British public sector workers face smaller pensions
And you thought Wisconsin's governor Scott Walker was determied to gut public service unions.
If Sir John Hutton gets his way, British public sector workers could pay more for their pensions, receive lower payouts and have to work much longer before retirement.
Hutton’s main recommendation, carried over from an interim report last summer, is that the final salary link for public sector pensions should be replaced with new schemes which calculate pensions on a "career average" – the norm in many Canadian pension plans which generally take an average of your last five years on the job.
Although accrued pension benefits in the existing schemes would be fully protected, this would still mean lower pensions for the majority of workers and could mean cuts of up to 40% for higher earners.
Other controversial recommendations include linking public sector normal retirement age to the state pension age, currently 65 but due to increase to 66 for both men and women by 2020.
Many existing public sector employees, although not recent hires, still have a pension age of 60. Some, including the armed forces, police and firefighters can currently retire several years earlier than that and Hutton suggests a normal pension age for these workers of 60.
Tough to swallow, sure, but things could have been be worse.
In an earlier report, Hutton had considered a hard cap on the amount higher earners can receive from the plan and simply switching everybody into the cheaper defined-contribution schemes which are now the norm in the private sector.
Pension reform is a hot topic these days. Do these changes make sense to you? Sholuld they influence Canadian thinking on the topic?
By Gordon Powers, MSN Money
Posted by: Sheldon Ansley | Mar 14, 2022 3:02:42 PM
These changes could not come soon enough. And this is not anti-union - we don't begrudge the generous public sector benefits, we just object to them being backed up to such an unfair extent by taxpayers. Fund more of your own retirement like the rest of us.
Posted by: Russ Rowe | Mar 14, 2022 4:51:17 PM
Contrary to public belief, workers in the public sector make a lot less than the exact same job in the private sector. They usually accept that in exchange for the increase in job security.....( the government cannot go bankrupt like a private company). Most do not make an excessive pension. The ones that do make excessive pensions are the MLA"s and MP's that receive a full pension after two terms in office. They make more pension after 6 years service than government workers after 35 years. Now that is porkbarrelling...... and they try to blame the public service for their largess. Also, when they do two terms in provincial politics and two terms in federal politics, they recieve two full pensions....
Russ
Posted by: SP | Mar 14, 2022 5:18:44 PM
"Corporate balance sheets haven't been in better shape over the last 200 years, period," says Joe Davis, the chief economist at fund giant Vanguard."
Whilst the Billionaires gorge the poor fight over the remaining scraps.
WAIT, I know the solution, more Tax Cuts for Businesses ! BWHAHAHAHA....
Ahh yes the race to the bottom is well and truly on.
Posted by: lockhunt | Mar 15, 2022 5:26:44 AM
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Posted by: Cliff | Mar 15, 2022 9:21:08 AM
The comments that the person Russ stated is right on the money! It would be nice for once that the so called government in power would look at the MPs and MLAs pension. These pension amounts are very high and indexed for inflation at very high rates. I work as a federal employee and I do pay into my pension fund to receive a better pension. I will not get the full benefit until the age of 65. So, where is this outrageous public section benefits? I would be nice for a change that the people who write these articles get accurate facts and not write to get sensationalism and stir up hatred. This seems to be the norm now, to stir up hatred in the public by the press and government. Someone is always looking to be in the spot light these day.
Posted by: trev | Mar 15, 2022 11:59:02 AM
government emplyees are overpaid under worked and to protected from termination! There is always a bit of truth to the rumors. I have many friends in the government who also agree. You could get rid of 30% of the workers and still run a competent government. Austerity I cant wait. give the money back to small bui9siness and to the private sector ! dollar in the private sector is better than 10 in the public sector as the private sector pays for all of the public sector funding.
Posted by: don | Mar 15, 2022 6:25:06 PM
I agree with Cliff. It is not the frontline worker getting outrageous benefits but the MP, senate and the higher up people. The lower rung civil servants are probably just as upset as you over what the "boss" that stays for a few years gets. As far as wages, most government jobs I know of are paying above what the private sector is paying, at least when compared to what I am getting for what I do. All I need to do is look at job postings and they are paying well above what I make without factoring in the pensions, benefits etc.