Wednesday, July 7, 2010
UNISON rejects fat cat attack on public sector pensions
Date: Wed 7 July 2010
UNISON Scotland has strongly rejected the latest attack on public sector pensions as simply scaremongering by fat cats anxious to keep their own incomes bloated at the expense of cuts for ordinary workers in both public and private sectors.
Dave Watson UNISON Scottish Organiser said:
"The scaremongering by the fat cats today is designed once more to disguise the real pensions divide - between rich and poor, not between public and private sector. Public sector pensions are not gold plated, and they don't cost the billions which these fat cats are claiming. The Institute of Directors is simply anxious to keep its members incomes bloated at the expense of cuts for ordinary workers in both public and private sectors."
A report published today by a new body called the Public Sector Pensions Commission, for the Institute of Directors, has been given widespread coverage in mainstream media. It claims that public sector pensions are costing the taxpayer twice as much as had previously been thought, and that as a result public service workers should pay increased contribution, have their pension age increased and have their pensions reduced.
Dave Watson said:
"In reality the average local government worker gets a pension of around £4,000 per year when they retire. It's a tiny fraction of the fat cat payoffs. And public sector pensions are affordable overall.
"The culprits behind this attack on the pensions of ordinary public service workers are in fact directors of the biggest private companies - real fat cats, with really gold plated pensions. This self-styled 'independent' Public Sector Pensions Commission is nothing of the sort. It is a front for right wing think tank the Institute for Economic Affairs and the Institute of Directors, a club for the bosses of big business.
"Further analysis of this report shows that the time frame chosen for the figures has been highly selective - it just looks at the recent crash when stock values and interest rates have been low - which means returns on pension fund investments have also been low. If the same calculation was done when the market was on the up - as it was and will be again, unless the government causes another recession with its budget cuts - we could slash employee contributions to nothing."
"Also, not all pensions are unfunded. Even for those, there have been years where government has not needed to put extra cash in."
Note for editors:
The TUC has shown that the real evidence of a pensions divide is mainly to be found in the private sector where bosses have been busy closing good schemes to workers, often while making sure their own very large pensions are protected.
The TUC’s 2009 Pensions Watch study of 373 directors from 103 of the UK's top companies found that they were set to earn a yearly pension of £247,785 on average. This is 30 times the average workplace pension that ordinary workers (across public and private sectors) receive, which was £8,320 in 2009. (An increase on 2008 when the bosses took 25 times the average pension - it seems the fat cats like their own pensions to be recession proof as well.)
When it comes to accrual rates, the bosses make sure they are feather-bedded too. Pension Watch 2009 found that the most common accrual rate for directors was 1/30th, in comparison the most common accrual rate for all members of private sector final salary schemes is 1/60th. What that means is that directors on average accrue pension benefits twice as fast as both their own workforces, and indeed the public sector workforce as a whole. (The Institute of Directors now wants the public sector to move to 1/80th).