Of pension pots and piss-takers
The main driver for this "super-strike" is that the government has pointed out that the gold-plated, defined-benefit, public sector pensions are utterly unaffordable and intends to change the terms of the deal. Finally.
Not that they are intending to switch away from defined-benefit pensions—oh no! What they are proposing is that public sector workers pay in an extra 3% of their salary towards their absurdly generous retirement salaries. And this is, apparently, a problem.
One thing to note is that the private sector, both employers and employees, are being forced to contribute an extra 8% minimum towards their derisory state pension schemes—making the public sector's 3% increase for their defined-beneft schemes look, frankly, pathetically paltry.
But listen to any public sector worker whinge and you'd think that every third one of them was being sent to a gulag, not being asked to pay a fraction closer to what they should be. You can see these parasitical fools commenting on blogs (as well as hear them in person), saying things like this...
"But we already pay, like, 9% of our salaries towards our pension. We're just asking to get what we've paid for."
Really? OK, let's have a look at some facts, shall we?
A nurse retiring on a salary of £34,200 after 40 years would receive a pension of £22,800. To obtain that level of income from a private sector pension at current annuity rates, a worker would need to amass a pension pot of £600,000, the Treasury said.
According to pensions experts at Hargreaves Lansdown, a private sector worker on the same income who saved the average of 9 per cent of salary into a pension over a career might build a pension pot of £258,000.
They estimated that to save £500,000 into a private pension, a worker would need to start by setting aside £600 a month from the age of 23. Someone who earns £40,000 and puts aside 9 per cent into a workplace pension is only saving £300 a month.
So, here's a message to public sector workers—I am happy for you to receive what you have paid for. And that is a pension pot of rather less than £250,000. And when you retire, you can take that pension pot and invest it in an annuity pension, as the rest of us are forced to do (by law).
And the earlier you retire—and we all know that public sector workers have a tendency to retire rather earlier than everyone else. Presumably because of the stress associated with filing forms in triplicate—the less your pension income will be.
That is what the rest of us have to do. And, as you say, you only want what you've paid for.
Oh, wait—you don't want that?
Oh right! You don't actually want what you paid for? Oh yes, you want what you were promised—even though it was patently unaffordable?
As Carpsio says...
Is all this tax necessary? Well that depends on your political stance. Some would argue that it isn’t enough, others that it is too much. You can ignore the latter, because they’re borderline communists, but the fact is that I don’t have a say in the matter – it just is. Certainly there’s no-one pressing the case for lower taxes that I can vote for. And now we owe the world about £14 squazillion we’re not going to turn into the Cayman Islands anytime soon. We’ve moved barely an iota from the age in which you’d pay your tithe to the Lord of the Manor regardless of how rotten your turnip harvest had been or how many of your kids had pegged it with tubercolosis.
But among the ways in which it is spent are on the pensions of public sector workers. Do I wish them a ruinous old age of poverty and want? Of course not. Do I think that every one of them is a worthless mouth or an unproductive presence on the planet? Equally no. Do I think that I should not only foot the bill for their wages, but for a retirement that is way beyond my own means to afford as well? Thrice no. As Samuel L Jackson might put it: “fuck that shit”.
So go ahead and strike—see if anyone gives a crap. In the meantime, I hope that you have many more strikes and lose many, many days of your wages.
And in the meantime, we will be working out the best way to stop your union bosses stealing yet another £113 million of our cash in order to organise you—and to pay their fat salaries.
So, with all due respect (very little), fuck you all.
UPDATE: as a number of commenters have pointed out, the Telegraph have done their figures wrong. The nurse could only receive a maximum pension of half her salary—roughly £17,000.
The general point still stands, however, since the Guardian's rather detailed calculator estimates that in order to reach the desired amount of 50% of salary—assuming 40 years of contributions, 20 years to live after retirement, a 7% return, and 4% inflation—the nurse would have to pay £485 per month, every month, from the age of 20.
Even on £34,000, £485 per month (from a take-home salary of £2,123) represents a contribution of nearly 23% per month—rather higher than the standard 9%–12.5% paid by public sector workers.
UPDATE 2: this little calculator (with some pretty graphics), estimates that our nurse would have to pay in 14.7% of her income—some £416.50 per month—in order to reach £17,000 per year retirement income (assuming no lump sum, of course).
If she wanted the maximum 25% lump sum of roughly £93k, and have a pension income of £17,000, those contributions would need to rise to £462.97 (16.34% of £34,000).
I stress, again, that these payments need to be every month—whether the nurse is earning £20,000 at 20 or £34,000 at 60. So, whilst £416.50 is only 14.7% of £34,000, it is more like 25% of £20,000.
UPDATE 3: I loved this quote from GrahamO at the Tritalk Forum...
What genuinely makes me sick is when people who are protected from the consequences of their own incompetence, inefficiency and stupidity try to blame private companies for not paying enough. Only public sector morons do this as they are used to a world of money growing on trees called the private sector, and they have never been affected until now, by the realities of the economics of the world.