PENSIONS

The pension deficit for local councils in England and Wales could hit £60bn this year according to the Lib Dems.

Apart from a firm case of NSS there are other important factors about this.

Firstly - Like the misguided FRS17, this does not mean councils are going to go bust. Don't panic. The defecit figures are a snapshot based on one particular day and that valuation of shares, bonds etc held by a pension fund versus if every single member of that pension fund retiring that day.

What this does mean is that there will have to be siginificant shifts in the portfolio value to pay for those who retire.

Which leads me to-
Secondly - the fundamental flaw in civil service pensions. They are protected by law, which means that there needs to be an act of Parliament before any siginificant change to provision can be applied.

Which means you and I pay for it, either through cut services or higher tax bills.

This two-tier system has been flawed for quite a number of years and I have blogged about it in the past.

The State can no longer give such gold plated schemes to non-income generators - ie: they spend the money we give them, they do not generate the income of the country.

State-employed wages have rocketed in the past 13 years and the original excuse of poor wages versus life service can no longer apply. Sure there are still lowly paid council workers but there are lowly paid private workers - why should council workers get better deals?