Public sector pensions
Too much paper work
Excessive risk management has stifled returns on private sector pensions. More needs to be done to ensure everyone can expect a stress-free retirement, writes Robin Ellison
Pensions should be boring and public sector pensions doubly so. But to judge from the last few weeks, the subject keeps bubbling into the headlines and proving a headache for policymakers. University lecturers are suing the Universities Superannuation Scheme for trying to cut benefits (it’s actually the universities, not the scheme, that are trying to save money). A think tank (this time the Institute of Economic Affairs, but it could have been any of a number) published yet another excoriation of the public service pension system, suggesting that the true cost has been underestimated by tens of billions.
Rishi Sunak has broken, temporarily but maybe permanently, the triple lock by which the simplified state pension is increased each year by the highest of inflation, wage inflation or 2.5 per cent. The annual cost of state pensions is nudging £100bn, around 12 per cent of normal public spending. And doctors are refusing to work extra hours because they have to pay tax at over 100 per cent on their notional pension contributions, following added complications to the arcane pensions taxation rules.