From the UK Telegraph.
People retiring from the private sector need to save £250,000 to buy pension income equal to the national minimum wage – currently, £12,646 a year – or a total of £518,000 for a pension equal to national average earnings of £25,900.
These are among many eye-stretching facts in a new analysis of how unfunded promises to pay index-linked pensions to public sector workers are way beyond what most private sector savers can hope to achieve – and how these debts will burden children who have not yet left school.
The Intergenerational Foundation (IF) think tank used freedom of information requests to find out that 78,000 former public sector workers enjoy pensions of more than £25,900; and more than 12,000 get more than £50,000 a year. Three quarters of the latter are doctors and this index-linked income is irrespective of any private work or savings.
While many public sector workers pay into pension schemes, benefits usually outstrip employee contributions and the difference – or deficit – must be funded by future generations. Taxpayers’ total liability for public sector pensions, according to the report: ‘Are Government Pensions Unfair on the Younger Generation?’ is equivalent to £45,000 for every household in Britain and totals £1.2 trillion or £1,200,000,000,000.
An IF spokesman said: “This demonstrates the true scale of pension apartheid in the UK with news that 88pc of public sector workers are currently entitled to pensions related to their final salaries, which are typically the most generous type of pension, compared to just 10pc of workers in the private sector.”
Don’t be fooled – this sort of thing happens in the United States as well, where teachers and government workers live high on the hog today and pass the bill to their children, who will be forced to pay for it all tomorrow. Is that fair?