Telegraph.
Millions of employees who are not saving for their retirement will be enrolled in company schemes under a radical shake-up of pensions which eventually could see most people working into their seventies.
In a landmark announcement intended to herald a new era of shorter but wealthier retirements, the Government will encourage people to work for longer by making it illegal for companies to force staff to give up work at 65.
Now this is an area in which I'd like to see the pen pushers of the public services lead the way, not those involved so much with the physical stuff, (though if they are still fit and able why not) but the desk jockeys who inhabit the bureaucratic world that makes ordinary life such a joy. No longer getting a 2/3rds of earnings at retirement at 55, but being required to go to 70 till they get any money off the state (yes we pay their pensions as they do not contribute anything like the amount they take out) like everyone else. Naturally if you have a private pension you can go earlier if you want, but the public service pension will not be available to you till you reach 70.At the same time, the age at which employees can claim the state pension will rise to 66 as soon as 2016 for men — 10 years earlier than the last government had decreed.The Coalition is to consult on the most appropriate pace at which to increase the retirement age even higher in line with rising life expectancy.The outcome is likely to be that, by the second half of the century, most people will work into their seventies.In return, workers would receive more generous state pensions boosted by membership of company schemes, into which employees will be enrolled unless they opt out. Those reliant on state pensions will benefit from the restored link between pensions and earnings announced in this week’s Budget.Life expectancy is currently 77.4 for men and 81.6 for women. At present rates, there will be three people in their nineties for every newborn by 2050.Iain Duncan Smith, the Work and Pensions Secretary, told The Daily Telegraph that the radical pension reform he will oversee was designed to “reinvigorate retirement”.
To be honest I can't see any downside here.
1 annotations:
I have always considered salary and any pension to be part of a package and that a pension was deferred wages.
I worked as an engineer for the Civil Service, (until we were transferred to a Government Authority with a contributory scheme), and at that time there was no doubt that salaries were higher in the private sector. Our pay was determined by comparison with the private sector and took into account our "free" pension (and usually came about 2 years after the review so it always lagged).
I don't know what the situation is now, but I do get the impression that pay has risen so that it is now similar to the private sector, and if so, they should pay for their pensions in a similar manner.
Of course, my type of post would no longer exist as they no longer retain in-house expertise and simply call in consultants at even greater cost.
Incidentally, the fact that a pension can be considered as deferred pay is the reason that I do not approve of an individual loosing his pension if he is dismissed for misconduct, however serious. It was presumably earned when his conduct was satisfactory, so why should it be lost for some later crime?
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