But an interesting attempt to give a sense of scale:
AXA also calculated that a woman in her mid-20s working in the private sector would have to contribute almost a quarter of her annual salary every year to get a pension comparable with a public counterpart.
Given that pensions are simply delayed compnesation that means that public sector wages are, by this measure alone, 25% higher than private sector.
OK, to be more precise, 25% minus whatever pension contribution that public sector workers have to make themselves. Different schemes have different amounts but for some reason 6% sticks in the mind. So 19% then.
4 responses so far ↓
1 Formertory // Mar 22, 2010 at 2:12 pm
That’s too simple. The public sector employee gets guarantees of index-linked future income regardless of investment performance. The private sector employee gets no such guarantee.
The existence of that pension guarantee is worth money.
2 Chris strange // Mar 22, 2010 at 5:49 pm
Plus the public sector worker will have a much higher take home pay as well.
3 FCAblog // Mar 22, 2010 at 7:48 pm
And the public sector worker can often wangle early retirement without actuarial discount.
4 RH // Mar 23, 2010 at 12:17 am
And don’t forget the value of their lump sum payment on retirement.
Leave a Comment