Many justify attacks on public sector pensions by the decline in the number and quality of private sector defined benefit pension schemes.
Around 85% of public sector employees are members of an employer-sponsored pension scheme, most of whom have a Defined Benefit scheme (i.e. Classic). However, in the private sector 40% of employees are members of an employer-sponsored pension scheme but only 15% of employees are active members of a Defined Benefit scheme. Private sector employees have been hit hard by the employer retreat from good pensions. This retreat, though, does not justify punishing public sector workers.
Public sector pensions support lower-paid members of the workforce. Well-paid private sector employees are likely to get a decent pension on top of their pay. The real difference between public and private sectors is among the low and average paid. The attack on public sector pensions may be wrapped up in rhetoric about fat-cat public servants, but it is really an attack on the low paid in the public sector. Only 20% of private sector employees who earn between £100 and £200 a week are members of an employer-sponsored pension scheme whereas 70% of public sector employees in the same pay range are pension scheme members.
Even if the public sector schemes were scraped this would not benefit those in the private sector who are not members of a scheme or who were in a poor scheme. What is needed is a levelling up of pension provisions – now there’s a thought.