Don’t trust them with your money
Thursday 3rd January 2013, 5:00PM GMT.
ON YESTERDAY’S front page, we disclosed the truly frightening ongoing cost of maintaining the public sector pension scheme: equivalent to more than £56,000 every day for the last five years.
To some extent, it is a slightly misleading figure. All employers have employment expenses that go beyond the headline salaries paid.
The issue is whether the additional pension element is fair and sustainable. No one outside of the gold-plated States scheme was in any doubt that it was a crippling and unaffordable burden on the taxpayer.
Now, the working party looking at the scheme under an independent, expert chairman has come to the same conclusion, which is why they are recommending ending the blank cheque aspect of a pension based on final salary irrespective of what the employee has contributed and capping the employer (taxpayer) contribution at 14%.
It remains a generous scheme and still represents an element of social engineering at the expense of those islanders who are not working for the state. But it is a start. Long overdue but welcome nonetheless.
Some correspondents on these pages have tried to challenge the need for change but the case for reform is overwhelming.
What is happening at Guernsey Electricity is just one example of that. Although the pension changes recommending capping States contributions at 14%, GEL is already paying an additional 17.3% of every salary because its scheme is £8.7m. in deficit. That, however, is not enough and over the last two years, it has topped it up with a further £800,000.
That is customers’ money and their bills are inflated by around £70 as a result. This enforced transfer of public funds is one reason why the regulator calculates that average electricity prices here are around £300 more than they are in Jersey.
Treasury and Resources, in confirming the figures we ran yesterday, also coincidentally revealed the lack of care over the years in safeguarding taxpayer funds. Why on earth, for example, were staff at Guille-Alles and the Priaulx included in the scheme with those at the colleges?
With the foot-dragging over pensions and the dithering over the financial transformation programme it is clear that politicians are lamentable custodians of other people’s money.
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