Few topics invoke more rage in certain bits of the media than public sector pensions. In fact the term ‘public sector pensions’ is rarely used in some places without the prefix ‘gold-plated’.
My situation has forced me to get to grips with my pension position but before now I’d hardly paid much attention to it. The annual trustees report said they had enough money and I knew roughly what I would be getting. This contrasts with the popular image of public servants gathering frequently in darkened groves to cackle with glee at their undeserved good-fortune.
But, of course things have now changed for me. So I read the executive summary of today’s Interim Report of the Independent Public Sector Pensions Commission with interest.
Coverage of the report has focused on the signalled end of the defined benefit (final salary) scheme. I think few of us in public service expected this to survive in any event. Aside from the cost, the growing divide between private and public pension provision meant taxpayers were rightly growing restless about paying for better pensions than they could afford for themselves.
Pensions are complicated things though. I think I’ve only ever met four or five people who claimed to be able to understand pensions and I think two of those, at least, were fibbing. Pensions for most public servants hover around in the background most of the time. People don’t become public servants because of the pension at least not in my experience. It’s usually far more complicated than that.
But as your career progresses and you get years under your belt the annual pension statement gets more important. For those of us in the second halves of our careers planning for retirement gets more important. You also begin to think about how you can use things like lump sums to pay kids’ student debts or help them with housing. So it’s little wonder that public servants are now profoundly worried about the future.
I was chatting the other day to civil service colleagues whose organisation is the subject of an ‘in principle’ abolition decision. After we’d said our hellos and established that we were all ‘ok’ (after applying the current discount factor for well-being public servant ratings – today’s ‘ok’ is last year’s ‘terrific’) we got into how things were going. Their biggest source of immediate angst is the Bill current hurtling through Parliament that will fundamentally change the redundancy terms of civil servants.
On the face of it I can see why soem find it difficult to get too sympathetic about this. It’s certainly a way to win plaudits from the anti-public servant brigade and it will reduce the costs of redundancies. But folks who know they are almost certain to be made redundant feel they are being kept hanging around for the legislation to reduce their contractual entitlements. What would we say about any employer who used such an imbalance of power to such an effect?
Well we should all know because we are the employers here. The government is merely our agent. For many fellow citizens this will be a ‘no-brainer’. We can’t afford it, we don’t want to pay it so we change the law and, hey-presto, problem solved. But doesn’t it set a worrying precedent? To allow the dominant party to alter, without consent, the terms of a contract because it no longer suits them to honour it?
I sometimes wonder if the most aggressive pursuers of all sorts of expedient changes in the law to tackle the lazy, overpaid and feather-bedded public servant have really thought it through.
One of my favourite pieces of political drama, after the Godfather (you should hear my Day of my daughter’s wedding speech), is A Man for All Seasons. This exchange on the law between Sir Thomas Moore and his putative son-in-law is relevant,
Roper: Now you give the Devil benefit of law!
Moore: Yes, what would you do? Cut a road through the law to get after the Devil?
Roper: Yes. I’d cut down every law in England to do that.
Moore: And when the last law was down, and the Devil turned on you where would you hide, Roper, the laws all being flat? This country is planted with laws from coast to coast. Man’s laws, not God’s, and if you cut them down – and you’re just the man to do it – do you really think you could stand upright in the wind that would blow then?
Moore: I give the Devil benefit of law for my own safety’s sake.
As I enter a new stage in my working life I am not at all sure I like the idea that employers can act in this way.
The Interim Report also had an interesting nugget that has not had too much of an airing yet. It says:
Ex.21 Evidence to the Commission has also made it clear that current pension structures, combined with the requirement to provide comparable pensions (‘Fair Deal’), are a barrier to non-public service providers, potentially reducing the efficiencies and innovation in public service delivery that could be achieved.
Public servants facing a transfer to a private sector employer will fret about what this means. It will be interesting to see how this is dealt with in the final report’s proposals.
The principles in the report and its immediate proposals for increasing pension scheme members’ contributions are not that contentious. But any increases in contribution will hit many lower paid public servants hard particularly in the context of a on-going pay-freeze.
I could well-understand my civil service friends reporting that they had never felt so assailed on all sides. They told me they were doing what almost everyone I know in public service is doing. Cutting their own spending. That’s clearly not good news for the private sector wanting to sell us goods and services.
But the pall of gloom settling over us in public service feels unrelenting. We’re worried. Our clients are worried. Everyone is worried. And the party conferences have done little to raise the mood.
Will there ever be another glad, confident morning in our working lives?
Hard to see it at the minute. So see if this cheers you up.
A shepherd decides to save effort by teaching his dog to count the sheep. On the first morning he sets the dog loose and it hurtles around the field in and out of the sheep driving them into the pen. After five minutes or so it trots back to the shepherd.
“How many this morning, lad?”
“That’s odd there were 37 yesterday.”
“Woof. I know. I rounded up.”