Public Sector Pensions

Well what a week that was.

The strike on Wednesday was certainly disruptive, essentially to our children’s education and to poor souls who had, probably long awaited, operations cancelled.

The Union demands are of course ridiculous. Public Sector Pensions and the benefits promised belong to a bygone age where people retired at 60 and lived 10 more years if they were lucky. Longevity has increased by 7 years in the last 20 and what a problem that has created.

Be clear, no Public Sector employee retiring in the next 10 years will suffer any reduction in their pension. Further, all benefits accrued to date will be honoured. It is about future accrual and the fact that these “schemes” are unfunded, simply today’s contributions and Private Sector taxes meeting the pensions in payment.

The irony is that if, just supposing, the Unions manage to preserve the current scheme rules, their pensions are lost anyway – to inflation. The only way to meet the already estimated £1.5 Trillion shortfall is to print the pound into hyper-inflationary oblivion, taking the rest of us with them.

Hobson’s choice for the Public Sector, no choice at all for the rest of us.