ST HELIER parishioners had their say on Monday evening and decided that full pension rights should be extended to parish manual workers on temporary contracts. By a majority of 68 votes to 53, those at the parish assembly also decided that new employees should not be barred from joining the Public Employee Contributory Retirement Scheme (PECRS).
We are most unlikely to discover what the vast majority of parishioners who chose not to attend the assembly think about those decisions, but it is clear that the mood of the meeting was at odds with the wider world’s conclusions about the shape that pensions must take in the future. As so many cases in the private sector have indicated in recent years, there is growing awareness that final salary schemes — which, subject to certain conditions, PECRS is — can be prohibitively expensive to run.
In spite of this, it would be wrong to describe the assembly’s willingness to stick with PECRS and reject a money-saving alternative as fundamentally wrong or utterly perverse. As well as acknowledging the inherent value of a final salary scheme — particularly for employees who have worked for an organisation over a long period — its collective view was rightly sceptical ab-out the relative merits of the defined contribution scheme being advanced as an alternative to present arrangements, although these do have the advantage of ‘portability’ for people who move from job to job.
Meanwhile, T & G Unite union official Nick Corbel quite rightly pointed out that there are special features of PECRS which mean that it is not subject to some harsh facts of life affecting similar pensions in the private sector. Essentially, States Auditor General Chris Swinson has confirmed that current arrangements allowing the scheme’s shortfall to be addressed over an astonishing but nevertheless permissible term of more than 80 years are, from an accounting perspective, fit for purpose.
However, before any of the 68 people who favoured what can be regarded as the pensions status quo engage in ex-cessive self-congratulation, it is worth pointing out that factors making final salary schemes too expensive — such as increasing longevity of recipients and lower investment returns — are unlikely to go away.
It is therefore likely that not only the parish of St Helier but also the States will be obliged to look again at pension provision if the best use is to be made of scarce public resources.
Pensions and the status quo
ST HELIER parishioners had their say on Monday evening and decided that full pension rights should be extended to parish manual workers on temporary contracts. By a majority of 68 votes to 53, those at the parish assembly also decided that new employees should not be barred from joining the Public Employee Contributory Retirement Scheme (PECRS).
We are most unlikely to discover what the vast majority of parishioners who chose not to attend the assembly think about those decisions, but it is clear that the mood of the meeting was at odds with the wider world’s conclusions about the shape that pensions must take in the future. As so many cases in the private sector have indicated in recent years, there is growing awareness that final salary schemes — which, subject to certain conditions, PECRS is — can be prohibitively expensive to run.
In spite of this, it would be wrong to describe the assembly’s willingness to stick with PECRS and reject a money-saving alternative as fundamentally wrong or utterly perverse. As well as acknowledging the inherent value of a final salary scheme — particularly for employees who have worked for an organisation over a long period — its collective view was rightly sceptical ab-out the relative merits of the defined contribution scheme being advanced as an alternative to present arrangements, although these do have the advantage of ‘portability’ for people who move from job to job.
Meanwhile, T & G Unite union official Nick Corbel quite rightly pointed out that there are special features of PECRS which mean that it is not subject to some harsh facts of life affecting similar pensions in the private sector. Essentially, States Auditor General Chris Swinson has confirmed that current arrangements allowing the scheme’s shortfall to be addressed over an astonishing but nevertheless permissible term of more than 80 years are, from an accounting perspective, fit for purpose.
However, before any of the 68 people who favoured what can be regarded as the pensions status quo engage in ex-cessive self-congratulation, it is worth pointing out that factors making final salary schemes too expensive — such as increasing longevity of recipients and lower investment returns — are unlikely to go away.
It is therefore likely that not only the parish of St Helier but also the States will be obliged to look again at pension provision if the best use is to be made of scarce public resources.
Article posted on 14th May, 2008 - 2.32pm