Editor's comment

21st January 2011 at 00:00

The mantra used to be "education, education, education". In these times which are becoming a byword for capricious decision-making, the new cri de coeur should be another set of 3Es - "evidence, evidence, evidence". Nowhere is the need more self-evident than in the field of pension reform (p1). For any government to push through increases in pension contributions for public sector employees, including teachers, before the outcome of the review which it set up, before any valuation of how the various schemes are working and before any negotiation with the unions has taken place smacks of the worst kind of political chicanery. It is scandalous.

The Westminster Government may argue it is phasing in the changes over three years and that the lowest paid will be protected. But this misses the point, which is not just that there is no evidence for the abrupt changes: there is actually evidence to the contrary. The National Audit Office has indicated that the public sector pension schemes are already yielding 14 per cent in savings on the basis of reforms already made. The changes to the Scottish teachers' scheme set the normal pension age for new entrants at 65, raised the employees' contribution rate to 6.4 per cent and capped the employers' contribution at 14 per cent.

Teachers now face the bleak prospect of a two-year pay freeze, a significant hike in their pension contributions, a lower uprating of pensions due to changes in the price index and rising inflation. The freeze on salaries is itself a freeze on pension contributions, which will add to scheme liabilities. And all for what? As with much else, public services are paying the price for a mess created in the private sector. This is not about the need for reforming public pensions: it is about the need to bring them into line with occupational schemes which have been woefully mismanaged over the years.

Neil Munro, editor of the year (business and professional magazine) 2009.

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