Public sector pensions are not gold-plated

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A leading teaching union has called on politicians and the media to "stop vilifying public servants" by claiming their pensions are gold-plated.

A malicious and mendacious myth keeps occurring in the media, a myth that seems to be encouraged in an attempt to undermine the public sector by fuelling public prejudice, and spreading the idea that public sector = public enemy.

Public sector pensions are not 'gold-plated'. To quote Lord Hutton (yes, the author of the government-commissioned Independent Public Service Pensions Commission's report):

"It is wrong to say that public service pensions are gold-plated. The average pension paid to pensioner members is about £7,800 a year. About half of pensioners receive less than £5,600 a year. And 90 per cent of pensioners receive less than £17,000 a year. Although these figures are partly accounted for by part-time or part-career working, these pensions provide a modest – not an excessive – level of retirement income."

Members of public sector schemes have usually contributed (yes, contributed – they do pay into their pensions) five to six per cent of their income towards their pension. It seems likely that these employee contributions will have to increase significantly in the future.

The government has already changed the method of calculating pensions by moving linkage from the Retail Prices Index (RPI) to the historically less favourable Consumer Prices Index (CPI).

Voice believes that public sector pensions (that is, the teachers' and local government schemes that affect its members) are sustainable, and rejects the argument that public service pensions are too expensive. They are fair and affordable.

Public service pensions have already been through a sufficient process of review and reform.

The government has taken steps to make changes to public service pensions without the full facts. It states that the schemes are not affordable, yet in 2007/2008 changes were made to the teachers' pension schemes and the local government pension scheme in response to Treasury requirements to make them affordable.

These changes should be given time to work.

Three main changes were made:

-retirement age was increased to 65 for new members;
-contributions were increased; and
-employers' contributions were capped.

The Teachers' Pension Scheme for England & Wales was due to be revalued in 2008 but the government will not allow this valuation to take place. The Scottish scheme is due for revaluation in 2011.

Because these valuations have not been carried out, the government, which has not allowed them to take place, does not have the evidence to prove that the schemes are not affordable.

Public sector employees, such as those in schools and local government, are naturally very concerned about the possibility of retiring later and contributing more, especially at a time of pay freezes, spending cuts, student debts etc.

So, politicians and the media, stop vilifying public servants. Remember the massive and essential contribution to society made by the public sector. Take away the schools, nurseries, colleges, hospitals, refuse collection, etc and society would collapse.

Public servants and their work are gold – not their pensions.

Philip Parkin, general secretary, Voice: the union for education professionals.

Throughout recess, ePolitix.com will be focusing on a different policy theme each week. This week we are featuring articles with a focus on the public sector and government cuts.