Date: 4 March 2010
Taxpayers' Alliance gets its sums wrong on local government pensions again
UNISON has accused the Taxpayers' Alliance of deliberately manipulating
figures to suit their claims that local government pensions face
a black hole*.
The TA, a tax-cutting pressure group, in comparing liabilities
to assets, is deliberately making a ridiculous assumption that
everyone will retire at once, tomorrow.
The local government pension scheme is affordable and sustainable
and its income exceeded expenditure by almost £6 billion in the
Dave Watson (UNISON Scottish organiser), said: "The so-called
Taxpayers' Alliance deliberately distorts the true picture to
suit their claims and their tax cutting aims. Their claims are
based on the nonsensical supposition that everyone is going to
retire at once, tomorrow. Neither do these pensions cost £1 of
every £5 of council tax, because council tax makes up only a small
percentage of funding.
"Local government pensions are affordable and sustainable. A
new scheme has recently been agreed that increases staff contributions.
They are funded by employers, employees and by investment income.
The LGPS generates one-third of its own income, and contributions
from employers in Scotland are going down.
"Remember, too, that we are not talking about gold-plated pensions,
here. Local government workers like classroom assistants, home
carers, social workers, refuse collectors, and dinner ladies,
contribute all their working lives to gain a pension that averages
just £3,800 pa, yet the Taxpayer's Alliance, would apparently
prefer them to have that pension cut and force them to rely on
state benefits. What we need is some perspective here and a move
away from a race to the bottom on pensions.
"The real pensions scandal in this country is that the majority
of company directors can retire at 60, with a final salary pension
25 times higher than the national average which they accrue twice
as fast as both their workforce and the public sector workforce.
They then campaign for low paid public service workers to take
a pension cut.
"The so-called 'Taxpayers Alliance' would be better employed
directing their firepower at the real gold-plated pensioners.
Big business bosses who award themselves generous pensions while
closing decent schemes for their staff. But they won't of course,
because this would be biting the hand that feeds them".
* Council pensions report by the Taxpayers' Alliance
Note for editors:
THE FACTS ABOUT THE LOCAL GOVERNMENT PENSION SCHEME:
1. It is funded by employer contributions, employee contributions
and investment income.
2. It is cash positive - member benefits paid out in 2008-2009
were £5.6 billion against gross income of £10.2 billion.
3. The total value of combined assets in England, Wales, Scotland
and NI was £143 billion (in 2008).
4. That's 5 times greater than the largest single pension fund
in the UK.
5. Total assets of the 89 LGPS funds are equivalent to 10% of
6. 60% of the fund is invested in equities or shares - in UK
and global stock markets.
7. By 2008, more than £1 billion was invested in each of the
top four FTSE companies and it owned 1.3% of seven of the top
nine companies in the UK.
8. £4.7 billion invested in the big four banks - Barclays, HBOS,
HSBC, RBS and
9. £2.3 billion in the 49 largest companies delivering UK public
services in local government, the NHS and the utilities.