor there, the capitalist system prevails in the world today, so forget the moral arguments; in any case the alternative has been tried and failed.

Do you otherwise truly believe that all the wants of an extremely aquisitive species, homo sapiens really cares who initiated the products of human endeavour - they want, so there! Your apparent solution is to service these wants by labour dictated by the state, that is forced labour, since the pay to take tax off from must be available to pay for the wants. As I said it's been tried with miserable consequence for the thus subjugated.

There are a mixture of opinions here as one would expect. I do feel that the bitterness towards public sector workers is unfounded having worked in both myself, including many years in jobbing shop engineering a very hard nosed world. There are more than one level of people here that we are discussing, upper management who to the most part have caused enormous waste and enjoy staggering salaries and pensions. Then there are the low paid who are usually left carrying the can back for all the governments promises with no money and ever decreasing salaries and resources to do it with. While the managers give themselves all kinds of treats.

No one has had a pay raise for many years and many of the departments are now in the hands of limited companies who are stripping them of everything.

It seems to give people great pleasure to hammer these people the same as managers and yet if they have a pension at all it will be small and will not allow them to retire early if they wanted to.

Unions? well it is their duty to try to prevent people from loosing their terms and conditions. It is common in public jobs to have your contract ripped up under your nose and told here's your new on as has happen to me and just about everyone I know more than once. We all apply for what ever job we have and agree to a set of terms and conditions if we are successful. This is no less so for public or private sectors. If you thought that a public service job was a cushy number but through a sense of duty to the tax payer decided to apply for another one because it has no pension etc and poor conditions you might need some counselling. There have been in the past many opportunities in the public sector that many of the bitter people could have applied for.

If your bosses decided to half your pay you would be up in arms and rightly so and effectively that is what has happening to a group of people who expect the terms and conditions to which they agreed to be honoured. If you really think that things like care for the elderly and many other care services are better of in the hands of the private sector you really should look at what is happening to them. As soon as the huge profits they have been making or expected to make fail to materialise the cared for will revert right back to the government.

"The Elder One" - It is interesting that I am being labelled this or that and having viewpoints attributed to me that I haven't expressed.

Firstly, "the free market" is impure. It only functions as intended if all aspects of capital and resource are fully mobile, and there are no external interferences.

My notion of profit isn't crude or simplistic. I'm referring to net profit essentially. But if you are talking about taxes etc, then equally you must consider the financial implications of reducing labour and the effect that also has on state income and expenditure.To assume that those who lose their jobs are free to be employed elsewhere only works if they have the skills, can acquire the skills, and jobs are available. If they are able to start their own business they have to outperform others or find a gap in the market. If the former they will effectively oust someone else from their job, and so on.

And why, oh why does everyone keep talking as if effeciency is a secret known only to private enterprise?

To repeat, businesses may satisfy demand, but they also operate by creating demand. Demand isn't just a beast that has to be fed. People can be made to want things. It is one of the purposes of advertising. You turn reality back to front. A businesses raison d'etre is to make a profit. It satisfies demand and creates demand to do that. It doesn't provide services for nothing, as does a charity, to meet that demand, because that isn't its purpose.

Your example of those leading local councils rewarding themselves is revealing. You could have equally used those running private companies as an example but you chose to make your point referring to councils.

I have not said capitalism is wicked, nor implied it. I've said it will not take mankind forward, in an era of growing populations and ever diminishing resources. It requires room for expansion, and needs constant redistribution of wealth to succeed, so conflict or contagion are the only ways it can continue. Indeed, I find it is your view that is the more ideological insofar as you seem to feel humankind is subservient to a system where the majority do not benefit. Do you think people at the bottom of the capitalist pyramid are not effectively subjugated as things stand? If you don't feel they are you have a narrow interpretation of the world.

Nowhere have I said that there shouldn't be any private businesses. What I do maintain is that they have no direct part to play in provision of services where there isn't a true market place (meaning the faulty one I described above) such as in water supply, railways, etc.

From what you say , it seems that you think that health should be a market place. Well, if that is the case why not privatise the whole NHS . Let us see how superior that would be? Better still, just look at the gap in health care provision in the USA. Once the private sector gets a foot in the door they will want the whole house. They represent that acquisitive trait of homo sapien you refer to better than anyone!

If the majority of people agree with you about the NHS being just another market place why are they resisting the government. Sentiment or a knowledge of of how bad things used to be for those that could not afford a doctor? If you are genuinely "an elder one" you obviously didn't observe your parents generation that relied on heavily on "benevolence" and squirarchy to exist.

Oh! And Ted Ray died years ago.

This is fundamentally about organisations not people. Organisations create cultures some of which are more successful than others. I have worked with both sectors (including NHS) and found that the major difference was the way that the public sector is hidebound by procedures and doing things in certain ways because they have always done it like that. One example is how management consultants are brought in to endorse decisions and to cover everyone's backsides, then there is the endless procession of meetings which eat up peoples' time. Moving to the private sector can be a shock to many in that the culture becomes more of a "just do it" and take the responsibility and don't ask for another report or enquiry. I know that people from the military have a particular problem when first moving into the private sector and suddenly given general objectives (go and find some new customers anywhere you like) rather than specific orders like "take that hill".

Finally don't be drawn into the bankers myth, I am not a banker but I I know enough about finance to know that paying a few billion in bonuses (which I do not condone) is not such a big deal given the size of the deficit. Just look at Greece and what years of overspending have done for them and the future of the Euro.

I know 2 civil servants going on strike. One has not got a clue what the issues are and is just going on strike because of what the unions have told him, the second does have a clue, but has decided to go and play golf on the strike day. This is the same chap that admits that he would not get anywhere near his pay in the private sector, and can take days off, not on holiday, each year to play inter civil service sports matches, at the tax payers expense. Seriously, they live in a world of their own, are un sackable unless they do something really stupid, and can get paid years on the sick if they manipulate the system well enough.

Far too many jobs have been created for jobs sake by previous governments, far too generous benefits, people are living longer, things need to change.

Ted York, sorry about the 'Ray' I didn't intend his resurrection, that was an aberration, it comes on increasingly with age, I'm now over 80. I wonder why you responded to that title though, if Ray it is not it, perhaps York isn't either, but Ted is perhaps.

You seem to have become rather excited and most of your comments have no merit insofar as they express nothing but negatives to any suggestions of change in the status quo by others, despite evidence for the need.

You and I, at least, will never agree and I see no profit in pursuing the debate between us at least further; I'll leave that to others, if they feel inclined.

On a final note, quite what you meant to convey in your final para before the apparent ps escapes me, but yes, I do recall my childhood and growing up, and what went on around me; times have changed and matters improved since then, but that does not mean that all is well today and that we have reached a zenith of perfection in society. Life goes on demanding change and adjustment; something of this debate is about how we need to go about it.

Of my parents' generation I can still remember them vividly, they expressed much the same sentiments as of today and in my family at least we were no less happy than the consensus of today, despite the fact in my early years we lived in rented property with no central heating, electricity, mains delivered water (we had a well with pump to draw water), oh! and an outside lavatory, also no telephone or bus service where we lived; and of course the war came in '39, but we survived in reasonable spirits. I know many didn't; unfortunately, that's the dictate of providence; which is ever present. Incidently both of my parents died in their late 80s with no special provisions to safeguard health and safety, though if one became sick one's doctor (whom one could choose and know) would come out several miles to attend to one, and not infrequently I recall. Services then may not have been perfect but they worked, in my experience; others, daresay were not so lucky; but luck is not pure happenstance, it can be engendered by one's approached to life and relationships within the herd.

Perhaps you feel unlucky and dissatisfied with yourself; or perhaps you think that you're thinking of others only and not yourself, I'm not convinced. I suggest that you sit down and think about it; and think positive!

Goodbye and good luck.

Well done Lorna for such a divisive article - mission accomplished!

Come judgement day can I opt Ted for your more balanced community?

I suspect the Unions do indeed "get it" - that is why they are defending their members contracts of employment in the shadow of a complete lack of leadership by example from our elected MPs and government - if we are to believe that we are "all in this financial mess together" (that`s a joke).

I wonder if a similar pension cutting exercise was proposed for company directors and senior management, despite the wording of their contracts of employment, how far it would get before solicitors were instructed?

"An Elder One" - Psychoanalysis by blog! Incredible!

I agree we will never be likely to agree and had also reached the conclusion that the debate was going nowhere.

I responded to "Ted Ray" because you were quoting me and so I figured that it was really me you were addressing.

Not excited at all. Sad really that lessons haven't been learnt.

My final comments were raised because I could not understand that if you were elderly how you couldn't realise how the establishment operated (operates?) and the dire poverty that existed that was often only alleviated by benevolence. Things have improved but only as the grip of the ruling classes on power and money was gradually loosened by those returning from wars. You neglect to mention that doctors had to be paid and that whilst many folk hadn't even the means to feed their families. That is what the Welfare State was born to address. Private business would never have addressed that. It will be a very slippery slope if private enterprise was allowed enough rope to hang us with again. Those bad times are not as far away as some people may think.

I'm not against change. Indeed I would go much further than you in change. But I think the changes need to begin at the top and not at the bottom of society. There is a balance to be struck, though. It is precisely the status quo I would change, but not the element that you refer to necessarily.

And as for the public sector pensions, the "game" should not be changed part way through, and it should be recognised that already changes have been made, with negotiation. Pre-empting negotiation like Alexander did is less than helpful, and comments from some of those in the private sector would be more befitting if they got their own house in order first.

As I said in my second post, my entry into this debate was to redress the lack of balance in the blog, which parrotted the tired tune of public sector bashing. Like many, I have worked in both sectors. Both have weaknesses but both can learn lessons. Attacking public sector pensions isn't one of them. More energy should be (and should have been) expended improving private ones, for example.

Finally if it is any comfort to you I have been very lucky, and my only dissatisfaction is that the status quo is maintained for the ultimate benefit of a relative few. I don't need to think about it. I already have done so. Methinks it is you that is probably part of that status quo and are blind to its faults, and needs to give the whole issue more thought. All the best, to you to though in spite of our differences of viewpoint.

My, my Ted, if I may address you thus, you are excited, this is getting increasingly tiresome; please don't try to teach me basic history of the evolution in social affairs in my time, or as some say, teach grandma to suck eggs. Yes I can see that you care for others, but you don't further your argument by use of a scatter gun at all perceived ills; as in mathematics, the variables are separable and have to identified before they can be part of the equation which we seek and are concerned with here. Each parameter must be addressed individually with regard to its' feasibility, as demanded in this case by public consensus.Take one thing at a time and don't try to treat it all at once with that blunderbus of yours.

No I am not blind to the alleged faults but have considered the equation, I and those like me have a different viewpoint on how to address them, that is all; don't be so arrogant it does not become you. Yes, there is a lot wrong with the business of our existence, which one hopes will be redressed in time, but probably beyond my lifetime if current progress is any indication; the current financial imbalances developed over some thirteen years and will not be corrected overnight, but we have to start somewhere to reduce public service overhead cost which has become unaffordable.

There have been a number of these debates around this and closely related subjects and one thing that stands out is the way people try to take some sort of moral high ground by slagging off someone else who is essentially just defending what is his.

There are so many who are oblivious to the real world. They say they know or knew someone that this and that happened to and so on. For myself and my colleagues there is no such luxury. We see every working day how the cuts and changes hit the elderly, the poor and the underprivileged, and remember they have not really started yet. Until we move out of our limited sub-cultures and see how much suffering is going on under our very noses and that people who worked hard all their lives in the belief that they would have a pension when they were worn out and had no idea what investment was or is. There was nothing wrong with this a short time ago.

Someone comes along and says well yes but you just can't have it now. I am not sure that there is anywhere else that a body can just take away something that has been a part of someones terms and conditions and agreed to by both parties.

I don't have a government pension but, to just take something away from someone like this is out of order. All the money paid to pensioners goes back into the system and it's pensioners that sustain some large areas of counties like Norfolk.

There are many large companies that trade here on our high streets and have offices in Switzerland. The amount of tax that they avoid by having the office is close to 130 billion pounds per year. an article on this site said our leaders are among the top tax avoiders in the country. Heaven forbid that we should take something from them in a similar way. Once again the most vulnerable people in society become the target for the hammer.

Who stuck a stick in this pensions nest and stirred up the pensioners? Great!

The free market is not allowed to be free anywhere in the world - if it was, the pension & bankers crisis’s would not have happened.

The government bodies the world over stick to their rigid ways unless forced to change (including communist, dictator or democracy) - otherwise Gordon Brown, who knew what was happening in the banks, long before 2007, would have taken action to protect us. Is that not what government’s first job is?

As far as the government employees are concerned, go on strike or whatever it takes to satisfy your cause. You have to temper your anger somehow. The fact that the changes have to be made to your pensions was cause by previous UK, USA & EU governments is irrelevant to you, since they are too far away for you to do anything about them.

Ideally we should all be protesting about higher things, like the EU. This body is unelected so unaccountable to anyone, which is why they can vote for bigger wages, pensions and more of our money to spend. There financial accounts have NEVER been signed off EVER by any accountants, as they are so dodgy.

They allowed Greece to join the EU, even although it was known that their financial accounts were dodgy.

But the EU are just another (unelected) government that wants to remain in power so does all sort of dodgy things with other people’s money – like creating the next banking crisis?

Just like the USA government (Bill Clinton) caused their financial crisis by changing the rules to allow people who could not afford them, to obtain mortgages.

Just like the debt from the second world war was only paid off recently, the spending binge the UK (and the west generally) have had for decades, will not be paid off for a couple of decades, so cut backs in our living standards will be made, no matter how many strikes we have.

We are all naturally greedy, just like our governments and want to have as big a slice of any future cake as possible.

As far as I can see, nothing has been said about private employees having 'perks'-cars, private health membership, gym membership, luncheon vouchers. ( I know they are taxed but only for the past 10 years). Also they can take part in share schemes and many have done very well out of it. My daughter worked, when a student, for Asda and when she left she was given the option of selling the shares which she did so. She was given almost £1000 and that for just working at weekends. Public sector workers don't have share schemes or other perks. Having said all that, surely as someone said, it's sour grapes that the private sector wants public sector to take a pension reduction. Most public sector employees have already negotiated pension conditions, most to work till they are 65 and pay more contributions. What this latest increase is not for pensins but to go into taxes to pay for irresponsible bankers and politicians.

What we should all be fighting for are better pensions for everyone and asking the bankers, MPs and euro MPs to take the pain first and then just maybe there wouldn't be so much resentment..

@Peter Wilkinson

"I wonder if a similar pension cutting exercise was proposed for company directors and senior management, despite the wording of their contracts of employment, how far it would get before solicitors were instructed?"

I think we already know. When Fred Goodwins pension was questioned we were told nothing could be done about it because it was in his contract.

This threaded debate has got quite out of hand and well beyond its original purpose, which I understand was to draw attention to the matter currently exercising the unions regarding public sector pensions.

No one in their right mind is suggesting that the civil service should be disbanded and a society of individuals left entirely to regard government legislation as irrelevant, that is, for us to become lawless;

that government is threatening to take away civil service pensions - though there are other ways it could be administered, it is a matter of moderating civil service recompense to be more economical but reasonably in line with that of the private sector in the interests of fairness;

that the NHS should be privatised entirely - surely we can all agree that there will always be a needful essential service free at the point of entry financed with taxes, which is not to say that some of the service cannot be supplied by the private sector.

On the subject of morality, public servants are not a separate breed of human being, we are all of the same genus, possessing the same range of instinct and ego; in the matter of greed at the top level there is no difference between the natures of mandarin and captain of industry, nor at the lower levels, of the rest of us.

We can squabble over relative notions of fairness, issues of contract and so on, but if we don't begin to tackle imbalances in the economy by sensible negotiation, of which this issue is only one, then we shall all soon find ourselves on the proverbial handcart.

Each of the issues that have been raised in this thread will have to be remedied according to individual merit; no doubt some of those who feel they have the most to lose in each case will object, saying it cannot apply to them or that there are other issues that need attention first; however, some issues like this one are straightforward and can be resolved by the meeting of two parties, other issues are more complex and take longer. To all of this the march of time pays no regard and is inexorable.

This has been fascinating. The man from Mars would conclude that the readership of Citywire is divided into two groups (or sectors) – each called p….. . Each believes the other is blinkered and self-interested while it itself is far-sighted and reasonable. (It also appears that if someone moves from the other sector to your own they immediately swap their horns for a halo (and vice versa)).

To return to the original question that Lorna Burke raised – do the unions get it? Of course they do, but this is a negotiation and the unions are setting out their position. Unfortunately the unions – who have great negotiating experience – are negotiating with a novice team in government who have raised the stakes while substantive discussions are still in progress and well before deadlock has occurred.

So it is going to be difficult to achieve what the unions and their members want – an orderly transition to a new system with the rough edges knocked off and as much as possible of the present scheme retained – without unnecessary strikes and at less cost to the taxpayer.

I suspect the core issue is increased contributions – extending the retirement age and switching from a final salary scheme are unavoidable.

Once that is settled we should move on to the bigger question in Lorna Burke’s article – the low take-up of pension schemes in the private sector which is piling up problems for future generations. It would be interesting to hear from the advocates of the private sector how they would conduct the negotiation to a sensible conclusion and also how the market will remedy the deficiency in private sector pension take-up.

Woodberry, no quarrel with your overview, however your last para suggests you're from the public side, in that it implies the private side should catch up the public with private pension contributions; calling it a bigger question is also tendentious, it's another issue true, but separate and rather more complicated because of its' fractious nature.

On the bottom line everyone subscribing to NI arguably has some amount of pension (subsistence levels no doubt), question is why should the public sector derive a better one also from the same source, the tax payer. ALL of our public expenditure is piling up problems for future generations, but I would agree that Finance and the banks and their bail outs have been hugely complicit in this.

Ted – I understand that your philosophy is miles away from UK society, but unfortunately your comments do nothing to address the immediate gigantic deficit problem, Any one can describe their utopia but it is irresponsible to use this to try to deflect people from essential action now. There are very many things I think are wrong with society to-day – and you and me might have many such points we agree on. But now we need pragmatism, not idealism and academic lectures.

I suggest you try to get a copy of the BBC2 programmes in which Geoffrey Robinson went into a hospital to see if things could be improved, With a very short time he identified several areas, One was that if operating theatre timings were rescheduled, then the hospital could perform twice the number of routine operations. As other contributors have noted, the NHS does a lot the way it has always been done. In a private company such a simple inefficiency would never have arisen.

He found that whilst a few staff accepted his recommendations for changes, most staff at all levels were reluctant to change. Although an easy going man his frustration was apparent as he tried to conduct meeting after meeting to get decisions made. It was not just the senior executives who lacked the will. It appeared that the preferred option was to avoid any hassle and keep things as they were – (after all they were all secure in their jobs and the hospital would not go bust if they did nothing). This is exactly why private companies can help. They get things done in order to make the dirty profit and survive.

Another madness was the fact that when PCTs ran out of money then they stopped patients from having routine operations even though the hospital was still paying for the (idle) resources. This is unbelievable and illustrates the ridiculous financial structure within the NHS. There were many more examples and none trivial.

I believe that one significant problem with public services is that employees are not aware of their total employment costs per hour (salary, pension, NI, oncosts and support costs) and so they have no benchmark to judge the cost effectiveness of their efforts. Like many salespeople those who do publicise the benefit they are providing will often report the apparent revenue or benefit without taking into account the true cost of delivery.

Peter Wilkinson – by far the majority of company directors and executives are in DC pension schemes/ They have seen a cut in their expected pensions of at least 50% over the last 16 years. You hear only about the greedy ones as the rest are not newsworthy. Lots of small engineering companies compete hard on price to supply parts for the manufacturing industry which generate our lifeblood (exports). They do not make enough profit to pay silly salaries, and most of the profit goes into capital investment so that they can stay in business and retain jobs. And the same is true of many service industries which provide your needs. A few do find a niche and make big profits before the competition moves in, but unless they keep innovating and improving (unlike the NHS) they lose the lot along with their houses which act as guarantees to their banks.

David Harvey – you make me laugh, Losing half their pay !!!! The proposed adjustments are nothing of the sort and are peanuts compared with the loss of future income suffered in the private DC pension sector. What you should have said is that, “after many years of seeing their pension benefits rocket owing to longer life expectancy, they are now going to pay just a little more towards the costs rather than leave the taxpayer to pay all of the extra, many of whom have seen their pensions drop to 40% of what the pension companies forecast and who now suffer an annual tax raid of billions to subsidise public expenditure”.

And ANY employment contract can be terminated, Although Ted York does not like it, I repeat “no one has a God Given right to a job”. I have been made redundant three times after playing a major part in saving modest subsidiaries from going bust and saving jobs, only for the holding company to be made a good offer. Of course the purchasing company already had its financial team, so I had to go. Unfortunately as they were all subsidiaries I had no equity stake 

But when we come to the bottom line, the current deficit is huge and it is growing out of control.

Firstly let us put to bed the banker syndrome. By all means let us try to get some cash back from the greedy bankers – although I expect that the legal costs would be more than any proceeds. But whilst the bankers took huge sums, this was only the tip of the iceberg of the losses. 98% or so went to people who could not repay their borrowings. No good chasing them for our cash. But they spent it on houses, goods, services, holidays, and so on, So the real beneficiaries who took the money are millions of ordinary people who all earned a bit more than they would otherwise have done. Perhaps there is a group we can identify and ask for our cash back – all those who sold property at inflated prices during the boom. They are most probably by far the biggest receivers of the loot. And of course many more borrowers would default with higher interest rates, so rather than let this happen we steal from savers with artificially low interest rates to pay to the borrowers to help then survive their imprudence. (and lots of other more cautious mortgagees benefit also).

So as one can see, to unravel the financial crisis to make those who gained pay for it is a pipedream. Quite apart from the fact that it is a tiny fraction of our deficit and we should get something back, let us shut up those union leasers and politicians who keep saying “make the bankers pay” and encourage the public to think that this would solve everything even if possible.

Let us all stop finding some ideological reason or relatively minor inequality as a reason to deny the problem or the need for action. This is no better than playground politics – Miss – I won’t do this because Jonny there hasn’t done that” Let us all accept the size of the deficit and of future liabilities. And let us all realise that present cuts and reform are wholly insufficient to address the long term problem.

I was brought up as a baby boomer like many others of that age by parents who had been through the austerity of the war, I was taught never to borrow money apart from a mortgage. I was taught never to buy anything I could not afford or did not need. Unfortunately my generation not only saw a good rise in our standard of living, but also we spoilt our children. So now most of the living have never experienced anything like real hardship. And we tend to think that there is some sort of equilibrium so that we can keep going on getting more materialistic and more wealthy, just like some people think that there is a balance of Nature. No one wants to think about or believe what is coming if no action is taken. Someone will put it right for us. If we are told that the rich or greedy bankers will pay for it and that will be that, we want to believe it as it suits us emotionally and we can creep back into our cosy shells. If this is challenged we think of a myriad of reasons – many using false or weak logic – of why we should do nothing. We are emotional human animals and find it very difficult to overcome.

Even those of us who think we understand the situation are in for a shock if nothing is done.

"An Elder One" - You persist in describing me as "excited". What has given rise to that notion I am unsure. Neither was I trying teach you anything, but if you knew what I talking of you'd patently forgotten it or decided to ignore it, presumably because it didn't fit your neatly with your argument. Now you call me arrogant. You are welcome to your opinion, as am I. You are being quite personally offensive though, from lofty amateur psychoanaylsis, labelling of others, to a pompous, patronising demeanour. I would have thought you'd have displayed more manners at your age.

My scattergun, approach, as you call it, is based on trying lay out my arguments and thinking within the confines of this forum. It has to be that way because its as if we are almost talking different languages, so explanation is necessary. Yours is a common viewpoint that gets (too) much airing so it is very familiar. And the idea that the current imbalance is just 13 years old is open to question too. And I'm not sure reducing public sector overheads strictly equates with altering pension agreements.

It is not merely in the area of pensions that public sector employees are being favoured over their private sector counterparts. I hear through a friend in the civil service that redundancy payments of up to 6 years salary are being paid to members of her department – some of whom are rapidly being posted into other senior positions in other branches of government. What is almost laughable, if it were not for the seriousness of the government's deficit, is that some of the recipients of these large payments have less than six years to go to retirement. Others were underperforming members of the Department who have been paid off with large sums of public money rather than departmental managers having to face the hassle of implementing disciplinary processes and dismissing them for underperformance. How the other half live!

"Jon" - That is a bold assertion that my philosophy is far away from that of UK society. I don't believe it is for so very many, but we can never know. Maybe it is more true about English society. I'm not describing my utopia but my belief as to the direction we should be heading in. Nor am I giving academic lectures or being idealistic. Without extending the debate, we had many more businesses run by the state in the fairly recent past. It is not a fanciful notion. The past 30 years though has seen some very poor governments that have created the mess we are in today. The fact that we have a coaltion shows just how politically divided society is. The reality is that as a society we are always bailing out water rather than plugging the leak. I think we are on the wrong path, and I think getting on the right one is far more critical, to my way of thinking.

The whole public sector strikes and pension debate is very complex as it involves different unions and different schemes at different stages. Negotiations are ongoing. The government is naive. Pension forecasts are extrapolations and depending on the data used I different interpretations can be arrived at. If you strike a bargain that you subsequently find to be disadvantageous to yourself I do not think that gives a right to renegotiate it unilaterally, do you? Existing terms should be honoured. People have planned on the basis of them. Indeed, they may have made a (lifetime) career choice on that basis.

Rather than the slagging that people are giving union leaders they need to remember that they are charged to try to protect the Tand Cs of their members. Personally, I don't think they want a confrontation but the RPI to CPI change has shown just what an untrustworthy and deceitful bunch this government is.

I appreciate your concerns re the NHS but I don't think they are peculiar to that organisation. I'm sure you will find sinilar behaviour in some very large private industries too. Have you considered that a distrust exists between the public sector and the private which may have engendered the reaction Geoffrey Robinson met, anyway? No-one likes outsiders with no experience in their field making criticisms and recommendations. That doesn't justify the reaction, but it is a TV show and they are trying to create entertainment. I've seen similar resistance on "reality" shows dealing with private businesses.

I'm unconvinced too that some of the situations you describe aren't a result of actually trying to run hospitals just as any other business. I suggest accountants may be behind some of the things we think are crazy.

Finally though, let me say, that it doesn't alter my view that private business has no part to play in running hospitals. Use them as a consultancy if you will, but I don't think their philosophy is suitable for public service. Constant change and re-organisation too is counter-productive, as it only spreads demoralisation and confusion.

Woodberry, let me correct that silly comment of mine - I was half asleep - clearly the state provided pension drawn down is commensurate with contribution. Perhaps the fairest and more certain way of dealing with the problem is that everyone should pay into state pension according to their means; I think that has already been suggested.

They just don't get it.

They don't realise or know where the money comes from.

In the long run cutting PSP will benefit everyone as will all the cost cutting hopefully being acheived.

At the centre of all this is cutting the cost of maintaining this country.

PSP and all Public Sector costs are a burden on everyone, some necessary some wasteful but imagine the blissful scenario that Public Sector costs were half of what they are today ?

All taxes would be much lower and and prices for everything we buy would be much lower. These minor pension sacrifices will be more than offset by the potential savings in all of our costs of living.

The pressures of modern day living is mostly caused by our massive tax burdened society and the public sector needs to realise they and the private sector are all tax payers and everyone will benefit from their fairness and efficiencies.

"do any public sector workers read Citywire?" (Powerful Pierre)

Very few I suspect. After all, CityWire is aimed at people with money to invest, and most public sector workers I know are struggling to feed their families.

And here we are trying to find ways to extract even more cash from them so we in the private sector can keep our company BMWs and our trips to Disneyworld.

I'm just glad that I wasn't drawn to a vocation like nursing or teaching or policeman that forces you into the public sector (as the private sector can't affordably provide these functions, which tells you all you need to know about whether Public Sector workers are over- or under-remunerated).

Ted - you continue to fail to suggest any pragmatic alternative.

You forget that all accrued pension rights are being preserved - unlike Greece. The changes will affect only future pension provisions.

Youi suggesta that everyone should have what they expect, but the world changes. As I have siad before, the pension I was offered at age 60 was 40% less than the MINIMUM projection I had 15 years before.

At the time many public employees signed up, if they thought about it, they would have exoected only some 12 years in retirement from age 60. That is now more like 25. So they will be getting twice the benefit they thought.

Any company can change the contract of employment if it finds that it is unafforfable. Redundancy is usually the option unless the company goes bust.

Life has many surprises for us. In the private sector. like me. many people lose their jobs through no fault of their own. Why should public service jobs be different. Instead people are often rewarded through huge payouts. It happens in the private sector too but only to a select few - not to the masses. But even with cases such as Fred the Shed, two wrongs do not make a right. This is playground politics again.

Please get real. Life changes, the World changes, faster and faster/ No one should expect to enjoy a coddled existence - let alone at the expense of others. You preach a more equal society, so p;lase put your money where your mouth is.

I have audited public authoritoes and public bodies in the past as well as private companies and seen the waste in the former compared with most private companies. I have worked in a large financial company where I did see some stupid waste, but the perpetrators were asked to leave when the Board realised what was going on.I have then worked in the medium sized private sector which forms the majority of private employment in the UK. Everyone is visible. If someone does not improve the bottom line then they go.

In order to compete in the World - which is Capitalist - then we have to constanly improve. Private companies know this. Most public bodies might but have little or no incentive to do so unless kicked. North Korea has opted out of the World system and the people starve

So rather than find lots of reasons why the public sector is marvellous and therefore should be immune to change let us recognize the FACT that public expendtiture is out of control and must be drastically cut. At 52% of the economy it is unsustainable whatever the problems in the rest of society.

Ted, you said "Personally, I don't think they want a confrontation but the RPI to CPI change has shown just what an untrustworthy and deceitful bunch this government is."

Anyone who has managed a business knows that you sometimes have to make very difficult decisions in order to keep the business solvent and that plans and discussions go on behind closed doors whilst scenarios are discussed. Is this being deceitful?

ps no one has mentioned Equitable Life yet.

There are too many people who have indexed linked pensions, especially people in Westminster and the public sector. These people have no incentive to have inflation controlled, either directly through their pension negotiations or indirectly when they vote.

Both public and private sector pensions would likely be sustainable if index linking was scrapped completely or else capped at the level of the Bank of England's target inflation rate (2%).

The value of pensions (and savings) could then be preserved through government action, encouraged by employees and pensioners through the ballot box.

In answer to one of the very first comments about the union leaders salaries and pensions...

Dave Prentis

Unison

£142,312

Union pension contribution 26%

Bob Crow

RMT

£145,548

Union pension contribution 31%

Mark Serwotka

PCS

£124, 876 (desperately needs a pay rise compared with the others!)

Union pension contribution 30%

Christine Blower

NUT

£140,167

Union pension contribution 28%

Re-post. Despite the essays above, many cannot see the wood for the trees.

Public spending has grown far too much relative to private (which actually pays the bill). This includes PUBLIC SECTOR PENSIONS.

Banks lent out money irresponsibly, encourage by the government(s) particularly in the US where the government promoted sub-prime lending and we followed suit.

The taxpayer is picking up all the cost (PUBLIC SECTOR INC PENSONS PLUS BANKS) either through taxation for bank bailouts or the excessive printing of money which will lead to massive inflation. This includes PUBLIC SECTOR PENSIONS.

We are all living the consequences of past decisions...... it's too late to change things but it suits the government that the public get distracted by things like this. A likely Greek default will crystallise the debate and accelerate our dropping living standards (just as a bailout of the Greeks will have the same results a little later). I wonder how many private sector/ insurance company backed pensions schemes will survive what's coming?

THE GENERAL PUBLIC MIGHT SEE THEIR PRIVATE PENSION PROVIDERS GET WIPED OUT IN THE COMING FINANCIAL CRISIS (JUST LOOK AT WHAT'S HAPPENING IN THE US). THEY WONT BE FUNDING GENEROUS PUBLIC SECTOR PENSIONS AT THE SAME TIME!

People who say "Yes, but the public sector schemes only accrue at 1/80th" are ignoring the fact that most public sector schemes award an additional tax-free lump sum on top of the pension, and not by commuting part of the pension to provide the lump sum, as all private sector schemes do. The overall effect is that, actuarially, the public sector schemes are as near as makes no difference accruing at 1/60th.

As I have always said in this country we have takers and givers and I am quite sure you can work out for yourself who are the takers and who are the givers!

The private sector is the life blood of this country without which the public sector would soon die!

Please also stop blaming the bankers it was labour that destroyed the economy by spending to much on, you guessed it, the public sector.

an elder one - thanks for the correction.

A single national pension fund fills me with horror. One of the things the public sector is not good at is making the sort of financial decisions that would involve. Think of the political pressures that would influence its decision-makers. Better is a distributed, fragmented system, like the one I am in - the Local Government Pension Scheme.

It is in the long-term interest of the whole community and economy for people to have built up an adequate pension fund by the time they retire. That way they manage their own lives - much better and cheaper for all concerned than becoming dependent on state provision or state support.

That is why, in this negotiation about public sector pensions, it is important not to create a situation in which public sector employees feel the deal is so bad that they start to drop out of the scheme. NEST is about filling the gap in the private sector provision - although it looks expensive to me.

In the medium-term we will have to change our attitudes to retirement. Moving most people from full-time work to full-time retirement in their sixties worked when life expectancy was shorter. Bismarck and Lloyd George bought in state pensions at the age of 70 which was above the average life expectancy at the time. The equivalent nowadays would be a pensionable age for men of at least 77 and for women of at least 81.

I am not suggesting this but I do feel the black-and-white approach to working/retired will have to change. It is after all, a relatively recent phenomenon of the western world. Why I am I sitting hear typing this instead of doing something economically useful?

Good comments on lump sums and indexing. I was persuaded, when changing employer from public to private, to go from 1/80 to 1/60th. They are almost the same after the lump sum calculation. However the old 1/80th schemes are fully index linked. The government has cleverly reduced the statutory need for indexing in the private sector from 5% to only 2.5% for service after 2005. Just when their spending has stoked up the massive inflation that's on its way (not in the CPI yet but it's here... petrol, bread, commodities....) So when inflation steals the pensions from the private sector, the public sector pensions will sail on unaffected!

An interesting set of comments.

Just a point regarding Union leaders, they are elected, so their attitude is of no concern to anyone who does not pay subscriptions. If you want a say, join a union

I accept that many Unions that exercise very selective admissions (Lawyers, Accountants, Institute of Directors CIPD etc) have been particularly greedy and have taken large slices of money from the public (through increased costs of goods and services) to pay for their own extravagent lifestyle (Take a look at the country's Legal Aid bill for example).

There is of course the bleat that these organisations are "professional" bodies. And the difference to trade unions is?

Really, the point is being missed.

By extending the retirement age and making it difficult for people to retire at all, jobs are going to be retained by a very old workforce. And as you get older, things start to go wrong with an increase in sickness absence and all associated disruption. and an increased cost to the health service and other public sector services. Which will have to be paid for by a generation that may not feel like stumping up, given the way they are being treated.

There are a limited number of jobs available and you really need to ask yourself why any young person, who has been denied access to further/highereducation and employment should, in any way, care about the older population. Remember, we need them more than they need us!

The fact that we are being told that public sector pensions are better than private sector ones surely means that private sector pensions should be improved. This would, of course, require greater accountability on the part of directors and a greater involvement of worker voice on the board.

This is the case in those countries that are more culturally developed than the UK who significantly do not appear to have the same percieved problems as us. One only needs to read Orwell to see the government's model for information management.

In the end, if you act like a doormat, you will be walked on. Private sector pensions have been allowed to decline in value because the private sector workforce lacked the nerve to do anything about it.

Those of you in the private sector whose employers pay large chunks into their pension need to be aware that this is an additional cost that is passed on to the consumer.

A simple way to reduce this amount is to reduce the amount of tax relief on employers contributions to employees pensions. Why not stop it all together?

Also, those of you in the 30-55 bracket who are on "comfortable" salaries. Are you sure that your job can't be done by someone on half your salary? Especially if they are willing to work without the employers contribution to their pension.

An additional benefit for younger people would be if you lose your job, and have your house reposessed then perhaps a younger person will benefit from a fall in house prices as well.

Remember, we are all getting older.....and your pension is next on the list.

I have paid 21% of my salary into the teachers pension scheme for the past 35 years. I could have chosen to opt out and enjoyed higher take home pay but it was a good scheme and if you cant trust the government with your money then who can you trust? My payments were for defined benifits and for 35 years those contributions have been used by the governments as a source of income. The inflation linking promised was to the RPI. The recent unilateral change to CPI is analogous to someone going into a restaurant and having a meal then trying to pay less for it when presented with the bill on the basis that they cant afford what they have eaten. Thats what those that are arguing "we cant afford it" are doing.

I have worked in the civil service, NHS & LA's. I am now working in the private sector AND in receipt of the (combined) public sevice pension. So I know its gold plated and not affordable - in future of course!

Ed Falk - are you trying to wind everyone up or are you living in the ruins of Longbridge along with the left wing mantra of the 50's?

It is well known that public salaries have now overtaken those in the private sector. Full stop.

I know many teachers. Only one of them struggled when he took on a house he could not afford, but now he is OK as interest rates are so low. Teachers start on salaries well above that of many graduates in private industry. Where I work those with good relevant qualifications and degrees from the better "old" universities start on £17k with no benefits, no pension contributions..... In fact the only BIK we give a a small Gym membership incentive. We have no subsidised restuarants, just 23 days' holiday - I could go on.

Any good teacher progresses to become head of department or so, and soon earns just as much as graduate middle managers. The ones I know have never had any need to save, so they go on several holidays a year, partly becuase they have the time off, and also because they have the money.

We in private industry have to save for a rainy day. You probably notice all of most fortunate private employees in their heyday. You do not notice all of those who are struggling. And you fail to understand that private industry moves fast, so those enjoying a good time often find that it does not last.

What is left out of the pay comparison is security. There are huge numbers of those from private industry looking fo a job, and they have to finance themeselves in the meantime (sometimes they get some redundancy to help - but redundancy payments in most of the private sector are not generous and far far less than those in the public sector. There are huge numbers of 50 plus ex middle managers from private industry who are looking for work but cannot get a job as they are too old or too experienced. They do not qualify for any sort of assistance so they are invisible in the jobless figures. So if you add this - ie lifetime earnings - to the equation, then on average public pay is a much more than private pay.

And then you add the pension difference on top. Do not tell me that good teachers are underpaid. And the police and fire service retire early on a good pension and then do another job.

The published facts are contrary to your stated opinion, and these leave out some huge factors which make your position even more untenable.

Please do not back down to the unions. We have to get back on our feet and be GB again.

Pensions are just part of a compensation package and shouldn't be viewed in isolation.

The comment is overly simplistic and typical of a union bashing Tory mentality that sees it as perfectly reasonably for greedy bankers and the executive classes to grab as much as they can but somehow morally wrong for workers to do the same.

Bankers demand bonuses because they can, good luck to the unions in applying the same tactics to maintain (not increase) their members financial packages. If restraint was shown at the top end of the income scale, it would be more reasonable to request it at the bottom.

Either we're all in it together or it's everyone for themselves!

The average teacher's pension is £10,000 a year index linked. That would require a pension pot of over £300,000! How many people in the private sector have even one third of that amount. I have adequate pension provision but my objection is why should I struggle & save for my pension but also be expected to pay for the pensions of millions of civil servants? Let everybody earn a salary and make their own savings or alternatively gives us all the same pension schemes as enjoyed by our sharing & caring politicians.

Just had to turn-off the email alert!

My solution, start training the army of unemployed graduates and professionals who have lost their jobs in the private sector to fill the public sector jobs, and sack the moaning, whinging, out-of-touch with reality so and sos that fill these cushy jobs at the moment.

Get real, be grateful you have a job at all!!!!!

And just for good measure, give the Unions a good bashing.

Should I go on strike on Thursday?

I’m tempted to go on strike, for old times sake, but I’m not sure if it’s justified. I worked in public service for about 7 years in the late 70’s/early 80’s. We used to take industrial action quite regularly and to be honest it was always quite entertaining. We used to march down to town with banners, drums and trumpets. It was certainly more fun than going to work.

I have a pension, from those days, which becomes payable when I reach 60. It’s not much but then I didn’t pay in for very long. As I understand it the Government is not proposing any change for pension already accrued. Is that right? Will my pension still be paid at 60 as expected?

If I am correct then I suppose there is no real justification for me joining the strike – pity, I quite fancy a bit of a march.

I am sure that public sector workers want their pensions to be self funding and not require a taxpayers' top up. That should be the governments "line in the sand". How that is to be achieved is surely negotiable.

I get the distinct impression that the government want to squeeze more than that from the public sector.

Well said, Nik. and Chris Hughes. There are folk on here saying governments have got it wrong and created an imbalance etc. However pensions are a long term prospect but in Jon's world he seem to believe that every time a government decides it has got its sums wrong it should be allowed to unilaterally rip up the terms and begin again.

Jon - the pragmatism you speak of is actually ultra one-sided, because governments haven't the will or the b---ls to actually tackle those "captains of industry" that take adavntage of the system. I'd be more impressed by your arguments if you showed as much fire in addressing that point. It is not playground poitics. That's just a silly phrase to try to establish some sort of superiority of argument. Life is a gamble, things change, but if every contract could be unilaterally altered when it doesn't suit or circumstances change all commercial life would grind to a halt. Oh yes. But labour contracts can as you point out. Not commercial ones though. More imbalance. And you are wrong. Contracts can be changed by an employer without reference to affordablity or redundancy being offered.

If one thing is illustrated by this discussion it is that unions in the private sector look to have had too little influence for too long, with the consequence that workers in that arena have left themselves vulnerable.

I want a fairer society. Fairer means beginning to tackle the top-heavy system we currently have, and tackling that first. Perhaps you think I work in the public secor when you ask me to put my money where my mouth is.

We must remember though when we talk of private sector and public sector that is a vast range of different models, sizes and enterprises so any generalisations are just that, and so not every criticism applies to every facet.

Yes, current employees should be exempt from changes not just on what is accrued until now. I'm sure there is scope for agreement for alterations - but not for changes every two or three years nor with a posturing , macho-minded government that is only bent on confrontation.

You didn't address my other point. The RPI/CPI change was inflicted on pensions in payment as well as on those already accrued. Is that right too? Moral: You cannot tust governments. Hardly the best way to go into negotiations over pensions, is it?

Indeed Ted - there is nothing like a piece of retrospective legislation to make people feel cheated by this government.

The Finance Bill of 2009 brought in retrospective legislation that limited the tax relief on contributions to personal pensions, so again, welcome to the real world. Rules change, politician's promises are broken, the country is broke and we all need to tighten our belts and be prepared to dig deeper to save for old age, and that doesn't just mean those in the private sector.

That`s fine provided you haven`t already reached "old age" - private or public!!

Teachers go on strike, I have to take a day's annual leave to look after the kids. If the unions are to be believed I may have to take more days off and end up with no family holiday. I only get 22 days a year, how much do teachers get?

Surely there has to be another way of campaigning for pay, terms and conditions than inconveniencing thousands of people who have no say in how other employees are treated.

What this looks like to me is a bunch of reasonably well paid professionals exercising their union muscle to the detriment of those of us who have no such power. Why should we have to suffer for their pensions either through strike action or additional taxes. It's not fair!

Nick O. That is a very strong argument that you have put forward. If I were a teacher I would be very embarrased reading your post. You might have to forgo your family holiday so I can protest against having to give up a benefit that I have but you dont have. I am not a teacher but I am embarrased for them.

lets see the top people in industry and mps give up thegold plated pensions and redundancy deals then the lower pay might not moan as much.but no we live live in a sort off power dictatership were when in power hit the people under you first then give yourself a pay rise for how much money you saved out off other people/ limit the final salery for above average workers pay

If the Cameron and Clegg back down we'll be back into the sixties where the unions called the politics. The £ has been devealued over the last four years by 27% against the basket of cuurency so we are all on the back slope. Anyone old enough to remember "Would the last person to leave the country please turn the lights out?" Keep the spirt on Maggie in mind boys.

Ah yes, the channel tunnel - well done Maggie!

To claim that the Teachers Pensions Scheme is unaffordable is simply untrue. Lorna would be well advised to see how the IFS and the NAO have assessed the public sector pensions schemes before writing such a prejudicial and ill-informed article. Here are some useful links that might clarify her many misapprehensions.

http://www.ifs.org.uk/publications/4452

http://web.nao.org.uk/search/search.aspx?Schema=&terms=The+impact+of+the+2007-08+changes+to+public+service+pensions

The Treasury brief was financial cost and sustainability. The NAO has calculated that the 2006-7 changes to the Public Sector Pensions Schemes make them sustainable and will save the country £67 billion over 50 years. The real problem is not the public sector but those betrayed in the private sector by their various companies. To target the successful schemes into which public sector workers have been paying is merely the poliics of envy.

And dont forget of course that had a certain Chancellor of the Exchequer of the day not imposed dividend tax on pension funds then all money purchase pension schemes would be significantly largely. Now what was his name?..... oh yes Gordon Brown! How many billions has the Government removed from money purchase pensions since then? Did it affect Public Pensions? erm...no! as these are based on final salary.

Labour Governments.... you've just got to love them!

We are all envious Chris.

I'm sure a lot of teachers are envious of bankers - or do they just have hatred for them.

The bankers got their bonuses because the government thought them a good idea - even Gordon Brown reminded us of how the bonuses were good as they pay taxes on them.

And, a lot of people are envious of teachers because of their pensions, pay-offs, holidays. I have heard a few teachers complain that they could not afford to go on holiday because they only get holidays when all the children are on holioday too, which means that holidays are more expensive.

Now the current government see the need to cut back on costs but horror of horrors, those that have a;ways had the good life, cannot accept a small cut in their income.

Teachers, as well as other strikers should face reality and get on with their life & jobs(if they are lucky to have one).

More fuel to the fire....

Chris, if what you're saying is true (and I have no reason to doubt you) why would the Government bother risking strikes, unpopularity etc.?

I know alot of detail about one ex-public sector scheme which has become unaffordable. It's not true to say that the private sector has fooled it's employees and pensioners. Most final salary schemes are affordable at the outset but most become unaffordable over time as suggested by the history of most schemes in existence.

It's probably true that their lives can be prolonged by various measures but eventually they'll all go the same way unless the workforces that fund them expand forvever or unless they become much less generous.

The only other way to keep them going is for the Government to regularly inject huge cash sums alongside the contributions made by members. At the moment that money isn't out there whether it's a private scheme or a public scheme.

At the end of the day what difference does the union or the teachers think a strike will make? All they'll do is annoy hard pressed parents for a few days. I'm not going to write to my MP or lobby parliament to say "Let those poor people have a pension I can't afford so that I don't have to take holidays to look after my kids." Surely as intelligent professionals they must be able to come up with a more imaginative way of making their point. Or maybe not!!!!!

"sgjhaghsdg" - Yes. What did you do about it? Please speak to "Jon" on here. He says two wrongs don't make a right. You seem to accept that "rules change, politician's promises are broken" is part of the real world. So is people trying to resist being rolled over by and scapegoated by an unscrupulous government, too.

To NICK O get a job at asda 25 days holiday , massive 6.40 per hour private sector jobs are great ! get on your bike

no they dont have to inject vast amounts of money ,just stop the above average wage earners having wage rises .just give them a set pay rise like the lower paid and that will reduce pension costs.2% of £10,000 is not the same as 2% of £50,000. plus big redundancey payments can be cut to say the average wage earner max. sick off hearing people knocking below average wage earners when the gread is from the very top down mps down with money to burn or waste. people on average wages just dont want to be poor when they retire not have second or third homes like the well paid

Hidden in the many myths about Public Sector pensions are a few facts that hopefully both the Treasury and Employee negotatiators will accept.. For me whilst Life expectancy has been increasing theres a range of more than 10 years between different localities. Sheffield ,Manchester,Stockport,Bolton...and what about Gothenburg where the same situation applies.One size does not fit all yet many of your correspondents want to penalise the lower paid (and less skilled both in the private and public sector.The longevity argument has been misunderstood by both sides.

For those interested in studying gold plated pensions can I suggest looking at the the top people in the Media sector.Guardian Media Group,Trinity Mirror, Associated Newspapers....

Chris Hopton. Thanks for the links. I have not read them but will.

One thing strikes me though – if the teacher’s scheme is adequately funded, as you say, perhaps teachers could run it on a money purchase basis with agreed employers contribution. That way the downside risk to the taxpayer is eliminated, private sector employees have no gripe and the teachers get any benefit from better than expected performance in the future.

Win-win-win.

Would you be ok with that?

Ted York - You should know that commercial contracts can be “broken” and terminated. One of the reasons for termination is if the contract becomes impossible to perform. In this case parties cannot expect “compensation” for their losses. I reckon we have just that case since the UK will go bust if we do nothing on public spending.

You have repeatedly failed to give any practical suggestion on how we can reduce public expenditure from 52% of GDP to a more manageable and typical 40%/.All you do is slag off those few at the top who are doing very nicely thank you. But if you taxed them all through the nose, you would not fix the huge deficit. In fact the result would be that the 52% would rise even further as private sector growth was stifled.

Your mantra is nothing short of a Communist approach. Whilst I do not approve of many of the huge pay packets at the top, I am sensible enough to realise that we have to cut public expenditure hard NOW and look at other issues in due course. But your train has left the station without you.

Chris Hughes – congratulations for saving 21% pa into a pension. I saved a similar amount, but at age 60 I was offered an index linked pension of 16% of my salary/ So you may feel you have earned a decent pension, but pensions are far more expensive than you realise.

Ed Falk – do I understand your reasoning > You state that the private cannot afford yo provide public services, so this tells you all you need to know about public sector’s relative salaries. Apparently you are suggesting that public sector salaries are unaffordable. It could (and is) also the case that we have to large a proportion of our workforce employed in the private sector of course. What a change in heart !!!

Peter - I presume that you are referring to the ongoing annual Brown tax as none of the proposed changes are retrospective. So I am not sure why you have made the comment about having already reached old age as current public pensioners will remain unaffected (unlike in Greece)

Chis Hopton – firstly by far the majority of workers in the private sector have never had DB pensions. The proportion of workers employed by the big companies ahs steadily fallen over the last 50 years.

Secondly, those DB schemes had to close because they were making the companies uncompetitive – ie they could not afford them and survive. Several commentatots have suggested that the fault is that private pensions are so bad, but I doubt that they have thought through the ramifications of what would happen if, say, private employees contributed 15% of salary and companies contributed the other 25% needed. The cost of private sector employment would rocket. Sterling would drop such that our exports remained competitive. Inflation would rip as imports cost more, and goods and services in the UK cost more. Those lucky enough to have undex linked pensions or accrued right to such sould be less affected than most, but then tax would rise to fund them. The cost of index linked pensions would rise so they would be even less affordable to private industry…….And those with savings would be robbed yet again. These are the prudent who have been trying to save for a rainy day when they lose their job and for when they retire. And the value of their pension funds would take a hit too as all of the investments in bonds (which have to form a large part of the fund portfolio) would be devalued.

So you see, what might appear to be a simple way forward is a minefield.

Anonymous 8 – you need some tuition on the real purchasing power of money and inflation. As the real value of Sterling falls, to preserve the real relative value of goods or labour you have to have proportional rises – not the same amount. On your basis, as the differential in cost between a Mini and a Range Rover was around £1,500 40 years ago, then a Range Rover should only be that much more than a Mini now !! The real problem is that differentials at the top have soared over the last 20 years, an mainly under a Labour Government. Child poverty has increased. All whilst that government was pouring billions of pounds it had not got into public services. Clearly the Labour environment encouraged bosses of big successful companies to pay themselves over the odds on the basis that their efforts alone were responsible for the success. And then senior public employees used this a a reason to dig deep in the trough. At least some of the overpaid top execs in private industry had short careers. So the answer is not to limit pay rises in the way you suggest, but to cut back on excessive pay packets (which include pensions)

Lots of debate on who is paid more/worth more but still not enough recognition that we have to cut public expenditure fast NOW. Those who do not think a pension trim is right – how would you do it then?

Sorry, I just don't agree: money should be taken from banks, from higher rate taxpayers, from closing tax loopholes, from anything that can be said to have caused the situation. It shouldn't be gained by making classes larger and wards bigger or from not having your rubbish picked up. I'd rather, by far, have something bankrupt and defensible than a solvent trasheap.

Additionally it is time someone exploded the myth that the public sector 'doesn't respond to market forces' - it responds to DEMOGRAPHICS. Unless you honestly think that class sizes have reduced recently? I think you'll find the reason there are more teachers is because THERE ARE MORE STUDENTS. So the public sector is the ONLY entity that responds to demand efficiently.

There is absolutely no basis for proposing taking money out of public pensions unless it is also done via taxation from private ones too. Perhaps that could be arranged? Would you like that?

Sorry to those of you who object to people proposing ethics as a basis of making decisions rather than finance/solvency. How outrageous of me! How how, - sentimental! How unbritish! How whatever I can say to sound 'mature' and 'practical'! I find the attempt to hide behind a facade of maturity to hide selfishness sickening.

And Jon this is naive in the extreme for you - you know that employment law is a lot more complex than this, and that it is actually THIS approach that represents Communism (or totalitarianism anyway):

You should know that commercial contracts can be “broken” and terminated. One of the reasons for termination is if the contract becomes impossible to perform.

Let me be clear: these contracts are not impossible to perform. They are impossible to perform without a lot of hardship and distress, mostly taking the form of envy, on the part of private sector workers. And that is FINE.

There is no basis for this in law, because you cannot enshrine theft as a legal principle. There is sometimes the process of terminating contracts and proffering a new (worse) one but that has to be negotiated too. And it could just as easily come from private sector pay, for example.

As for the idea that any public sector worker who doesn't propose a method of reducing the deficit isn't being 'mature' or 'sensible' (heavens your tone disgusts me) - I really honestly don't care. I didn't cause this. You did. You fix it.

Not that Nick is too interested in principles: the point you don't get is that public sector pensions are pay, and private sector pensions are a lifestyle choice. By all means make decisions over your own pension, but if you want to renegotiate my contract against my will you're in for a long hot summer.

Ben - expand your mind. Realise that what you propose will never cover the deficitt.The fundamental problem is that our depleted economy will not support such massive public expenditure. You may not like iike it niether do I.

You fail to realise or read previous points - money has already been taken form private pension funds to cover some of Brown's excessives.."So you cannot endshrine theft as a legal principle". Do you know anything about Law and Parlimentary powers? Do you know the legal definition of theft?

And you STILL fail to grasp the reality of the scale of the problem/ You fail to offer a way to reduce it. In summary you appear to have a belief (akin to Creationalists who deny evolution, or MMR objectors who pessibly lead to child deaths) as your arguments are emotional and idealistic - not factual.

I understand that it is futile to have any meaningful debate with those who have beliefs as bellefs are not rational; I hate to opt out of a discussion, but I recognize when hard facts are countered by emotional statements that no progress can be made, I will never help you see the facts. I am not a right wing rich peson bot am an experienced and well qualified commercial acoountant. My mission is to help poeple see through the fog surrounding our current problems, but then, like lemmings, perhaps we are all doomed to the realities of Greece

Therefore I will not be responding any further to your comments as it is not helping you determine how we tackle our current huge defict problems which will damage yoirr chidren (if any)

"Jon" - Apologies. When I talked of commercial contracts not being breakable I meant without the prospect of litigation. Of course, if a company is bankrupt that would be of no help. For an employee however, a major restructuring or change of role would result in either acceptance or redundancy. Other changes to a contract can be made with impunity unless challenged, which realistically depends on a number of factors.

Ben is correct in drawing attention to the high level of tax avoidance that has been prevalent in this country for many years costing us millions. It would show some sort of goodwill at least if a genuine attempt was made on that before even thinking about scapegoating public service pensioners.

I don't recall "slagging off" those in the higher echelons of industry. What is true, and even you must recognise, is that the high levels of boardroom remuneration have undoubtedly led to top public service workers enjoying seriously good remuneration packages themselves. Whether justifiable or not, it has created a market, and the argument will be that to attract the best people the "going rate"will need to be matched.

Why are public service pensions being targeted as a first priority? I'm all for greater efficiencies being introduced but not for attacking the terms people signed up to. Nor do I think that it is a good idea to allow private enterprise in to provide services, one because of their raison d'être , two because it will result in worse Ts and Cs for the lower end worker, as you seem to admit the private sector often has, and not necessarily a better service to the public. Railtrack springs to mind.

The real problem this country has is the way it has been led to believe in the so-called "free market" model. Wages earned here are spent in a good many cases, particularly at the higher end, on imported goods. This actually distorts the market. It means that for years we have not been paying the "going rate" for goods, encouraged to believe "cheaper" is a good thing. This has put British industry under pressure and fooled everyone into thinking we are more prosperous than we actually are. The French and the Germans, to name but two, would never treat their own industries in this manner. We are left to beg the Chinese to reciprocate our trade position and import more British goods. We should only be importing that which we cannot manufacture ourselves, or raw materials for the means of production. A high wage and high tax economy is what we should be aiming for to raise general prosperity.

Another point not raised so far is the projections on longevity. Though those in the business sector like to see an upward graph, the extrapolation of figures to predict longevity may give a false picture. As with investments, past performance is no guide to future performance. The "between the wars" generation were almost certainly exceptionally healthy, by and large. Modern generations have unhealthier lifestyles, diets and greater stress to contend with, and if our wealth diminishes, may not have access to medical treatments. Though you may say we have to prepare for the "worst case" scenario if longevity does decline what will happen to those pension pots? More pension holidays? It certainly will not be used to help the pensioners, of that I think we can be sure.

You use the word Communist as if it is some sort of insult, I sense. As the world has not seen pure communism (if human nature would even allow such a thing), it is hard to judge its merits or demerits. It certainly cannot exist in a sea of capitalism. Having never read a Communist Party manifesto nor "Das Kapital", I'm not in a position to know if I am a communist or not, nor do I care. What I do know though is that we have paid a high price for the Mrs. T philosophy of aggressive capitalism and "there's no such thing as society", mantra. It undid what was left of the unifying and cohesive spirit that we emerged with after WW2.

As regards the train leaving the station I am at loss to know to which train and which station you are referring.

"Jon" - Apologies. When I talked of commercial contracts not being breakable I meant without the prospect of litigation. Of course, if a company is bankrupt that would be of no help. For an employee however, a major restructuring or change of role would result in either acceptance or redundancy. Other changes to a contract can be made with impunity unless challenged, which realistically depends on a number of factors.

Ben is correct in drawing attention to the high level of tax avoidance that has been prevalent in this country for many years costing us millions. It would show some sort of goodwill at least if a genuine attempt was made on that before even thinking about scapegoating public service pensioners.

I don't recall "slagging off", those in the higher echelons of industry. What is true, and even you must recognise, is that the high levels of boardroom remuneration have undoubtedly led to top public service workers enjoying seriously good remuneration packages themselves. Whether justifiable or not, it has created a market, and the argument will be that to attract the best people the "going rate"will need to be matched.

Why are public service pensions being targeted as a first priority? I'm all for greater efficiencies being introduced but not for attacking the terms people signed up to. Nor do I think that it is a good idea to allow private enterprise in to provide services, one because of their raison d'être , two because it will result in worse Ts and Cs for the lower end worker, as you seem to admit the private sector often has, and not necessarily a better service to the public. Railtrack springs to mind.

"Jon" -The real problem this country has with its economyis the way it has been led to believe in the so-called "free market" model. Wages earned here are spent in a good many cases, particularly at the higher end, on imported goods. This actually distorts the market. It means that for years we have not been paying the "going rate" for goods, encouraged to believe "cheaper" is a good thing. This has put British industry under pressure and fooled everyone into thinking we are more prosperous than we actually are. The French and the Germans, to name but two, would never treat their own industries in this manner. We are left to beg the Chinese to reciprocate our trade position and import more British goods. We should only be importing that which we cannot manufacture ourselves, or raw materials for the means of production. A high wage and high tax economy is what we should be aiming for to raise general prosperity.

Another point not raised so far is the projections on longevity. Though those in the business sector like to see an upward graph, the extrapolation of figures to predict longevity may give a false picture. As with investments, past performance is no guide to future performance. The "between the wars" generation were almost certainly exceptionally healthy, by and large. Modern generations have unhealthier lifestyles, diets and greater stress to contend with, and if our wealth diminishes, may not have access to medical treatments. Though you may say we have to prepare for the "worst case" scenario if longevity does decline what will happen to those pension pots? More pension holidays? It certainly will not be used to help the pensioners, of that I think we can be sure.

You use the word Communist as if it is some sort of insult, I sense. As the world has not seen pure communism (if human nature would even allow such a thing), it is hard to judge its merits or demerits. It certainly cannot exist in a sea of capitalism. Having never read a Communist Party manifesto nor "Das Kapital", I'm not in a position to know if I am a communist or not, nor do I care. What I do know though is that we have paid a high price for the Mrs. T philosophy of aggressive capitalism and "there's no such thing as society", mantra. It undid what was left of the unifying and cohesive spirit that we emerged with after WW2.

As regards the train leaving the station I am at loss to know to which train and which station you are referring.

A lot of overnight posting here. Overseas by any chance?

Remember Equitable Life? Some policy holders were so determined to get their guaranteed pensions that the whole company went under.

Here you see the same thing with the public sector helping to take UK Ltd to bankruptcy.

Jon,

I have enjoyed your posts and agree wholeheartedly with enverything you say but as you have noted some people just do not understand the economics of the situation this country is in. They continue to believe it is the banks that caused this situation (the money we have lent to them is tiny compared to other problems) when in reality it was easy credit that expanded the economy too quickly along with overspending by the government for years.

One of the main reasons for the overspending is that public sector pensions have become simply unaffordable - how can we continue to pay the current level of pensions for 25/30 years of retirement when people only lived 5/10 years after retirement when they were brought in?

I am quite stunned that the public sector do not realise that even with all the proposed changes the government want to make to public sector pensions they will still be far far superior to what most in the private sector have access to.

Sorry Ted – I do not intend to insult you by suggesting that your ideals are of a Communist nature. I too would like a “fairer” society, but the impression you give me is that your version is far more extreme and utopian, and that Communist countries have tried that and failed. There is no point in following that route if it leads to deprivation of the entire Country apart from the ruling elite. Perhaps I am presumptuous in your eyes to dismiss Communism so flippantly.

Railtrack was a disaster, and given the billions of money the taxpayer has since put into Network Rail then Railtrack would probably have failed even if the Government at the time had not withheld the promised loans. Had it been funded half as well as Network Rail then it might have stood a chance, So this is not private versus public ability to do the job. It is simply an illustration that no one at the time realised how much it would cost to revamp our railway infrastructure. There is no evidence that putting it back into public ownership has been financially beneficial. But we do now have some £60 billion of off balance sheet extra public debt to pay off.

Your first point has merit – in other words buy British. How you would achieve this without trade tariffs I have no idea. The British population is more and more multi-cultural, and personal short term advantage matters more to most than any sense of Nationalism. But the position can be improved by us exporting more so that we can afford the imports, and producing more for ourselves to replace some imports. Quite apart from the unsustainable deficit, this is another reason why we must cut public expenditure to reduce some taxes so that labour and capital are more affordable. If we do not, then the depreciation of Sterling will do it for us, with high inflation which will be painful for most of us, especially the very poorest such as those without a job and pensioners living on fixed incomes.

Your second point is interesting. Advances in medical care will always tend to prolong life, but you may be right about some reversal in longevity. But I understand that actuarial calculations take into account the current statistics (a short lag) and not future guesses so there is no “fat” built in. So the change would have to be significant to alter the current estimates of the total public liabilities, and the latter would still remain at a figure few can comprehend.

The train represented the desperate need to cut our growing public and trade deficit, and you do not appear to be on it as many of your suggestions do not address the immediate problem. In a company, if you are running out of cash you have to do something drastic and fast. Prevaricating is not an option. The action is rarely ideal, but if it saves the company and as many jobs as possible then it is a success. As a Country we have the luxury of devaluing our currency which does not run directly in step with a Country’s performance, as it is based largely on the confidence of others that the Country can support its debt. Sterling has already fallen over 25% in recent years, and if we fail to cut public expenditure it will crash. People who have lent the Government (ie US) will have been stolen from economically. Internally the “theft” will continue to be from savers who see inflation outstripping their returns, and pension funds who lend a great deal to us, Externally lenders will give up on us such that any necessary support from the IMF will escalate – a similar problem to Greece.

As you can probably tell, I have become very frustrated in this forum by comments from quite a number who seem to be in denial about the deficit, do not appear to understand the consequences of doing nothing, think that someone else has the enormous resources needed to fix it let alone now, and who find all kinds of reasons why they should be protected from the pain we are all going through. They often do not appear to understand what some have already suffered, and what their denial will do to future generations. I appreciate that it is human nature to have some firm emotional beliefs which do not pass “scientific” reasoning – otherwise we would not have a plethora of religions for example. And I know that beliefs are very hard to change whatever the evidence. But I like to think that I may have dispelled some of the popular myths in the minds of some such as “the bankers caused it” and “let the bankers pay”. Incidentally in a previous post of mine about where all of the money went, I forgot to point out that a a very large proportion of the bank losses had ultimately gone to the Treasury in the form of the myriad of taxes paid by the very many people who benefitted from the spending by those who took the loans which went bad. In a way the bank bailout was a sort of QE. So the bank bailout was partly paid for in advance by itself ! It would not suit many people to understand that.

So thanks for your comment - it appears that some parts of your philosophy are not contray to mine but it is more a question of degree, But I still wonder if you appreciate the need to act fast and deeper than many might like, the scale of the problem in terms of viable alternatives and the underlying imbalance, deficit or no deficit, between public and non-public expenditure.which depresses our economy long term.

There has been some talk here of bitterness and jealousy being the reasons why so many in the private sector wish to see a reduction in the public sector pension bill.

We are all human,so there is undeniably an element of those emotions involved,but the main reason so many of us have had it up to here with the public sector unions on this issue -particularly those of us approaching or already in retirement-is that we understand the value of taxpayer funded index-linked pensions and what an incredibly good deal they will still be, even after the proposed changes.

Also,we are sick to the back teeth at being taxed to the hilt to fund them.

Personally,I have no objection to anyone receiving a good pension but I do object to having to pay for it as well as my own.

I recall someone complaining that their (teacher's I think) pension would be "only" £10,000/year.

To buy an annuity paying £10,000/year index-linked,with widow's benefits and lump sum payment in the private sector,would require one to have saved around £350,000 by retirement.

There are many people in the middle ranks of the public sector,doctors,police,teachers,etc who will retire on pensions whose equivalent would require a self-employed person to have saved well over £1 million by retirement from their own resources.Good luck with that one.

You can work out yourselves how much money would be needed to buy the pensions of the high-fliers in the Civil Service,hospital consultants,etc.etc.-£millions.

It's no wonder more and more of us are saying if you want those kind of pensions that's fine,but only if you are prepared to fund the lion's share of it yourself.

All of you guys use these people, yet now you want to simply discard their grievances.

Which of you sends you kids to a public sector school, or has ever used a public sector hospital or one of the emergency services, etc?

My guess is all of you.

When you join a job such as ours, you do so with the firm belief that if anything goes wrong at any stage, you will be looked after by the people you serve, not disgraced by the public and press as we are currently being portrayed as "sons and daughters of satan"

All we ask is that the government stop blaming us for all their problems.

OK, we get a decent pension, everyone knows that.

And yes, I accept that the tax payer pays for it, but the tax payer pays for far less rewarding things like, £1m missiles that hit Lybia, £50,000 missiles from Apache helicopters. Our legal aid bill is running at £3 billion a year and the likes of Steve Gerrard can abuse the system.

Tory MP eric pickles runs up a £277k limousine bill and nobody bats an eye!

I could go on and on and on.

You ALL know this but choose because you have been brain washed to pick on the more decent people in society.

We have paid at least 6% into this pension and none of us feel it fair to change the rules now.

I have geared my whole life and career to the fact that I will be retiring aged 60 with my decent pension.

I have paid £1,800 (at today's rate) into my scheme for 35 years, that's £63,000. If I'm lucky I will get 15 years pension (IF i live to 75) at £1000 per month, so that makes a total of £150,000. Is that really too much to ask of the british public for 40 years service? £87,000 if i'm lucky?

Imagine if I had invested that?

A rough calculation gives me a pension pot of £250,000 if that had been invested.

It's not our fault that the deal was that our funds don't get invested.

I know the private sector has taken some hits with the pension pots but some of these have now recovered and you have the Pension Guarantee scheme, so things have improved and I am one of those who wants everyone to have a decent pension anyway, and not have to go to the government for state hand outs, which is what will happen if you carry on with this attitude. How does me going to the government aged 60 for a state hand out help anyone?

Lastly, this blog as taught me one thing in life, trust no-one. If this is the way you treat your friends, god help your enemies, that's all I can say.

50 years ago my Professor at Manchester would warn his researchers that they would encounter people who would say "Don't confuse me with the facts. My mind is made up".Judging by most comments,this spirit is still alive and thriving

.

Local Government Pension schemes are of course funded.In the case of Greater Manchester Pension Fund, with assets of over £11 billion pounds, at a 97% solvency level. The mean retirement age is over 61 and moving towards the normal retirement age of 65. Well under 10% of pensioners receive as much as Mike B. The third of pensioners with less than £2000 per annum pensions save the Treasury enormous sums which they would otherwise receive in pensions credits and benefits. I've not noticed anyone mentioning this !

Mike b - a passionate argument.

It is our government that takes us to ALL wars.

Although not many people vote during elections we have to accept the majority vote result. Our current system allows for our current government to exist.

In other words, the wars are a shared responsibility – unless you are a Liberal voter who deserts the party they voted for as soon as they have to face the real world.

You are unfortunately in a system where your working conditions have only got better over the years (apart from pupil behaviour??).

Financially, things have been changing in the world, since China decided in early 1980s that ‘to get rich was good’ – global finance.

The UK is now suffering the effects of this and we are going to have to share the burden – the cases you mention of a few rich people at ‘the top’, will always apply anywhere in this world.

But since a lot of public servants live on Mars, they think the current financial problems do not have to be shared with the rest of the UK electorate.

Sorry for the cheap jibes – just providing more fuel.....

"Jon" - Any action that just redistributes wealth between the lower ends of society but avoids the top layers is doomed to failure. As people grow poorer so they don't have the money to buy good and services, particularly those they or the wealthier produce, until their income and standard of living falls so low that they can compete with the China's of this world. Market correction. The richer folk will not suffer similarly as they are shielded both by their wealth and the ability to to shift it and themselves overseas. More so now we have so many from overseas domiciled here. This is precisely why this debate is so divisive and why I believe the focus of it is entirely wrong, and the perceived problem not the real issue at all.

If we implement your philosophy, what next? What will that solve ultimately? Wealth isn't money, it is resources. As a nation we have few. After using what we did have we had an empire to use both for resources and as a market. That is what our wealth was founded upon. It has gone. Been declining since WW1. Further decline is inevitable, it seems to me. The financial sector is one of our few "resources" whilst money and wealth have the illusion of being the same thing and that is why governments are frightened to lean on them too much, and in part, that is why the wealthy are not paying their fair share.

The amount of benefits paid out just illustrates how skewed our economy has become. Too many need the state to support them just to keep their heads above water. The attack on public sector pensions (lower end/ middle) will not help that but merely defer it and increase it ultimately as even more pensioners will require help. Oh, and we'll need more workers just to manage the benefit payment system probably.

I suggest we all see what comes from the ongoing negotiations before being too hysterical. The strike is a legitimate expression of discontent and is valid. And as with war, ultimately a negotiated settlement is all that will resolve matters. My suspicion is that the unions fear that the govt. will come back every few years to nibble away a bit more ( a not unlikely scenario) if they manage it once. Meanwhile, you private sector people. Organise yourselves to protect your interests. Not to go on strike but to try and stop yourselves being "legitimately" robbed here, there and everywhere.

It is not to be lighly dismissed, the call to stop non-essential spending, such as the Libyan Adventure (though I have sympathy for their cause). We also need to be looking at becoming more food and energy self-sufficient if we are to protect ourselves, but this is straying off the central point.

Lastly my point about Railtrack was the compromise in safety by cost cutting and outsourcing, action which was philisophical and not truly one of financial resource.

Intended to mention our other major resource; education. Having well educated and skilled people is an essential in creating/utilising wealth. This is generally accepted, so the actions of this government re this sector is bewildering. For all its perceived ills, taking aim at the institutions and people that are in this sector seems short-sighted to me.

Make all public sector pensions paid up with immediate effect including MPs and judges and auto enrol everyone into NEST.

Use the savings first to pay off the deficit and then to dramatically reduce taxes on wealth creation and employment.

If not, then in ten years time this country will be crushed by the likes of China, India, Brazil etc

It's simple the private sector cannot sustain 6,000000 people in the [public sector in index linked final salary schemes. All the shouting and striking from this largely under emplyed group of people will make no difference ; the Country has finally run out of money, and owes too much in Bonds already to continue borrowing to finance these grotesque ,but desireable pensions. If any individual wishes to have such a pension ,then work and save for it yourself. It is the only way now. The private sector is no longer producing profits from the UK economy to pay the Tax required. Most of the low skill operations have been transported to China where they work for a week for the same wage British low paid workers get in 8 hours. What do you expect? Tough reality I know but that is how it is. Britain will be forced to realign and seriously adjust its pay structure if it wants to survive A major transfer of resources away from the low productivity and inefficiencies of the Civil Service is now imminent, . Every individual now needs to examine their own skills to sustain a good living in the future.

As well as afforadability, one of the issues that has arisen on this forum is that because public sector pay has caught up with private sector pay, public sector pensions should be reduced.

Over the next 10-15 years and assuming a recovery, I would expect private sector pay to forge ahead of public sector pay. What happens then?

Should public sector pay keep pace with private sector pay? If so, what impact will this have on our finances? If it doesn't, what impact will this have on recruiting, for example, good quality teachers, to help future generations develop "their ... skills to sustain a good living in the future", given that pay and pensions are likely to be poorer?

Anonymous 4, you make and interesting point about the future. Much if not most of care and related jobs are now in or moving to private sector. This means that the care of pensioners and the vulnerable is in the hands of profit and loss and we don't need to look far to see how poor it is becoming.

Already they are beginning to close and declare bankruptcy. The cost of keeping these companies going is staggering in relation to what the client gets for their money. No matter how well you thought you had prepared, private care will eat it up until they go bust and say goodbye. Many of the services gone private are not working, they are sawn off versions of what you pay for.

Many of them have tens of thousands of vulnerable people in their care.

The public sector is slowly disappearing from these areas and I don't think it will exist in that time frame as the services we pay for with our community charges etc vanish, but will the tax payer pay less? Who will care for the pensioners when the companies that have taken the work on say sorry we've gone bust.

The title of this string is a bit inflammatory and of course got the desired effect. Personally I think we need to keep public services in the public sector. The privatising of every service could go very bad and get very expensive for the tax payer, we may wish in years to come we had just shut up and paid the pensions. Remember most public service staff don't have these high pensions I would imagine most of the money goes to retired upper management on 20 to 40 thousand a year while Joe Bloggs on the ground take the can back from the general public for it all.

@ John Pantall

Remember that many pensioners will have more than one occupational pension (i.e. they will have preserved pensions from previous jobs) and/or they will not have worked all their lives for the same employer. Thus, the fact that many pensions are small does not necessarily mean that the pensioner concerned will retire in poverty.

@ Anonymous 10

I agree that the MPs need to get themselves sorted out first (e.g. no further index linking of their pensions) before we can have any real progress.

Dear Ted York

Please sum up what should/should not be done with Public Sector Pensions in no more than 50 words. Ta.

"Gone for a Cuppa" - Certainly. No change for those already signed up. For new entrants re-jig subject to genuine negotiation between the Government, the various unions representing scheme members, and I would include the Opposition also to try to get a lasting concensus. Is that okay?

Ted York - Thanks. Justify please why current active members' future accrued benefits should not decrease.

After all, many private final salary schemes have put existing members' future accrual into dc arrangements.

Mike B – I hope you are not working in the educational sector, and certainly not teaching maths as you are triple counting. First you state your contributions in to-day’s money, so if your fund grew at the same rate as inflation then that is what your fund would be. Currently funds are generally growing less than inflation as interest rates are so low, But then you double count. You add the amount you will take out of the fund in pension to the fund !

And then your next error is to inflate this when if you have an index linked pension, it is all effectively in today’s value.

The £63,000 you have paid in in to-days money would buy you an index linked pension of around £2,000 pa. 6% contribution is low. Many people work for employers who contribute nothing, so to get a reasonable pension they have to pay in at least 25% and more like 35% now – pretty unaffordable for them.

The cost of missiles and Apache helicopters is peanuts compared with the taxpayer contribution to public pensions and is therefore somewhat irrelevant. It is like saying you should have a new car because your neighbour has a new kettle.

The pension guarantee scheme cover just final salary pensions. If the fund goes bust it pays most of the pension, so these people end up worse off that public employees – unless the UK goes bust like Greece and can pay only part of all pensions.

The pension guarantee scheme does not in any way support pension funds and the majority who have DC schemes. These schemes cannot go bust – they just pay out far less than people were expecting.

Anonymous – the days of boom are over for a long time. We have a ginormous deficit to pay off which will take a generation or two. We have a large trade deficit which will have to be closed. We are living in a more competitive World. So I doubt that private industry salaries will boom – many have been frozen or even cut over the past few years.

David Harvey – The need for care homes is increasing. Unfortunately many council run homes have had to close as their running costs have become too great. Obviously one or two private companies have found the same. But there are very very many independent retirement home organisations which provide excellent facilities and are financially sound.

Many, not all. Poor form. All part of the race to the bottom for the majority of workers. Can private schemes honestly justify doing that? S'pose it depends on the scheme and the company. Quite an easy option - no resistance.

Poor form - are you a Teacher ? ! I did say many ! Trend is, in a few years almost all will have gone that way. Believe it is about 90% currently.

Economics I am afraid dictate. A few schemes have tried to resist but market forces if it means lay-offs.

At least some Public Sector Schemes belong to The Transfer Club so those re-employed elsewhere often benefit from this.

No such luck in the Private Sector !

Incidentally , am retired so not a Union basher !

"Gone for a Cuppa" Perils of blogs and keeping it brief. I was repeating your words, "Many, not all", for emphasis, not pulling you up. I meant the move to dc is poor form, not what you wrote. Transferring the risk to the pensioner, as well as being cheaper.

Believe you me, there are plenty of union bashers out there, retired or otherwise.

Without repeating everything (good, I hear you say) I don't think it is all economics but as much about power - power to resist and power to enforce. The system is set up to favour the enforcers. So be it.

Even public service pensions will need topping up by the state in future in many cases. Very interesting times ahead for us all.

Dear Ted

Thanks. Sorry I misinterpreted your words.

I agree with what yiu say.

Gone for a good Rest.

Turned off emails.

jon

you need to understand that a a man o £10.0000 still has the same loaf of bread or pint of milk to buy at the shops that is why percentage pay rises looks after the well paid and the overpaid while the poor get £200 pay rises a year did you get that a year other council workers will get 2 3 4 5 6 7 8 9 10 times that pay rises a year plus pension pots and that is why there should be caps on percentage pay rises

The reason why the public sector appears better paid is because most of the low paid jobs jobs have been " outsourced " to the private sector. Something to bear in mind the next time you're in an NHS hospital ( after Bupa have told you they don't have the facilities ie too expensive) and your stomach has turned at the state of the toilets; as the private firm has cut the number of cleaners by half, they have to make a profit.

Several posts above ignore the fact that most jobs transferred from the public to the private sector were transferred under TUPE: a piece of legislation that was modified to ensure that the public sector pensions remained attached to the newly privatised posts.

Anonymous 8 - of course I understand that percentage pay rises are percentage pay rises, although with increasing taxation, any differential is becoming less valuable in real terms, especially as most essential goods do not attract VAT, but "luxuries" generally do. What we need to do is reduce public spending such that we can eliminate the annual defict and then raise the personal allowance in real terms Payroll tax does not start at 20%, but is closer to 40% taking into account both employer and employee NI.

But your approach would eventually mean that a big promotion would be worthless in real terms We would all end up earning the same whatever our skills, experience and contribution. This has been tried and does not work !. But I would agree that differentials at the top of many organisations has become to great. This does not mean that all differentials are not justified.

Jonners - where does your information come from? Comparisons compare jobs with similar requirements. I suggest that your explanation is a myth you want to believe. And when I have visited NHS patients in a BUPA hospital I have been surprised at the cleanliness and pleasant facilities, I even get offered a cup of coffee and can sit in a proper lounge chair !!

Well Jon, my experience is personal. when I became seriously ill, my father who had paid into Bupa for over 30 years was told we can't handle this take your son to the NHS When my wife was in an NHS hospital she told me the toilets were beyond description. when I kicked up hell about this, I was told nothing to do with us Guv, it's a private company, and they employ half the cleaners we used to have on minimum wage

Re: care homes and being financially sound. I really doubt that. All the signs are that there are enormous companies and companies within companies out there with unimaginable losses and liabilities. They should be put back in the public sector and funded through recouping the £120 billion lost each year through tax evasion.

It'll change politically when the awful thing that happened to Jonners in the NHS hospital is happening to the rest of those that read this. The important thing is not to think that this is anything to do with the public sector!

Try again

Jon, I hope you don't work in a peanut factory in your little "private sector world" as you obviously don't know what peanuts means.

The war in Iraq cost this country 26 billion.

The pension so called deficit is 1.8 billion.

The war in Lybia is as so far cost 260 million.

Also, your the one who doesn't know what he is talking about. When the economists talk about pension defiecit, they are lying to eveyone, has it really means future pensions. So should every public sector worker retire today then thats what the deficit is, but of course, thats not going to happen.

Look for yourself at economicshelp.com

Tells you an impartial view there.

And try not to believe everything you read in the mail or the sun if you can.

Jon how many of these care homes do you actually go into? I go into quite a few. I work with elderly and unless you have accrued a fortune life can be grim.

Carers on minimum wage often a skeleton staff and still there's not enough profit.

I wish people could see what is happening first hand as I do, It might change a lot of views.

Mike B – obviously I struck a nerve when I pointed out that your maths was up the creek.

The total accrued liability of the UK is £13,000,000,000,000 (£13 trillion) The figure you quote are peanuts compared with that.

You also say that economists are lying as they are talking about future pensions. Well that is EXACTLY what this discussion is amount. We want to ensure that our children are not saddled with an impossible debt.

Perhaps you should learn about finance, or if you take out a loan do you ignore it as you will have to pay it back only in the future? Unfortunately too many people did this which caused the financial crisis (but not the bulk of the current deficit).

I do not read the Mail or the Sun, and have qualifications well above most in the educational sector. I do not work in a peanut factory, but continue to work past my retirement as, although I contributed to a sufficient pension, its value has fallen more well more than 50%.

Like the majority of the population I have to pay for my pension above the state pension. As the cost of pensions has spiralled I have to pay more or face a much lower pension. Under such circumstances I object to paying increasing amounts so the public employees can have their cake and eat it.

Your emotional comments cannot stand up to facts. And I would hope that all in the educational sector teach facts and not myth.

David – elderly care costs a great deal, and I believe that both some private and public bodies are finding this out. I am not disputing this. But for those lucky enough to be able to afford it there are many very good private homes and retirement housing associations. I was looking at the sector only recently for my 98 year old Aunt, but she has perked up and decided to stay in her bungalow. Many of the schemes were not that expansive if one had a property to sell to fund the purchase of a flat and could be subsequently financed from existing state benefits..

Jon she is lucky to have you. The morbid truth about where care for the elderly is and is going is a true horror story. I have been doing my job for some years now but still loose sleep thinking about what I have seen and heard.

Most care for the elderly is failing. Its the real results of that failure that the public generally don't see first hand.

You keep looking after your aunt, a good advocate is the best thing they can have without that things can get grim.

From personal experience with a privately owned nursing home for my late mother, I can only concur with David`s observations.

The non-nursing staff turnover was horrendous and even the nursing staff admitted the shortcomings due to the "for max profit" mentality of the owners.

Engaging the ever changing staff in conversations over a 4 year period revealed that the home was one of the better ones in the region and that many were much worse and not necessarily cheaper!!

Reducing pension provisions of dedicated career nursing staff is likely to drive them abroad or out of the profession and discourage new entrants.

And of course carers can earn more per hour at Tesco`s on the weekend - so bang goes weekend cover(a regular understaffed occurrence).

A bleak future awaits or perhaps the one way (Smedley) ticket to Switzerland !