The real pensions divide; not private and public but haves and have nots

I just love that scary pig!

Sometimes, the work of another blogger provides the motivation for a blog post. Today the work of two of my colleagues, and a comment on one of those posts, has inspired me to write a post which might be way off base but I hope provides some food for thought.

Last week one of my colleagues, reflecting on the pensions strike argued that in reality the public and private sectors aren’t so different. This followed up a piece from the week before discussing the future of the local government pension scheme. In that post my fellow WLLGer had written that there was general agreement that local government should maintain a final salary scheme.

A commenter (code name Jeremiah) pointed out that actually many would prefer a career average type of scheme as it did more to even out the benefits between those on ‘normal’ salaries and the ‘high-flyers’.

When you add the two posts and the comment together it got me thinking:

Is the real divide in terms of pensions not between the public and private sector but between those who are reasonably ‘well-off’ and those that aren’t; or to put it another way the ‘haves’ and the ‘have nots’.

The average pension in local government is £4,000 for a man and only £2,800 for a woman. This would not be considered ‘gold-plated’ even by the most cynical Daily Mail reporter. Yet, the pensions for a middle manager with 30 years experience in the sector would be fairly substantial and probably match quite closely the teachers pensions (apparently £24,000 pa) that were being derided by Ministers and parts of the press in the run up to Thursdays strike.

Those who are in good jobs also have a benefit of good pensions. The same is true in the private sector. Mr WLLG has a good job and his company give him a good pension too. But I bet the cleaning staff at his office don’t get such a good deal much like the cleaning staff in my office don’t.

The more I think about it the more the poster on Friday was right. The public and private sector are more similar than we think; certain staff get well rewarded for their work and others don’t. The same applies to pensions and other benefits.

There will be people reading this who will argue that this is a problem without a real solution. The nature of the free-market and supply and demand of labour is that some are well rewarded for their skills whilst others are not.

Personally, I can’t help but feel that pensions are more of a societal issue than one of pay and rewards. So, if I’m right that the divide is really between the haves and have nots, when we are contemplating strikes surely we should also be focusing on things that benefit those at the lower end of the spectrum; we might even find our private sector comrades are willing to join in for a similar campaign (she says optimistically)?

Step 1 in this crusade? Jeremiah is right; let’s see all public sector final salary schemes move to a career average basis and take away the disproportionately large benefits from those at the very top of the tree.

The rest will be more of a challenge.

(With thanks to RG)

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3 Comments on “The real pensions divide; not private and public but haves and have nots”

  1. Entirely agree, key difference is that private sector has greater extremes of haves/have-nots and higher levels of risk-reward generally than public sector. Cleaners in many public sector offices are private sector contract staff on minimum wage anyway.

  2. […] how lucky I had it.  Well you know what?  I’m striking for them to.  This shouldn’t be a private/public sector debate.  This should be a debate about why workers need pensions and then how those pensions are actually […]

  3. Raymond Says:

    Hi there,
    I thoroughly love your new thoughts on The real pensions divide; not private and public but haves and have nots We Love Local Government & will be back again.

    Bye for now.

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