State beats private companies on pensions

THE recent report of the Comptroller and Auditor General on public service pensions gives the lie to many of the wilder estimates of the value of those pensions.

The second report of the benchmarking body in 2007 estimated the effective employer contribution rate of a new entrant to primary school teaching to be 19.4% of salary.

The comptroller’s recent report puts the figure at 7.2% of salary.

What has changed? The inclusion of the pension levy contribution is one factor.

However, the main difference is that the comptroller looks at the actual cost of providing the pensions as opposed to the notional cost of buying a similar pension in the market place, a cost that is inflated by all the inefficiencies and waste in the provision of pensions to the private sector.

The comptroller’s report confirms what many people have long suspected: the state is more efficient at providing cost-effective pensions than private financial companies.

It is time for a real pensions debate aimed at ensuring that all workers, be they private or public sector, can look forward to a sustainably funded retirement free from the fear of poverty.

Pat Crowe

The Walled Gardens

Celbridge

Co Kildare