Pensions and the Low Paid
The government has finally announced its plan to reform public sector pensions - and yesterday set out proposals which aim to get the better paid groups paying more.
The very best paid, i.e. those earning well over £100,000 a year - as many as 40,000 employees apparently - are to be asked to pay an extra £3,400 towards their pensions.
But the better paid have been getting their pensions subsidised for years - by lower paid colleagues and the taxpayer more generally - because of the final salary scheme arrangement.
The issue at stake is whether these generous subsidies continue - or whether those that benefit most - pay more into the scheme to maintain the future value of their pensions.
Final salary schemes are to be phased out, but not straight away - and replaced with a career average calculation - which is fairer to everyone involved.
Because it means that what people get out is directly linked to what they pay in - over the course of their working lives.
The proposals affect NHS workers and teachers in England and Wales - and civil servants throughout the UK.
The government has been quite clever - it has to be said - because anyone earning £15,000 or less will not pay any increase at all.
Which takes a lot of low paid, mainly women's jobs - right out of the picture.
In general, the government is proposing that people earning between £15,000 and £21,000 - will pay a 0.6% increase from April 2012.
So the increase for this group will be small - and the upper limit for teachers has been raised to £26,000 to minimise the impact on new entrants to the teaching profesions - as a special case presumably.
But there's no doubt that the highest earners will pay more - a doctor on £100,000 a year, for example - will pay almost £2,000 a year more.
Staff in the £50,000 pay bracket - of which there are many - will pay £768 a year extra.
The chanages are based on a report form Lord Hutton - a widely respected minister in the last Labour government.
So it will be interesting to see how the unions respond - and whether they are egged on by the new Labour leadership.
Because if union leaders call for more strikes - they will be asking their lower-paid members to strike in favour of the better paid.
And since the proposals have no effect at all on anyone earning £15,000 a year or less - mainly women of course - it's questionable whether they should be included in any strike ballot - if they are not actually 'in dispute' with their employer.
Likewise but to a lesser extent with the £15,000 to £21,000 group - who face a 0.6% increase - they will be asked, if strikes do go ahead, to take action in support of their much better paid colleagues.
The weak in defence of the strong - now that will be an interesting campaign slogan - if it is ever put into practice.
The very best paid, i.e. those earning well over £100,000 a year - as many as 40,000 employees apparently - are to be asked to pay an extra £3,400 towards their pensions.
But the better paid have been getting their pensions subsidised for years - by lower paid colleagues and the taxpayer more generally - because of the final salary scheme arrangement.
The issue at stake is whether these generous subsidies continue - or whether those that benefit most - pay more into the scheme to maintain the future value of their pensions.
Final salary schemes are to be phased out, but not straight away - and replaced with a career average calculation - which is fairer to everyone involved.
Because it means that what people get out is directly linked to what they pay in - over the course of their working lives.
The proposals affect NHS workers and teachers in England and Wales - and civil servants throughout the UK.
The government has been quite clever - it has to be said - because anyone earning £15,000 or less will not pay any increase at all.
Which takes a lot of low paid, mainly women's jobs - right out of the picture.
In general, the government is proposing that people earning between £15,000 and £21,000 - will pay a 0.6% increase from April 2012.
So the increase for this group will be small - and the upper limit for teachers has been raised to £26,000 to minimise the impact on new entrants to the teaching profesions - as a special case presumably.
But there's no doubt that the highest earners will pay more - a doctor on £100,000 a year, for example - will pay almost £2,000 a year more.
Staff in the £50,000 pay bracket - of which there are many - will pay £768 a year extra.
The chanages are based on a report form Lord Hutton - a widely respected minister in the last Labour government.
So it will be interesting to see how the unions respond - and whether they are egged on by the new Labour leadership.
Because if union leaders call for more strikes - they will be asking their lower-paid members to strike in favour of the better paid.
And since the proposals have no effect at all on anyone earning £15,000 a year or less - mainly women of course - it's questionable whether they should be included in any strike ballot - if they are not actually 'in dispute' with their employer.
Likewise but to a lesser extent with the £15,000 to £21,000 group - who face a 0.6% increase - they will be asked, if strikes do go ahead, to take action in support of their much better paid colleagues.
The weak in defence of the strong - now that will be an interesting campaign slogan - if it is ever put into practice.
