Welfare Reform on the Web (December 2008): Pensions - UK

17,000 public workers retire with a '£1 million pension pot'

J. Kirkup

Daily Telegraph, Nov. 3rd 2008, p. 1 + 6

Using Freedom of Information Act requests, the Taxpayers' Alliance has calculated that at least 17,150 retired public sector employees are in receipt of generous pensions of at least £33,000 per year, courtesy of the state. A private sector worker wanting to ensure a similar retirement income would have to build a pension fund worth £1m.

The effects of age and income on retirement decisions: a comparative analysis between Italy and the UK

O. Gough, R. Adami and J. Waters

Pensions: An International Journal, Vol. 13, 2008, p. 167 - 175

This article uses data from two nationwide surveys to examine retirement decisions in Italy and the UK over the ten years 1992 to 2002. The Italian pension system is based on state pensions, in contrast to the UK. Interestingly, the researchers found that there are considerable differences between the way people from the two countries behaved.

Mothers get their pensions back

G. Tibbetts

Daily Telegraph, Oct. 24th 2008, p. 2

An amendment to the Pensions Bill will give women the option of topping up their state pensions by allowing them to buy six years more pension than they are currently allowed using voluntary national insurance contributions. These voluntary contributions will cover periods out of the labour market when women look after children or elderly relatives.

Pensions fall deeper into debt

E. Kelleher and N. Cohen

Financial Times, Nov. 11th 2008, p. 2

The latest monthly update from the Pensions Protection Fund (the PPF 7800 Index) shows final salary pension schemes have gone deeper into debt over the last few weeks as share prices have fallen. The total shortfall of the 6,468 schemes in deficit was £122.1bn in October, up from £113.5bn in September and £36.9bn a year before.

Place in the sun?

N. Cleal

Public Finance, Oct. 31st-Nov. 6th 2008, p. 18-21

It is being widely argued that public sector final salary pension schemes are over-generous compared to the private sector, and that they will become unaffordable. Even funded local government schemes are finding it difficult to meet liabilities in the face of population ageing and falling stock market returns. It is suggested that the public sector should copy business in offering cheaper defined contribution schemes, especially as public sector pay has become competitive against the private sector.

The struggle to end 'pensions apartheid'

N. Timmins

Financial Times, Nov. 27th 2008, p. 3

This article looks at the differences between private sector and public sector pensions in the UK. It provides analysis of final salary pensions in local government, the NHS, for teachers, the civil service, armed forces and police and uses figures from the Institute of Economic Affairs to examine the growth in public sector pension liabilities, which could make the current system unsustainable.

(See also The Independent, Nov. 28th 2008, p. 10)

Unions alarmed by review of pension protection rule

N. Timmins & N. Cohen

Financial Times, Nov. 13th 2008, p. 2

The TUC is concerned about government plans to review Section 75 of the 2004 Pensions Act, which requires an employer who sheds a division with pension liabilities to put sufficient money into the scheme to enable an insurance company to take over the promised retirement benefits.