Mis-information was developed as an art during World War II and appears to have been re-found by the Government, or become more blatant.
It is certainly being used in the campaign against Public Sector Pensions, particularly NHS and Teachers, who are damned if they strike to get their voice heard and damned if they don’t.
I was extremely annoyed a week ago to read the gross distortion of facts, given with the announcement of the new pension rates. This was carried by most of the media in an almost similar form and appeared to be a press release by the Ministry, being as close to the truth as the hacking scandal.
A nurse earning £30,000 a year was stated to build up an” enviable pension fund of £500,000”, denied to the ordinary worker, who would be lucky to get anything. The State publishes no accounts for these schemes, mandatory for private schemes, therefore facts are hard to come by, but one can dig and search.
GAD reports of 2006 and 2008 give NHS average salary at £23,600 and average pension at £5,400, less than 25% of salary; at a 4% annuity this would need a pension pot of £140,000 and at 6% only £90,000.
The 2008 Blue book shows total Public Sector contributions as:-
Employers - £7.853; Employees - £6.687; Imputed Social - £5.119; Total - £19.659 billion
Giving average Employer contributions at 7.3%, Employee at 6.5% and Social (SERPS) at 5.1%.
A nurse on £23,600 would pay contributions of £1,534, give up her right to State second pension for £1,200 and receive Employer contributions of £1,723 over 40 years for a pension little better than the State basic pension and which even with this fails to reach the 50% promised. Teachers, Police and Fire are similar
Any other worker making total contributions of £4,460 per year into an investment fund, from latest Moneyfact figures for savings of £1,000 per year over 10 years, (some 7% growth), would over 40 years build up the £500,000 fund stated. Buying an annuity at 4% would give them a pension income of £20,000 and at 6% some £30.000 per year, inflation proofed in real terms. Four times the actual. Who should be so lucky !
GAD 2008 shows NHS contributions of Employers at £5.3bn, which wrongly includes SERPS refund, indicating total contributions of £8.1bn and shows Pensions paid at £4.5bn, giving a surplus of £3.6bn taken by the Treasury to subsidise the Civil Service, (paying until recently 1.5%), Armed Forces nil and MP’s, Judges and others not known , but all presumable nil contributions.
The State runs Public Sector (and State) on an unfunded “pay as you go” basis in which the contributions are spent the same month to pay someone else’s pension, whether they contribute or not!
Any Company or individual doing this would be criminally prosecuted for mis-use of funds, even fraud, heavily fined and jailed and struck off or barred. This is clearly illegal and the law should be obeyed even by the State.
I do not deny concessions to the Armed Forces, but they and subsidised others should be outside the overall scheme, as internal Department or State costs. The NHS, Teachers, Police and Fire are hard working and pay good contributions and receive a poor pension return which would not be accepted in a private scheme. It is now proposed to increase their contribution by up to 3%, giving even less return! It is they who are cheated by the State.
The NHS could readily transfer to a funded scheme away from the State, even if they paid existing pensions, the annual surplus of £3.6bn would rapidly build up to a fund of some £50bn in ten years and £250 to £300bn over forty years, with potential investment income of initially £3bn up to £18bn per year..
Members would be three to four times better off and free of future uncertainties of increased longevity in old age. Funds could be invested in hospitals (buy back PFI), Hospice and care homes and give a good income return. If the State took over responsibility for the existing pensioners, then all four schemes could cope with the transition and even meet future new pensioner demands.
I am retired with no interest other than hard working relatives in the Police, NHS and Teaching.
The State needs to take a positive approach on PS pensions not denigrate the hard working and hard done by members , separate out the subsidised members and repay the many years of mis-use of funds. Pigs might fly!
Savings Annuities Public Sector NHS Teachers Police Local Government Hutton State
No comments:
Post a Comment