GUERNSEY’S ‘chancellor’ wants to close States workers’ final salary pension scheme to new entrants.
The scheme is currently under review by the Public Sector Remuneration Committee.
But Treasury minister Charles Parkinson (pictured) has rejected a demand from business in a recent high-level meeting that the scheme should be ended immediately.
The Chamber of Commerce also formally asked that refining the machinery of government be prioritised and 10% slashed from the States budget.
‘Chamber’s views on the machinery of government, public expenditure and the States’ staff pension schemes are well known, and I can confirm that their representatives took the opportunity to reiterate their position,’ said Deputy Parkinson, after Chamber went public about the September meeting.
‘I took the opportunity to update the representatives of Chamber and the other business organisations on the progress being made towards improving corporate governance in the States.
‘Public expenditure will be reduced as a result of the Fundamental Spending Review. But, on the assumption that this process takes the opportunities for eliminating waste and duplication, and privatising any services which can be privatised, it follows that further cuts in public spending would impact front-line services delivered by the States.’
He said it would be a political decision as to what, if any, services should be eliminated.
‘It is easy to make calls for sweeping cuts without specifying the services to be ended,’ said Deputy Parkinson.
‘The States’ employees pension schemes are essentially a matter for negotiation between the Public Sector Remuneration Committee and the unions, and I understand that this subject is on the PSRC’s agenda. My personal view is that the schemes should be closed to new entrants and that they should be replaced by defined contribution schemes.’
Both Labour and the Conservatives have announced public sector pay freezes to help cut the budget deficit.
Deputy Parkinson said that a pay freeze could be justifiable in a very low inflation environment, but many States staff were on multi-year pay deals, which he did not want to renege on.
Chamber of Commerce president Paul Luxon said that it shared its hopes over cutting public expenditure, refining the system of government and ending the pension scheme with the other business groups that form the G4.
It will lobby ‘relentlessly’ to achieve these goals.
‘Government cannot be left to its own devices on this matter for two main reasons – first, the initial response to the growing trend of declared disquiet culminating in the Wales Audit Office Report has been “to wait and see”, which is clearly not an acceptable approach in Chamber’s view,’ he said.
‘Second, it is virtually impossible for the Assembly to grasp this issue and tackle it head-on for the very reason highlighted in that report, in that the system in which it operates is so flawed.
‘How can we expect deputies to make a telling executive decision of such importance when in reality there is no realistic method of leadership or power to seize the situation?’
Article posted on 19th October, 2009 - 2.30pm
6 Article Comments
Not before time. This should have been done years ago and I only hope that it actually happens, rather than the States caving in to civil servants’ pressure.
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You know, with people like you around Phil, it’s a wonder why anyone would want to work for you!!! (As your kind are so quick to point out, as taxpayers “you” pay the CS wages).
I know quite a few CSs and they are extremely hard working and care a lot about what they do. And what do they get? Assumptions that they’re money grabbing, gold plate seeking layabouts who put pressure on when anything gets threatened (see above post!)
FYI those CSs I know are quite comfortable with the idea of closing the scheme to new entrants. BUT, don’t forget that the actual annual salaries aren’t quite as high as in the private sector, with no other perks like health etc. If new entrants go on money purchase schemes, you can bet that the annual salaries will rise to compensate! They will have to – the CS still needs to compete for staff!
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this will put costs up in the short term, closing the final salary scheme, as Billythefish says will mean that new employees will look to have salaries to match the private sector, rather than accepting a lower salary in the knowledge that that is providing better for their retirement. the cost of contributions will still be there, unless the proposal is for CS’s not to have company pensions at all.
Chamber also want a 10% cut in budget, do they want a 10% cut in services, 10% less schools, 10% less hospital wards etc. Where do they get the idea that ‘cutting’ saves money. You cut a premises maintenance budget, maintenance work doesn’t get done and it costs more later to put it right.
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Billythefish and kilo, well said.
Some people also conveniently forget thet CS’s also pay their taxes.
I am not a CS but it seems to me that they are easy targets and its easier to pick on them than to deal with the matter of those who are fit to work but continue claiming benefits
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How about Chamber start the ball rolling with a 10% cut in prices!
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Why cant the CS just lose the pensions and use that pot to give them decent salaries??
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