AS public sector employees are being asked to accept changes to their pensions, could someone explain how it would be of benefit to the tax payer if:
n Pension contributions are to be increased by three per cent;
n Pension payable is reduced by one third;
n Overall management to be moved from local management to central management.
As we see it, public sector employees are paid a salary from tax payers’ contributions.
Once it becomes salary then any pension variation will only affect the employee not benefit the tax payer.
The only benefit is to the pension fund, which will grow by the additional three per cent contributions and grow further as the pension payable to employees will be smaller.
Therefore it is safe to assume that when George Osborne states that the new high speed rail link is to be paid for by ‘pensions’, does he mean the larger public sector pension fund that is under central control and therefore subject to a ‘Robert Maxwell-style’ raid on the increased fund.
It would appear that the current pension funds have sufficient to service the public sector employees’ pensions well into the future so the only beneficiary to any changes will be repayment of the deficit and commuters from London to Birmingham.
Is the increase of three per cent not then a stealth tax on public sector employees and not, as repeatedly stated by the current government, ‘necessary to cut costs’ or ‘save the tax payers money’?
This being the case, then public sector employees should be supported in their effort to halt these changes.
Public sector employees are into the third year of a pay freeze which will benefit tax payers should this not be enough.
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