I am afraid that the ‘stealing pensions to help the banks’ is a misguided (very wrong) claim. The government is not attacking public service pensions, it is actually undertaking financial risk management in this area in the same way that it is having to do in many others.
What these civil servant individuals in these areas forget is that the cost of funding their pension promise is significantly higher than the contributions that they make, even after the proposed increases come in per the government proposals.
Nobody is stealing their pensions, every penny of accrued rights will be maintained – it is only changes to their pension going forward which is relevant. Even then many workers are protected (eg – anyone within 10 years of retirement).
What these individuals do not fully appreciate is the arithmetic associated with the level of funds necessary to pay for an index-linked pension for the rest of their life at retirement. It is massive due to much improved mortality and the current low interest rates (which increases the present value of future pension payments).
A simple example which exemplifies the position with the current scheme where a 60 year-old teacher retiring on a £24K pa index-lnked pension (this is two thirds of a career in teaching with a final salary of around £36K), would cost around £600K to buy from an insurance company via an annuity.
With all due respect, a teacher reaching £36K salary late in their career could not possibly have afforded to contribute this type of money into a pension, indeed they would typically contribute around 20% of that, or about £100K (and that is very optimistic), so the taxpayer is paying £500K+ and it is increasing all the time as longevity improves. And, let us not forget, around 70% of the £100k contributions is actually paid by the employer (read Tax payer) in the first place. Which is why when some strikers say that there is not a problem since there is a surplus in their scheme (assuming it is funded which many are not), but they fail to appreciate that this is only the case because 75%+ of the contributions are paid by the taxpayer into the pension fund via the employer contribution.
This situation is wholly untenable given that the vast majority of taxpayers have reduced disposable income and are unable to make anything like adequate pension provision for themselves (this is the case for 70%+ of all taxpayers).
How therefore can the strikers genuinely feel aggrieved when they have a pension scheme which is now wholly outmoded and was designed for a time when, to be blunt, people had only 5 years or so of retirment before dying. Now it can be on average 22 years for a woman and 18 years for a man.
It has to be addressed and my own big concern is that the government bottles it and allows this massive problem to run on with all the ultimate consequences that this will bring.