A rare voice of sanity on public pensions

This opinion comes from The Ledger Independent in Kentucky, USA, and is rare in that it actually captures the full range of people and organisations that are to blame for the current public sector pension crisis:

Taxpayers should be furious that lawmakers – through greed, mismanagement and inaction – have allowed this system to deteriorate. State employees should be equally as angry at the prospect that they may never collect the pensions they have been promised.
It perfectly captures my feelings on the current situation. Most[1] public sector employees are angry that the pension deal they were promised when they joined will no longer be valid, taking an effective pay cut. Most taxpayers are angry that their prospective private and state pensions are shrinking rapidly when the pension rights accumulated by public sector employees, which are funded through their taxes, are protected. Not enough attention is paid to the weasel and financial illiterate state and national officials who agreed to these pension deals and never cared about whether there would be enough money in future to fund the promised payments.

This, incidentally, is what infuriates me when the BMA complains about rising contributions when the UK NHS pension system is in "surplus":

The BMA argues the NHS pension scheme is currently in surplus to £2bn a year, which is returned to the Treasury. It says: "Given that the amount being paid into the scheme currently exceeds the amount being paid out, there is no justification for further immediate increases. They equate to an additional tax on NHS staff to help pay for a economic deficit which they did not create."
Listen up, you financial illiterates. The reason the NHS pension scheme is in surplus currently is because of the steady increase in staff numbers - 20% increase in the 10 years 2001-2011. If you're so confident that the scheme is in surplus, let the NHS pension scheme keep that £2bn and accumulate it. But as soon as the pension scheme falls into deficit, it comes out of the pensions and salaries of the scheme members; the Government is no longer involved. Like that idea? Thought not.

[1] Those public sector employees in the UK who have retired or are about to retire are quids in - their deal is effectively untouched. This is not the case in the USA where public sector pensioners are paid out of current state and county budgets - if there's no more money, their pensions could well be directly at risk.

No comments:

Post a Comment

All comments are subject to retrospective moderation. I will only reject spam, gratuitous abuse, and wilful stupidity.