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Page last updated at 17:54 GMT, Friday, 21 May 2004 18:54 UK

Have your say: Public sector pensions

Rail workers
Network Rail has made a similar decision to many other companies

Members of the RMT union have voted for action over a number of issues, not least because they are angry at Network Rail's decision to close its final salary scheme to new members.

The scheme was introduced when it was a publicly owned organisation. Most of the remaining public sector, of course, still provides generous pensions related to pay.

But actuaries have now warned that the pensions we promise to teachers, doctors, fire fighters, and civil servants are not sustainable.

Given that many companies are closing good final salary pension schemes, can public sector workers expect better treatment? We asked for your comments, a selection of which are below. The debate is now closed.

Local government pensions are, and have always been, contributory pensions.

When high returns were made on interest some authorities gave themselves pension holidays from their share of the contribution.

Worse, in the time of the Thatcher years, they gave enhanced pensions from the fund when making many people take early retirement with extra payments for the higher paid.

Around the same time the laws were changed to make it possible for new entries, thus depriving the existing fund of future income.

Most LG employees receive less salary than private sector workers. The LG Pension is in effect deferred pay.
David Morris

I cannot agree with the RMT and their members. I am a taxpayer, I have to cope with ever increasing rail fares, and have the right to expect a reliable rail service.

I call on Network Rail, if and where possible to attract contractors from East Asia
Marcus Meyer

I therefore call on Network Rail, if and where possible to attract contractors from East Asia.

China, with its abundance of workers, builds one skyscraper after the other and modernises its railway network, I am sure they can do the job here too, and I bet they are cheaper.
Marcus Meyer

It always seems to be that the lower paid workers in an industry have their pay and conditions cut whilst the higher managers are paid more in terms of salary, bonuses, and pensions contributions.

Pension funds are under pressure to increase the rights of "dependents", many of whom will have generous pensions themselves.

Isn't it lovely to have a government which is so keen to address the rich poor divide!
Colin Grundy

I work for the NHS. The NHS pension is apparently very good. It was one of the benefits of joining the organisation.

If the pension scheme was not as good, it would worsen the problem of recruitment and retention
Vincent Potter

If the pension scheme was not as good, it would only serve to worsen the awful problem of recruitment and retention in the NHS.

If we pay public service workers so little, and expect them to work so hard, we should give them something in return.
Vincent Potter

Public sector workers have no right to expect other people to fund their extremely generous pension schemes.

People now live longer, so final salary pension schemes cost too much and it is time the public sector got used to it and stopped whining.

Everybody knows that one of the main reasons for the ridiculous increases in council tax in recent years has been the spiralling cost of local authority pension schemes.

It is wrong to expect the rest of us to support such generosity

It is totally unsatisfactory for one part of the community that has lost out on pensions to cross-subsidise the public sector with their generous final salary schemes.

It is wrong to expect the rest of us to support such generosity.

Alternatively, the government should provide us all with generous pensions.

Where does David Morris get the idea local government workers are less well-paid than other workers?

In the papers local government offices have the biggest adverts, the most jobs, and are paid good basic salaries; and that does not include the generous benefits.

If local government employees are so disgruntled they could get out, let others have a chance of a secure job, and go into the real world where salaries and perks have to be earned.

Personally I would go on a march to counter their self-interest.

I have been a civil servant for more than half my life, and have always known our pension is very good compared to others.

Now I am in my mid-30s, and with everything that has been in the news about pensions recently, I am realising how valuable a good pension is.

We were constantly told that our pay may be low, but at least we have good pensions
John Snow

During the late 80s when civil servants in my department were striking over low pay, we were constantly told that our pay may be low, but at least we have good pensions.

To someone in his early 20s this did not mean much to me, but now I realise the advice was quite sound. Someone above mentioned that the our pension could be seen as 'deferred pay', and that is certainly how I look at it.

Another thing we were told when complaining about our pay was: "If you think you can get paid more in the private sector, then go to the private sector."

So, to reverse this logic: If anyone working in the private sector thinks our pensions are unfairly better than theirs, no-one is forcing you to work in your company. Join the civil service!
John Snow

"Pension holidays" referred to earlier, are normally forced on a pension fund by a Revenue limit, when a fund has more assets then it needs to meet its liabilities.

Given that the employer is expected to make up fund shortfalls, they should also be able to choose how to use any surplus.

In the past, when my employer's pension fund was under funded, my employer made extra contributions.

Then in the 90s it had a surplus, which was used to reduce its contributions and fund early retirements, as well as reducing employee contributions from 6% to 5% for several years, and giving pensioners above inflation increases.

The Revenue limit on the size of a pension fund should be raised
Paul Brackenbury

Then again, last year the fund was under funded again, with my employer making an extra contribution.

The Revenue limit on the size of a pension fund should be raised, to stop funds flip-flopping between being under funded and over funded.

The over funding occurs when the economy is doing well and the under funding when the economy is not doing well. So a company ends up having to put extra money into its fund when it can least afford to.

Also pension funds can no longer reclaim the 20% tax on dividends. This is costing pensions funds about 6bn a year. Since 1997 the government has taken 40bn out of pension funds.

With this, and the insurance levy pension funds will have to start paying next year, is it any wonder final salary schemes are closing?
Paul Brackenbury

Pensioners are having to pay higher rates, in effect subsidising these workers' pensions
Chris Glasow
Rates should be independent of pensions and should be allowed to rise or fall on the ability of the local council to invest wisely, just as our pensions are.

Unfortunately, a good proportion of local government rate rises are to plug the pensions gap. This means that pensioners are having to pay higher rates, in effect subsidising these workers' pensions.
Chris Glasow

The comments we publish are not necessarily the views of the BBC but will reflect the balance of views we have received. It is helpful if contributors state if they work for any organisation relevant to an issue discussed. Readers should form their own views on whether messages published represent undeclared interests, or views prompted by a common source.

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