Robin Hood in Reverse (3)
Here's the final post in my Robin Hood trilogy - Robin Hood in Reverse (3) - which illustrates how low paid workers subsidise the better paid - when it comes to final salary pension schemes.
Show me a low paid cleaner who's had lots of years added to her pension - boosting the final value enormously - and I'll eat my hat.
Robin Hood in Reverse (3)
"The Sunday Herald yesterday highlighted another example of how final salary pension schemes - operate as Robin Hood in Reverse - see previous post dated 2 July 2010.
Paul Hutcheon reported on a truly amazing pension package - paid to a senior fire official from Lothian and Borders.
The kind of enhanced pension package that is never available to low paid workers - such as carers, cleaners, cooks or classroom assistants - who are effectively subisiding the final salary pensions - of middle-ranking and senior managers.
Here's a summary of the article:
"Fire chief took £350,000 to retire … then came back to work days later"
"A chief fire officer landed a £350,000 retirement pay-out before being re-appointed to the same post just days later, the Sunday Herald can exclusively reveal.
Brian Allaway, 57, pocketed the lump sum but was allowed his six-figure job back on the grounds of expertise. Allaway, the former firemaster at Lothian and Borders Fire and Rescue Service, last year managed to take advantage of a little-known scheme known as “abatement”.
The system allows staff to retire, access their pension pot, but then get their old jobs back.
Allaway, who earned around £122,000 a year, effectively retired on September 13 last year following more than four decades of service. He walked away with a near £350,000 pension payment, but was then re-employed as firemaster on September 21.
Allaway retired for good in June this year, after a nine-month stint that was worth more than £100,000 in salary. The deal was approved by Lothian and Borders Fire and Rescue Board. A spokesperson, speaking for the former firemaster, said he could have retired seven years ago, but chose to work on instead.
According to information released under freedom of information legislation, the Service also paid £19,202 to meet Allaway’s travel needs since 2007. In the same period, the taxpayer was charged £7,220 to meet his accommodation costs and another £1,415 to cover subsistence.
The board also shelled out £20,683 in November last year to provide the firemaster with a Volkswagen Passat 2.0TDi Highline, two months after he was re-hired.
Allaway is the second senior fire official to have benefited from the retire-and-rehire deal.
David Dalziel, the Grampian firemaster, reportedly received a £350,000 lump sum after his contract ended on December 31, 2008. However, the fire chief was re-hired the next day on the same £130,000-a-year salary.
MSPs are now calling on Scotland’s eight fire services to reveal how many such re-hires have been pushed through for senior staff.
The Lothian and Borders service has agreed 35 deals under the policy in the last three years, while the Service in Strathclyde has re-employed 24 uniformed staff in the last three years.
A spokeswoman for Lothian and Borders Fire and Rescue Service said: “In June 2009 the Fire Board agreed to allow Mr Allaway to abate his pension and be re-employed. The policy on retirement and re-employment follows changes to the pensions’ regulations in 2007 and is supported and approved by the Fire Brigade Union and the Lothian and Borders Fire and Rescue Board.”
Note the spokeswoman's comment that the pension regulations have union backing - as well as the support of the employer.
Show me a low paid cleaner who's had lots of years added to her pension - boosting the final value enormously - and I'll eat my hat.
Robin Hood in Reverse (3)
"The Sunday Herald yesterday highlighted another example of how final salary pension schemes - operate as Robin Hood in Reverse - see previous post dated 2 July 2010.
Paul Hutcheon reported on a truly amazing pension package - paid to a senior fire official from Lothian and Borders.
The kind of enhanced pension package that is never available to low paid workers - such as carers, cleaners, cooks or classroom assistants - who are effectively subisiding the final salary pensions - of middle-ranking and senior managers.
Here's a summary of the article:
"Fire chief took £350,000 to retire … then came back to work days later"
"A chief fire officer landed a £350,000 retirement pay-out before being re-appointed to the same post just days later, the Sunday Herald can exclusively reveal.
Brian Allaway, 57, pocketed the lump sum but was allowed his six-figure job back on the grounds of expertise. Allaway, the former firemaster at Lothian and Borders Fire and Rescue Service, last year managed to take advantage of a little-known scheme known as “abatement”.
The system allows staff to retire, access their pension pot, but then get their old jobs back.
Allaway, who earned around £122,000 a year, effectively retired on September 13 last year following more than four decades of service. He walked away with a near £350,000 pension payment, but was then re-employed as firemaster on September 21.
Allaway retired for good in June this year, after a nine-month stint that was worth more than £100,000 in salary. The deal was approved by Lothian and Borders Fire and Rescue Board. A spokesperson, speaking for the former firemaster, said he could have retired seven years ago, but chose to work on instead.
According to information released under freedom of information legislation, the Service also paid £19,202 to meet Allaway’s travel needs since 2007. In the same period, the taxpayer was charged £7,220 to meet his accommodation costs and another £1,415 to cover subsistence.
The board also shelled out £20,683 in November last year to provide the firemaster with a Volkswagen Passat 2.0TDi Highline, two months after he was re-hired.
Allaway is the second senior fire official to have benefited from the retire-and-rehire deal.
David Dalziel, the Grampian firemaster, reportedly received a £350,000 lump sum after his contract ended on December 31, 2008. However, the fire chief was re-hired the next day on the same £130,000-a-year salary.
MSPs are now calling on Scotland’s eight fire services to reveal how many such re-hires have been pushed through for senior staff.
The Lothian and Borders service has agreed 35 deals under the policy in the last three years, while the Service in Strathclyde has re-employed 24 uniformed staff in the last three years.
A spokeswoman for Lothian and Borders Fire and Rescue Service said: “In June 2009 the Fire Board agreed to allow Mr Allaway to abate his pension and be re-employed. The policy on retirement and re-employment follows changes to the pensions’ regulations in 2007 and is supported and approved by the Fire Brigade Union and the Lothian and Borders Fire and Rescue Board.”
Note the spokeswoman's comment that the pension regulations have union backing - as well as the support of the employer.
