There's a great quote in the latest TPA 'research' on council pensions. The report says "it is possible for certain council employees to retire at age 55 and immediately draw on a pension as if they had retired at age 60". But it goes on to claim that "this level of generosity would be almost unimaginable in the private sector".
Er... Fred Goodwin? That didn't take much imagining did it? And it's actually... err... MORE generous (unreduced at 50). Perhaps the TPA should go and check out the RBS remuneration committee report to get a clearer idea of exactly how private sector DB schemes work. And RBS is hardly alone. It actually demonstrates how little the TPA know about pensions (except that public sector workers shouldn't be able to have decent ones) that they come out with this type of guff.
I don't care tired of saying this so here we go again. Public sector DB pension provision is not overly generous - it is comparable to what private sector workers could expect until a few years ago. And lots of private sector schemes (like RBS) would have similar discretion to provide an unreduced pension early. The problem is that private sector provision has been weakened, public sector provision has not got more generous. Therefore anyone genuinely interested in pensions policy ought to be focusing attention there primarily. All the TPA advocate is mindless levelling down.
2 comments:
Hi Tom
Well spotted - these people are talking serious rubbish. You can only get a Council (LGPS) pension at 55 if you are made redundant (not 50 as with Fred who famously wasn’t of course dismissed) or medically retired.
I have been “tupe” out of a local authority and have kept my Council pension plan. The cost to my new employer of LGPS membership is 13.8% of my salary. If I was to stop my council pension and join the employer’s stakeholder scheme it would cost them 16% of my salary and even more to pay for company life assurance and PHI. So a decent DB pension’s scheme is even cheaper for the employer than a decent DC scheme.
The LGPS saves council tax payers money!
Hi John
Yeah, I was going to add that this is only a discretion (would be interesting to see how often it actually gets used). The TPA aren't very interested in accuracy though.
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