Time to fix this pensions plague

Double standard: University staff are split over pensions
Double standard: University staff are split over pensions
0
Have your say

OK, so I didn’t benefit from the best education.

I admit I don’t have a fancy university degree.

It was Carter Lodge School, Richmond College and then Sheffield Poly for me.

Still, however lacking my formal education may be, I reckon that when it comes to right and wrong I know what’s what.

And what’s happening to our pensions is plainly wrong.

It’s bad enough that we’re all going to be working longer before we become entitled to a state pension.

But for the bosses to tell us we will be entitled to a certain type of pension only to change it years down the line can never be right.

And that’s precisely what’s happening time and time again – costing people a fortune when they retire and causing fears that many affected will be left in poverty.

In days of old a good employer offered new starters the opportunity to join a final salary scheme,

Such a scheme allowed employees to know exactly where they stood financially.

It was an easy calculation. You’d get a percentage of your final salary for every year worked up to pensionable age.

For example, under a 60th schemesom one with 50 years’ service would be guaranteed a pension equal to five sixths of their last pay packet. Simple.

Then someone identified a cheaper option – for the boss at least.

The money purchase scheme is attractive to the boss because the company pays less into it.

But it offers no guarantees on how much is payable on retirement and, in many cases, is far less rewarding than a final salary pension. Surely it can’t be right to shift someone’s guaranteed financial future to something inferior.

However the plague of the money purchase schemes has been allowed to spread like a grass fire during the school summer holidays.

Being British we simply put up with it. If this type of thing happened on the continent there’d be such a protest the water cannons would be out.

But here we subscribe to the view that it’s best to take our medicine – whether it’s doing us any good or not. To sweeten the pill, and to help keep us compliant, we’re told that we’re all in it together. It will have an effect on us all – boss to tea boy.

But you only have to look at what’s going on at Sheffield University to identify that’s not always so.

University bosses are intent on changing the pension scheme, claiming they have no choice. It’s a consequence of rising costs and falling numbers of employees choosing to opt into the existing scheme, they say.

But instead of introducing a one-size-fits-all alternative, they instead opted for a two tier structure which means the lowest-paid workers – porters, cleaners and clerical staff – lose out to the tune of thousands of pounds each year.

In the meantime those on higher salaries – including Vice Chancellor Keith Burnett who earns £294,000 per year – will continue to benefit from membership of the Universities Superannuation Scheme and its final salary pension provision.

And that can’t be right.

The damage this shabby affair is doing to the university’s reputation as an establishment which values and encourages diversity is massive.