Labour caves in over public sector pensions
Discussion
Faced with the rapidly growing problem of funding the generous pension promises made to public sector employees it is vital to reduce the cost.
The government proposed raising the public sector to 65, but has caved in very rapidly to union pressure, and it will now only apply for new employees.
BBC Article
Deal on public sector pensions
Trade unions and the government have agreed a deal over the future of several public service pension schemes.
The TUC says the government has dropped its suggestion that current members of the health, civil service and education schemes should retire later, at 65.
In exchange the unions have accepted that a higher retirement age will be phased in for new staff.
The TUC said the agreement was a "sensible compromise" which meant that pensions promises would not be broken.
The trade union organisation hailed today's agreement as a major breakthrough which it would recommend to its members.
The government had originally proposed that a higher retirement age be introduced for the existing pension scheme members from 2013.
The TUC said its members now "need suffer no detriment in their pension arrangements".
This deal is unacceptable from the standpoint of British business
David Frost, British Chambers of Commerce
Trade and Industry Secretary Alan Johnson, who has been leading the government's negotiations, was also pleased with the deal.
"This is quite a breakthrough because the normal pension age in education, health and the civil service will be 65 for new entrants from next year," he said.
But business leaders were furious and claimed the government had caved in to union presure.
Detailed negotiations
Each of the pension schemes for health, civil service and education staff has its own rules and regulations.
They accepted all the facts about demographic change; they accepted the need to move to 65 as a normal pension age
Alan Johnson, Trade & Industry Secretary
The shape of any future schemes for new employees will now be negotiated in detail.
According to the TUC, the government has agreed that new schemes will still be linked to earnings and be index-linked to protect them against inflation.
Also, retirement at 60 will still be an option if future staff wish to fund retirement at that age by making higher contributions.
But according to Alan Johnson the unions "accepted all the facts about demographic change; they accepted the need to move to 65 as a normal pension age".
Negotiations over the local government pension scheme and firefighters scheme are taking place separately and a TUC spokesman said they were nowhere near as advanced.
Dave Prentis, the general secretary of the trade union Unison, said: "We want the principles established here to be applied to the local government scheme. These principles have been endorsed by the Cabinet.
"It is important that the promise made to teachers, health workers and civil servants applies also to the more than 1.3 million local government workers."
The government first started proposing changes to the various public service and local government pension schemes last year.
Although they have different features, a common theme of the government's plans has been a raising of the standard retirement age, typically to 65, instead of 60.
The aim has been to cut the cost of running the pension schemes, which has been rising partly because people have been living longer.
Union opposition
The TUC's annual conference in September was told that 13 different unions, representing more than three million public sector workers, would engage in the biggest industrial action since the 1926 General Strike if the government pressed ahead with its plans.
But business organisations have been pressurising the government to act to extend the retirement age immediately.
The CBI recently demanded that public servants work longer before retiring.
On Monday, the British Chambers of Commerce (BCC) complained to Tony Blair that it was unfair for the public employees to have better pension arrangements than private employers.
David Frost, director general of the BCC was furious at today's agreement: "This deal is unacceptable from the standpoint of British business.
"The government needed to grasp the nettle and increase the public sector retirement age for existing employees on a sliding scale. They have failed to do this" he added.
The government proposed raising the public sector to 65, but has caved in very rapidly to union pressure, and it will now only apply for new employees.
BBC Article
Deal on public sector pensions
Trade unions and the government have agreed a deal over the future of several public service pension schemes.
The TUC says the government has dropped its suggestion that current members of the health, civil service and education schemes should retire later, at 65.
In exchange the unions have accepted that a higher retirement age will be phased in for new staff.
The TUC said the agreement was a "sensible compromise" which meant that pensions promises would not be broken.
The trade union organisation hailed today's agreement as a major breakthrough which it would recommend to its members.
The government had originally proposed that a higher retirement age be introduced for the existing pension scheme members from 2013.
The TUC said its members now "need suffer no detriment in their pension arrangements".
This deal is unacceptable from the standpoint of British business
David Frost, British Chambers of Commerce
Trade and Industry Secretary Alan Johnson, who has been leading the government's negotiations, was also pleased with the deal.
"This is quite a breakthrough because the normal pension age in education, health and the civil service will be 65 for new entrants from next year," he said.
But business leaders were furious and claimed the government had caved in to union presure.
Detailed negotiations
Each of the pension schemes for health, civil service and education staff has its own rules and regulations.
They accepted all the facts about demographic change; they accepted the need to move to 65 as a normal pension age
Alan Johnson, Trade & Industry Secretary
The shape of any future schemes for new employees will now be negotiated in detail.
According to the TUC, the government has agreed that new schemes will still be linked to earnings and be index-linked to protect them against inflation.
Also, retirement at 60 will still be an option if future staff wish to fund retirement at that age by making higher contributions.
But according to Alan Johnson the unions "accepted all the facts about demographic change; they accepted the need to move to 65 as a normal pension age".
Negotiations over the local government pension scheme and firefighters scheme are taking place separately and a TUC spokesman said they were nowhere near as advanced.
Dave Prentis, the general secretary of the trade union Unison, said: "We want the principles established here to be applied to the local government scheme. These principles have been endorsed by the Cabinet.
"It is important that the promise made to teachers, health workers and civil servants applies also to the more than 1.3 million local government workers."
The government first started proposing changes to the various public service and local government pension schemes last year.
Although they have different features, a common theme of the government's plans has been a raising of the standard retirement age, typically to 65, instead of 60.
The aim has been to cut the cost of running the pension schemes, which has been rising partly because people have been living longer.
Union opposition
The TUC's annual conference in September was told that 13 different unions, representing more than three million public sector workers, would engage in the biggest industrial action since the 1926 General Strike if the government pressed ahead with its plans.
But business organisations have been pressurising the government to act to extend the retirement age immediately.
The CBI recently demanded that public servants work longer before retiring.
On Monday, the British Chambers of Commerce (BCC) complained to Tony Blair that it was unfair for the public employees to have better pension arrangements than private employers.
David Frost, director general of the BCC was furious at today's agreement: "This deal is unacceptable from the standpoint of British business.
"The government needed to grasp the nettle and increase the public sector retirement age for existing employees on a sliding scale. They have failed to do this" he added.
my company pension scheme is now suggesting that one of the ways to fill the ever increasing hole in our funds is for all of us to work an extra couple of years past 65. They have already doubled our contributions over the last couple of years and now this - I wonder what the finance sector would think if I started losing their money as quickly as they have been losing mine?
What really annoys me, is that according to the cocaine snorting, public school, labour youth, nazi blairite, fu**wit politicians, is that the economy is doing WELL.
The ba$tardos keep on screwing me over. They let my job and weapons go to the Chineese, take my freedom, my money, my old age, and then teach me to read and write (again).
How is it that people keep on voting for this crap?
>> Edited by dilbert on Tuesday 18th October 15:49
>> Edited by dilbert on Tuesday 18th October 15:54
The ba$tardos keep on screwing me over. They let my job and weapons go to the Chineese, take my freedom, my money, my old age, and then teach me to read and write (again).
How is it that people keep on voting for this crap?
>> Edited by dilbert on Tuesday 18th October 15:49
>> Edited by dilbert on Tuesday 18th October 15:54
tonyvid said:
my company pension scheme is now suggesting that one of the ways to fill the ever increasing hole in our funds is for all of us to work an extra couple of years past 65. They have already doubled our contributions over the last couple of years and now this - I wonder what the finance sector would think if I started losing their money as quickly as they have been losing mine?
That illustrates the difference between the private and the state sector in terms of pension provision.
In the private sector Final salary schemes are being closed to new entrants and existing members face less generous terms.
This is because companies have to make some calculation of their future funding requirements NOW.
In the public sector the value of unfunded future pension commitments is in the hundreds of billions and rapidly growing. I think that when these current workers are retired and drawing their pensions government spending will have to rise by at least 2% of GDP purely to meet these pension commitments.
Far from doing anything to tackle the problem Labour has hired an extra 700,000 public sector workers, most of whom are on generous pensions schemes, and so made the problem worse.
JagLover said:
They have some figures in today's telegraph about the scale of this problem.
The taxpayer will have to pay nearly £700bn to provide the pensions already promised to those on the public payroll.
This measure is too little too late.
I note the lack of pural 'The Taxpayer' well whoever he is I don't envy him one bit.
timmy30 said:
They have some figures in today's telegraph about the scale of this problem.
The taxpayer will have to pay nearly £700bn to provide the pensions already promised to those on the public payroll.
This measure is too little too late.
I note the lack of pural 'The Taxpayer' well whoever he is I don't envy him one bit.
Poor bu**er
Zod said:
They were hardly like to screw over the people whose jobs they created and who are their core voters, were they? They'll recover the money by further taxing those of us in the private sector.
Sadly true
For the most part Labour have governed Britain for the benefit of their core supporters rather than in the interests of the whole country.
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