Deputies on pensions
Monday 18th April 2011, 2:27PM BST.
Mark Dorey
1 Yes
2 It is part of the remuneration package for States members and I presume it is a factor that the independent committee that reviews States members’ pay took into consideration when it recommended States members’ pay. Although I do not agree with the exact terms of the scheme it was the only pension scheme on offer that the States would contribute to. It is important that all employees join their employer’s pension scheme so that when retired they have another source of income other than the States old age pension.
3 Yes – I was a member of T&R from 2004-2008 and it was debated by the States.
4 Fair split: I argued in committee and, if I recall correctly, in the States that I thought it was too generous and it should be based on 1/60, the normal rate for most companies, and not 1/45 of pay. You also need to consider 2 further points:
a) The Press article mentioned that the age profile of States members is older resulting in the States contributions being higher than normal.
b) The pension contributions are calculated on the basic pay of £22,000 and not the actual pay that States members receive which I estimate on average is over £30,000. The percentage rate that the States pays would obviously be lower if it was calculated on average States members’ pay. Taxpayers value: You have to look at the complete package of States members’ pay and not just one element to reach an opinion if it is fair value. As the package was reviewed by an independent committee, I presume they concluded that it was fair value for the complete package
5 See answer to Q2. Also States members are employees from an income tax view as we pay ETI but Social Security consider States members to be self-employed.
6 Yes- as I have previously mentioned it is part of the package.
7 Yes.
8 No – it would send the wrong message about pension schemes that the States should be encouraging. There are many retired people that would be able to claim supplementary benefit if they did not have income from a pension scheme. Supplementary benefit is funded by the taxpayer.
9 I believe that the States employees’ pension scheme should be funded equally by States employees and the States and the same should be for States members. It should be based on 1/60 of career average pay. The independent review committee would then consider this when recommending future pay.
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Interesting comments, but I just wish there had been a question about whether the scheme should be Defined Benefit or Defined Contribution. This is THE big issue with public sector schemes generally.
Will the independent review be considering the option of a DC scheme for deputies?
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Deputy Mike Garrett’s response is a perfect example as to why the States’ Defined Benefit (gold plated) schemes, propped up by the Guernsey taxpayer, should end now.
Arrogant, head in the sand and what on earth has this man done during the last three years?
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Martino – at least Deputy Garrett actually bothered to respond in some detail and present his views.
You may not agree with him but I’m sure you’d agree with me that it is far better to hear the views of someone you disagree with than be fobbed off.
Speaking of fobbing off, read Deputy Peter Sirrett’s “response.” Then there are the 7 Deputies who didn’t respond at all – however I will give them the benefit of the doubt as they may be extenuating circumstances we are unaware of.
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Yes, you’re right in that respect Paul. The ones who didn’t respond and those like Deputy Sirrett who engaged in a fobbing off exercise have shown their clear contempt for the electorate.
Praise though to morally sound Deputies like Tony Spruce who have been totally open and honest and who have pulled out of the scheme because they can see the obvious unfairness of it all.
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Yes, Martino – I agree that those who oppose the scheme have done the right thing in pulling out.
In the spirit of honesty though, it would be remiss of me not to point out that I actually think our Deputies should be paid more than they are at this time. Whether that remuneration comes in salaried form or as part of a pension scheme is another matter though.
I personally think that, given the potentially short career of a politician, it would be better both from an administrative and moral perspective to pay our Deputies a higher salary and expect them to make their own pension arrangements if they so wish.
As I’m not a Deputy I can say with all sincerity that I have no vested interest in holding this view, apart from my own opinions on the importance of the role and what is a fair wage.
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Yes, Paul, fair enough, but another huge anomaly at the centre of all of this is that they’re supposed to be ‘self-employed’ like I am. `Also, how on earth are deputies to put an end to the unsustainable public employee gold plated pension scheme if they persist with their own?
The only fair way to resolve this is through an independent review of both politicians’ and civil servant pensions, carried out by a panel of PRIVATE pensions experts, that is absolutely binding on all parties.
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Self-employed – that’s something else we have in common, Martino!
As you will know, being self-employed means that Deputies have to pay a higher contribution rate than if they were employed – it also saves the taxpayer money by removing the employer’s contribution. So from that perspective it’s not all bad.
Like you though I do find the whole “self-employed” thing slightly bizarre in the context of pension arrangements. Perhaps the best way to avoid this confusion would be to remove the pension (leaving members to contribute to a private pension if they so wish) and pay a higher wage?
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I think you’ve hit the nail on the head Paul. Treat our deputies as true self-employed and raise the wage, leaving them free like the rest of us to cater for their own private pension arrangements, if any. In the meantime suspend the current scheme.
The civil servant nut is harder one to crack but those Defined Benefit pensions have got to go. In the real world of the private sector they’ve all but gone already because they’re simply unaffordable.
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