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The differences between the public and private sectors have always been portrayed as a big deal. The private sector operating to the harsh commercial realities of the free market; the public in a cosseted tax-payers’ vacuum. The recent spending review and subsequently proposed cuts have seemingly brought this into greater conflict as the private wrings its hands in glee, anticipating that the public is going to get its long-overdue comeuppance and be dragged kicking and screaming into the bright dawning of today’s economic reality.

Nowhere is this dichotomy felt more than in the provision of our pensions and the gold-plated pensions of public sector workers have come to be viewed as symptomatic of wasteful and self-serving profligacy. The more I look into this touchy subject the more complex the issues become and can it really be seen in such a simplistic public vs private manner?

There’s no denying that public sector pensions cost the country a lot of dosh, an awful lot. With more than 12 million retired workers to look after, the Government paid out a total of £32bn in 2009, equivalent to £600 per taxpayer and exactly half of the entire pension pot. Ouch. And looking to the future with its higher salaries and longer lives, this ain’t going to get smaller. The cruellest blow and double whammy is that current predictions indicate both the tax-paying working population and the economy’s GDP is falling. Ouch. Again.

In the past decade the private sector has closed or shrunk its pension schemes dramatically, resulting in a 10% fall to only 35% of employees participating in such a scheme. In the public sector it’s remained constant at 85%. And unlike the latter, which are invariably linked to a worker’s final salary (whatever the economic temperature), the private sector schemes are predominantly comprised ‘defined contributions’ which pay out according to the performance of worldwide stock markets. Uh oh. Hardly rock-solid.

To add further insult to injury, public sector employees actually contribute less of what they earn in order to get them. According to the Office of National Statistics, private sector workers lucky enough to be in a similar ‘final-wage’ scheme contribute upwards of 18% whereas civil servants pay 3%. Every year thousands of NHS managers retire on pensions of £70,000+ but the similarly placed private employee will have had to have saved a pension pot of £2m – 66 times the size of the average private sector pension. Do the match.

So the only way out is to cut the payout rates, increase the contributions necessary, link the returns to the broader based economy, place restraints over initial qualification in the first place and latterly age constraints over when to claim. But, whoa, just before we ride roughshod over promises made at the beginning of someone’s employ, renege on cast-iron T&Cs and rip up the rule book we need to remember that all public sector pensions are not the same and we can’t tar everyone with the same brush. Half of them pay out less than £5600 a year and the average local government pension is worth just £3,048 (hardly a king’s ransom). Retired teachers average £10,000 and police officers £15,000. I, for one, don’t begrudge any of these guys a single penny of it and the value to society can, in certain circumstances, be immeasurable. No, my beef is with the fat-cats, monarchs, bureaucrats, and oligarchs of the system, those at the top of the tree, whose salaries and working benefits have more than compensated them for their ‘years of service’. Can they really value their contribution as twenty times greater than that of a nurse or a mid-wife?

The bad news for many public sector employees though is that the times they are a changing, whether or not they’re happy about it. According to Lord Hutton , an increase of 1% in contributions would add £1bn a year to coffers, so expect a couple. Also, you can forget retiring at 60 as it ain’t going to happen. And whilst we’re there, wave bye-bye to the final salary pension as this is going to be replaced by a combination of ‘average earnings’ scheme which will be notionally tied into a combination of guaranteed and variable returns. Sorry, but they’re all coming to a pension scheme close to you over the next couple of years. But do you know what the real scandal is? The real scandal is the decline of private pension provision and no amount of cutting public sector pensions will fix that.