Robin Hood in Reverse
In all the angry rhetoric from union leaders - over public sector pensions - I've yet to hear one of them welcome the principle of introducing career average pension schemes - to replace the present 'final salary' pension schemes.
Now why would that be?
Because a career average scheme - is much fairer or more 'socialist' - if you care to put things in such terms - since what you get out at the end - reflects what you've actually put in over the years.
Whereas a final salary scheme is designed to boost the pension pots of the better paid - because they are based on what you are earning when the music stops - and nothing else matters.
Len McCluskey - the new general secretary of Unite - is as good an example as any to illustrate the unfairness of final salary schemes - having just been appointed to his new job at 61 years young.
Now let's assume young Len gets paid £150,000 a year - and that he's got maximum service in the Unite pension scheme - which sound like reasonable assumptions.
A final salary scheme could deliver to Len a pension worth £75,000 every year (half his final salary) - and a tax free lump sum worth £450,000 (three times his final salary) - depending on exactly how the Unite scheme works.
Yet he will have been in the job for only a maximum of four years - which sounds bonkers and is bonkers - because Len won't have earned anything like £150,000 a year during the course of his trade union career with Unite.
And just as in councils up and down the country - and across the NHS - the lower paid staff in Unite, the union - are effectively subsidising the pension pot of their biggest boss.
Nothing about that is fair, socialist or trade union minded - and in the case of the public sector it's a scandalous way to use public money.
And that's why final salary pension schemes should be re-titled as - Robin Hood in Reverse Pension Schemes - because they take from the pension poor and give to the pension rich.
Now why would that be?
Because a career average scheme - is much fairer or more 'socialist' - if you care to put things in such terms - since what you get out at the end - reflects what you've actually put in over the years.
Whereas a final salary scheme is designed to boost the pension pots of the better paid - because they are based on what you are earning when the music stops - and nothing else matters.
Len McCluskey - the new general secretary of Unite - is as good an example as any to illustrate the unfairness of final salary schemes - having just been appointed to his new job at 61 years young.
Now let's assume young Len gets paid £150,000 a year - and that he's got maximum service in the Unite pension scheme - which sound like reasonable assumptions.
A final salary scheme could deliver to Len a pension worth £75,000 every year (half his final salary) - and a tax free lump sum worth £450,000 (three times his final salary) - depending on exactly how the Unite scheme works.
Yet he will have been in the job for only a maximum of four years - which sounds bonkers and is bonkers - because Len won't have earned anything like £150,000 a year during the course of his trade union career with Unite.
And just as in councils up and down the country - and across the NHS - the lower paid staff in Unite, the union - are effectively subsidising the pension pot of their biggest boss.
Nothing about that is fair, socialist or trade union minded - and in the case of the public sector it's a scandalous way to use public money.
And that's why final salary pension schemes should be re-titled as - Robin Hood in Reverse Pension Schemes - because they take from the pension poor and give to the pension rich.
