Public Sector Pensions

Some public sectors workers in England have been protesting today because of changes to their pensions.  Despite increasing their pensions contributions by 3% and increasing their retirement age from 60 to 65 years, the UK government plans to reduce  their pensions when they retire. The government initially claimed that the current arrangement was not affordable.  However, when it was pointed out that affordability was not a problem, the government changed its tune and stated that they wanted to bring parity between public and private sector.

What does this really mean and what are the issues?

The private sector has been gradually eroding or eradicating pensions for workers in that sector and in cahoot with the government increasing retirement age.  (Senior managers and directors in the private sector, however, continue to enjoy lucrative subsidised pensions and retire early.) The government argue that because of pension changes in the private sector it has to change pensions in the public sector.  This only make sense in that the government can reduce  public expenditure, and in the private sector companies can increase their profits and in doing so give generous dividends to their shareholders. In doing so the rich gets richer even in this time of economic downturn and the less well off becomes poorer, the economic disparity widens.  The consequences of these profit orientated greedy approaches will surely have an effect on national economies in future as poverty expands in the rich and developed world. Sufferings in old age for many hard workers will increase.  Will it then be resolved through public expenditure and at a high cost?  Does it really make economic sense on the whole?

Instead of reducing workers pensions in both the private and public sectors and increasing poverty in old age, would it not make more sense for these governments in the rich and developed world to have a truly fair poverty eradicating pensions policy across the board that would apply equally to both the public and private sectors including senior managers and directors? These policies would need to be properly administered and regulated unlike the banks.  However, I believe that such a system would create a happier, more fulfilling, harder-working and stronger society and nation and would benefit globally. Let's work towards a happier and fairer world.

This is obviously one view.  I would very much welcome comments from readers to ensure a fair debate.

 Good Bye and Good Luck until the next time.

Knight Owl