To think public sector DB pensions should be illegal

[OneAmberFinch]

Everyone seems to accept that it's obvious that the private sector, speaking very generally, pays better salaries in-year but the public sector makes up for it in excellent defined benefit (DB) pensions.

As in, you get a certain amount paid to you indefinitely, based on how many years of service, your level reached, average or final salary, etc.

Everyone acts like this is normal but it is actually insane!

Growing up in school I was always taught that it was a fundamental principle of a parliamentary democracy that one parliament cannot bind another. Parliament should be able to override anything a previous parliament did, so that voters always have the ability to change course democratically and nothing is locked in forever.

But having DB pensions for public sector workers is binding future parliaments into very large financial commitments that will leave them increasingly less wriggle room.

It would be one thing if they were defined contribution pots that were in each individual's name. That would operate independently and doesn't represent an obligation on future governments to pay out pensions out of future taxpayer money, maybe future taxpayers who have different priorities for what they want to spend the money on.

AIBU to think public sector salary culture should, if anything, be the reverse: high salaries now, because the government is legally not allowed to commit to future compensation in another government's name?

It's not just pension though. It's much easier to be off sick or work only contracted hours in the civil service. It's almost impossible to be sacked.

A decent pension is one of the reasons people become teachers, nurses, police etc. How would you feel if no-one was willing to do those jobs anymore in a couple of years’ time?

people will always do those jobs because yhey provide security.

Several people have made this point.

There are two scenarios.

1. The government of today has enough money right now to pay all the teachers of today. It is paying their salaries, and it's contributing an appropriate amount of money into an investment account for the future to fund all their pensions too. They have the money, so if they wanted to, they could equally well pay no pensions and pay a higher amount of salary today. Potential teachers would be equally happy with this because it would have the same benefit to them (they could use the extra salary they get to fund a private pension and be just as secure).

OR

2. The government of today does not have enough money to pay for the teachers of today. It's paying them low salaries, and then promising them that some future government will pay them the rest later. They don't have the money, so they're not funding an investment pot for the future, they're just hoping for the best.

Which one do you think it is? You clearly can't think it's #1, because that wouldn't have an impact on teacher recruitment.

Exactly. I imagine this is one of the reasons why the issue of unfunded pensions is not addressed and we keep kicking that particular can down the road.

I had a private sector DB pension. They changed the rules about 10 years in. Then they changed again to a DC pension instead due to the costs. It wasn't popular and the company went on strike against it but I can see why for the business it was the right decision and secured the pension fund.

Changes can be done. And I think it should be considered for public sector pensions. Protect what you've had and signed up to but future contributions should be DC. DB pensions are not sustainable.

Oh and pay a fair wage for a fair job is just basics. They should not be allowed to get away with poor pay just because you might get a better pension. How many dont collect the pension or for long enough to have the benefit?

To reiterate for those for whom it's still unclear, I'm not saying we should pay the current salaries and just cancel the pension so that public sector workers get paid less overall.

This thread is about whether they should get all their money upfront or not, because that's more honest accounting.

Argue on another thread about whether teachers get paid too much or too little overall :)

I stand with you OP

Teachers don’t get low salaries but the workload can be stressful

Yup, fair wage today for a fair job today - exactly my point

The country can not afford to increase public sector pay to private sector levels to make up for the pension. Many people see safe secure pensions as the main benefit of working in the public sector, remove them and make employment less secure ie the length of a parliament and you have no staff or desperate staff.
If your suggestion was taken on board you would have months/years of industrial action and unrest. Staff turnover would be massive and disruptive. It would be take to court with huge legal costs. Departments would fail, NHS would lose even more staff, teaching would be decimated, civil service would struggle to recruit. Morale would be on the floor.
Even if your plan did succeed in the end the cost of implementation would not be worth it.

I work in a university (not in the UK). About 15 years ago (before I joined), the university moved from DB to everyone just accumulating their own pension pot with whatever provider they want. The university was supposed to have investments to cover all the DB pensions, but whatever poor management happened, and it is now in enormous debt because it has no choice but to keep paying the DB pensions but the money with which to do that has run out. Meaning that there are immense cutbacks, posts not replaced, and pay cuts for people currently working, just in order to pay the next few years of pensions. Much as I love my retired colleagues and they absolutely deserve their pensions, It's super frustrating that we are constantly feeling the cutbacks to pay the pensions of people who aren't even working there any more.

Why is it pension bashing so popular now? And no, I didn't work in the public sector and was self-employed throughout my career.

I don’t think your idea is the huge money saver you think it is as most of DB public sector pension cost is covered by in-year employer/employee contributions. Like the state pension. From the IFG:

In 2023/24, total employer and employee contributions to public sector pension schemes were £49.9bn, while total payments to current pensioners were £55.0bn, requiring a top-up of £5.1bn from general taxation to cover the outgoings. In the national accounts, contributions by current public sector workers are treated as paying for payments to current pensioners. In 2024, the OBR forecasted that this balance would move into a surplus of £3.9bn by 2029/30 – meaning current contributions would be higher than payments.

https://www.instituteforgovernment.org.uk/explainer/public-sector-pensions

It’s simply a different way of organising pensions. Rather than investing an individual’s contributions, they’re paid straight out to pensioners.

Okay, so you're saying that we can't afford the pensions in the future then, right? Which is a crisis, right?

That's exactly what they've done to the state pension. They've taken over £80k off me. I should be getting my state pension next month, instead I'm working for another 7 years.

Read @InWithPeaceOutWithStress’ post.

The LGPS was reduced from employer contributions of 21.3% to 16.6% in Apr2026. These are in place for 3 years.Teachers pensions employer contributions are reducing from28.68% to17.68% April 2027.
In some parts of education the People's pension is now only offered and employer contributions minimum is 3% but wages are slightly higher. The People's pension only lasts as long as the individuals pot has money in it.If it gets to zero it stops.
Things are changing I have been told as the system is unsustainable as people are living longer.

Starting on £30k is perfectly sensible

@Doozsits 32k now

I am a public sector worker that will retire on a final salary pension.

I would have left years ago if it wasn’t for the pension as would many others. It retains a lot of talent and experience in my field. That’s not to be underestimated.

My parents - and inlaws actually - now retired - chose to be public sector specifically for the pensions.

The best one was local gov - fil retired at 55 and got nearly 20 years very good pension. What kind of gets my goat is that his wife now gets it - and she’ll go on forever and does not really need it. Is making a nice little living on it whilst managing nicely on the state scheme.

That said, that was then. This is now. And it is nowhere near as good (I believe). Also rare for people to have a ‘job for life’ so … well I have no idea what will happen… but I would very much like to retire one day. I am in a halted DB scheme but it changed a few years ago to DC. I didn’t understand it at the time.

Also I NEED to retire to open up an opportunity for another (younger) person. You don’t want be to hog the gig just for the pension… surely not?!

They are not unfunded. Local government pension schemes are managed and employers have to pay a contribution in the region of 20%+ of salary, and employees also have to nake contributions between about 7 and 10% just like private sector pensions.

There’s no recruitment problem. Newly qualified nurses, midwives, physios, etc currently are unemployed because the Trysts can’t afford to employ more staff. So they certainly can’t afford to pay 20% more.

Yes, but they won’t though will they? You see wage erosion time and again when private companies take over NHS services. And if the wage bill increased, the militant right who want to disband public services would be up in arms.