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The unions’ pension myths

30 November 2011

4:54 PM

30 November 2011

4:54 PM

This morning I debated the President of the Association of Teachers and Lecturers live on Sky News.  It was incredible how few answers she had when confronted with the facts about the strike.

According to research at the Office for National Statistics, public sector workers are paid 7.8
per cent more than those in the private sector after controlling for things like age and qualifications. And they get far more generous pensions, worth about a quarter of their pay (see here, p35), on top of that — with most of the cost paid
for by taxpayers. But they striking and opposing quite modest reforms, creating yet more disruption for the families who pick up the bill for their pay and pensions.

To defend their intransigence, the unions are retreating to wildly misleading statistics. Today’s press release from the TUC is a
particular masterpiece of misdirection. They have polled the public, who put the average public sector pension at around £15,000. They use that to explain away public opposition to the
strikes. Those who give a higher estimate of the average public sector pension are more likely to oppose the strikes. And they argue that the ‘more realistic view’ is that the average
is £5,000 to £9,999.  The idea is that if people weren’t taken in by ‘misleading propaganda about “gold-plated pensions”’ they would be backing the
unions to the hilt.

But the average public sector pension is pretty much meaningless. It mixes in people who have spent their career building up a pension with those who may have only worked in a given public sector
job for a much shorter period of time, and may have been accruing other pensions elsewhere during the rest of their career.

All the public have done when asked to give an average is respond with what they think a public sector worker would get after a normal career. And if, for example, a teacher worked for 30 years and
retired on a (for a final salary) quite modest £30,000 a year, they would get a pension of £15,000 a year. 

The public have the figures right.  They just don’t buy the unions’ misleading use of statistics about the average public sector pension, which are heavily biased by including
those pensions based only on parts of people’s careers.

This isn’t the only pension myth the unions are trying to
. We have to hope that people aren’t taken in by this spin.

Matthew Sinclair is director of the Taxpayers’ Alliance.

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