MPs To Lose Final Salary Pensions
According to recent press reports Westminster MPs are set to lose their final salary pension scheme - following the recommendations of a public sector pay body.
The Senior Salaries Review Body (SSRB) is recommending that MPs basic pension be changed from "final-salary" - to an amount based on their average career earnings.
Broadly speaking this means that what MPs' get back out of their pension scheme - will be directly related to what they actually pay in over their working lives - which seems all very fair and reasonable.
Because final salary schemes mean that lower paid workers end up subsidising the enchanced and much more generous pensions of their better off colleagues - see post dated 2 July 2010: 'Robin Hood in Reverse (2)'.
What's striking is that real leadership on this issue is finally being shown by a Conservative - Liberal Democrat coalition government - not the Labour party that was in power for 13 years.
Labour talked the talk for years, of course - 'For the Many Not the Few', blah, blah, blah - but the reality of final salary pension schemes was that the many were actually subsidising the few.
In practice, low paid council workers subsidised the enhanced pension payoffs - of their much more highly paid managers - not remotely a fair concept, never mind a socialist one.
So, it's good to see a government finally having the bottle to refrom the system - which was long overdue.
Local councillors in Scotland have been on a career average pension scheme for years and - as we all know - what's sauce for the goose should be sauce for the gander.
Especially in these difficult times.
The Senior Salaries Review Body (SSRB) is recommending that MPs basic pension be changed from "final-salary" - to an amount based on their average career earnings.
Broadly speaking this means that what MPs' get back out of their pension scheme - will be directly related to what they actually pay in over their working lives - which seems all very fair and reasonable.
Because final salary schemes mean that lower paid workers end up subsidising the enchanced and much more generous pensions of their better off colleagues - see post dated 2 July 2010: 'Robin Hood in Reverse (2)'.
What's striking is that real leadership on this issue is finally being shown by a Conservative - Liberal Democrat coalition government - not the Labour party that was in power for 13 years.
Labour talked the talk for years, of course - 'For the Many Not the Few', blah, blah, blah - but the reality of final salary pension schemes was that the many were actually subsidising the few.
In practice, low paid council workers subsidised the enhanced pension payoffs - of their much more highly paid managers - not remotely a fair concept, never mind a socialist one.
So, it's good to see a government finally having the bottle to refrom the system - which was long overdue.
Local councillors in Scotland have been on a career average pension scheme for years and - as we all know - what's sauce for the goose should be sauce for the gander.
Especially in these difficult times.
