Pensions crisis? What pensions crisis? asks KEN HOUSTON

At first glance this seems the most reasonable reaction to the latest annual survey from the Office of National Statistics, which revealed that total membership of occupational pension schemes in the UK was 33.5 million in 2015, the highest level recorded and representing an increase of 10 per cent on 2014.

This rise is mostly down to the growth of compulsory auto-enrolment, which requires a legal minimum contribution of 1 per cent of salary from both the employee and employer although the minimum will rise to a total of 5pc in 2018 and then 8 pc in 2019.

So what’s not to like?

On the face of it, nothing. But The Times, to its credit, dug somewhat deeper into the statistics and made a discovery that exemplifies how the difference between public and private sector pensions is as deep and wide as the Grand Canyon.

Apparently State employers (funded by the taxpayer) can pay up to seven times into an individual employee’s pension fund compared to the private sector – the relevant figures being 2.5pc (private) and 17pc (public).

Yet three months ago it was reported that the liability of final salary retirement schemes for NHS staff, police, teachers and other State workers rose by £190 billion to £1.5 trillion in the 12 months to the end of March last year.

Although a few public sector schemes are self-funded, most are not meaning that the money to pay these pensions has to come out of general taxation.

The government has recently made moves to cut this deficit by re-arranging schemes so that pensions are based not on final salary but on the average salary over the course of a career.

Well, it’s better than nothing but the administration has so far not dared to tackle the issue of underwriting public sector schemes with huge deficits – and having the courage to come out and declare that at a time of increasing longevity (and, consequently, pay-outs) guaranteed final salary pensions, at least for new employees, have had their day.

Some large private-employer final salary schemes also have worrying deficits but the time is not far off when these will surely have to be dealt with –  unlike the public sector where the subsidy from the Treasury keeps putting off the ‘evil day’ year in, year out.

In an ideal world government would adopt the changes that have already taken place in the private sector. But with five and a half million people in State-related pension schemes this is probably the biggest political hot potato of them all.

And, to be fair, not everyone who works for the local council or the NHS is a ‘fat cat’. Unskilled manual workers in the public sector tend to earn relatively low wages so any equitable reform might exclude these employees, at least for a certain period – and kick off with middle- to higher-earners. In theory, of course, it should be possible for any department of government to operate a final salary pension scheme that is ‘fully-funded’ from contributions but the cost to individual employees to guarantee this would make it a non-starter.

Still, don’t expect reform any time soon. Just last month it became widely known that the Bank of England had made contributions equating to a massive 50pc of salary into the pensions of some employees, including the governor Mark Carney.

The former pensions ‘tsar’, Ros Altmann, noted with some irony that while Bank employees received lavish pension fund contributions underwritten by the taxpayer, the value of private sector pension funds was being driven down by Carney’s policy of ‘quantitative easing’.



How much money have successive Scottish governments, over the past 18 years, spent on various campaigns extolling the public to lead healthier lifestyles? Tens of millions, I would guess, when one adds up staff time, agency fees and various production costs.

Typical efforts are television advertisements which suggest simple lifestyle changes like taking the kids to the park more often or making walking a bigger part of the daily office commute.

But as the most recent MSP expenses statistics revealed, this is another political case of ‘do as I say, not as I do’.

Among the claims made by our parliamentarians were 300 for taxi journeys between Waverley Station and the Scottish parliament. This was of particular personal interest because I worked at The Scotsman when the office was moved from North Bridge (next to Waverley) to Holyrood.

The journey between each location on foot takes approximately 10 to 12 minutes, with the route from Holyrood back to town involving an incline and thus presenting an additional physical challenge.

So rather than spend taxpayers’ money on a gas-guzzling cab, making this trip on foot over five days would have given our MSPs a valuable two-hour workout while following the advice they are so keen to give to others.

As for other claims, it is not so much the big-ticket items that makes one despair but the petty, penny-pinching – e.g. someone claimed 78p for a set of bin liners, another £1 for a bottle of bleach. Do these people have no shame?

It could be argued that a journalist is the last person to criticise given the profession’s reputation for creativity with expenses claims.  The difference is that newspaper or periodical publishers are private or corporate companies whose money has to be earned and not simply taken from taxes. Normal fiscal rules apply so that, historically, there has always been a periodical ‘purge’ to ensure that expenses costs do not get out of control.

Not so at the Holyrood Hilton, where £12.77m was handed out in expenses, an increase of 2.18 per cent on the previous year.

A spokesman has said that MSP expenses were in line with inflation once costs related to election winding-up by departing members was taken into account.

Winding-up costs are, of course, another controversial…..erm no, on second thoughts…..better not get started on that one.






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