UNISON response to council pensions report
Jan 2012 25

UNISON response to council pensions report6

Today we have released a report on council pension contributions, you can read it in full here. We found that council employer pension contributions were equivalent to £1 in every £5 of council tax receipts in 2010-11.

UNISON issued a lazy response to this earlier, strewn with factual errors. They claim that:

Actually, the local government pension scheme costs the taxpayer just 5p in every £1 paid in council tax.

No, it really doesn’t. What UNISON seems to have done is calculate employer pensions contributions as a share of total council income. The response is so bad, that they even go on to explain their own miscalculation in the next line:

Councils get only 25% of their revenue from council tax, 75% comes from other sources, including business rates and local government grants.

Yes, councils get their revenue mainly from central government (that is still taxpayers’ money of course). But employer contributions are equivalent to a fifth of the revenue they receive in Council Tax.  If employer contributions were reduced by ten per cent, local authorities could afford a two per cent cut in council tax rates. This is all just simple maths.

Then they wheeled out this tired old line:

When dinner ladies, social workers and care staff retire, on average they will get just £4,000 a year, dropping to just £2,600 for women.

I wrote about this nonsense in a blog in November, when public sector workers were out on strike. But to repeat: if someone works for a council for a year, their pension pot will be small.  But they’ll have worked in other places for years and can accrue other pension entitlements while they’re there. That average is meaningless and a dishonest attempt to mislead the public about the value of public sector pensions. Those who spend their career in the public sector do very well out of their pension schemes.

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  • Anonymous

    So what is the average number of years that they have worked for the councils?

    It’s an easy repost them. 4,000 a year, for 2 years work … [Replace with the actual figure]

  • Blarg1987

    Be interesting to note what percentage of overall income private companies have to pay in to their pension schemes I know for some it is in excess of 10%.

    But also if your employer contributions were cut by 10% how much cheaper would the goods and services be that your funder provides? I do hope you will lead by example on this point :) .

    • Anonymous

      Personally, I’m not a member of any scheme. I’ve decided to organize  my retirement in other ways. 

      At some point, I’ll top up the state pension contributions to get 30 years, but no more. 

      The reason is that for a median wage earner, its a really awful deal. 

      http://www.lordsoftheblag.net/2012/01/state-pension-rip-off.html  If you want to check the calculations. 

      So to answer your question, there would be no change, since I get no contributions. 

  • Stickler

    Would someone please explain to me why “dinner ladies” are constantly referred to in politically charged utterances emanating from unions and politicians ? 

  • foolsgold gordo

    The fact remains that since Gordo started robbing the pension funds in 2001, it hasn’t been worth paying in to a pension.  Everybody, including public sector staff should stop bothering about pensions as it is all being stolen off them.  Best just to forget about pensions because if you look at the real situation, you can save more in an ISA than any of these pension funds.  It is all obvious but we still keep banging on about how much it is costing and when you keep putting money in and there is less money in the pot at the end of the year than when you started, it’s time to pack it in.  Just bloody stop going on about it.

    • Anonymous

      Correct. 

      There is no cash. Government hasn’t admitted to the real scale of its debts.

      So there will come around a time when its desperate. It will look around to see where the money is. There are two places. 

      1. Pensions
      2. Property. 

      Pensions will be confiscated, with some sop about ‘for the public good’. Or that ‘the city isn’t managing the money properly’. [Implication we can do better]

      Property likewise because you can’t move it. 

      The public sector has nothing to steal. It has to rely on other people allowing their money to be stolen.

      ISAs are slightly better, in that you could get your money out if you are getting worried, you can’t with a pension.

      However, ISAs as they stand still aren’t as good as a self select SIPP. 

      However, the risk of confiscation is too high.