Latest pension scandal to rock government

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Latest pension scandal to rock government

By Alex Foster | Sun 4th January 2009 - 11:45 am

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Rupert Jones reports for the Guardian:

… government ministers’ pension pots are defying the stock market slump and are up by 10% in a year, it emerged this week. Research by the Liberal Democrats revealed that high-profile ministers have pension pots worth more than 10 times the average in the private sector. Gordon Brown has a personal ministerial pension pot of £274,000. Justice secretary Jack Straw’s is £294,000 and chancellor Alistair Darling’s is £235,000. Lib Dem work and pensions spokesman Lord Oakeshott says: “Ministers and mandarins live in a pensions time warp. They look like the first world war general in Blackadder, sipping fine wines in a chateau well behind the front line while privates in the trenches get their pensions shot to pieces.”

Read more by Alex Foster or more about alistair darling, gordon brown, jack straw, matthew oakeshott or pensions.
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4 Comments

Alix 4th Jan '09 - 12:13pm

Ok, I’ll start.

Are you sure these are real raisins in this plum duff?
David Wright 4th Jan '09 - 12:38pm

‘Pension pot’ implies the value of their pension funds – in which case they are not very high for people on their salaries. £274,000 would buy about £12,000 a year as an inflation-linked pension.

I suppose many people will read it as the level of their eventual pension payments. Does anyone know which it really is?
GavinS 4th Jan '09 - 5:54pm

I’d have thought their Ministerial pensions would be unfunded, like the civil service scheme.

This longer article suggests that ministerial pensions are funded (and that ministers make contributions…albeit quite small contributions). It also says that Gordon Brown’s would be expected to pay out £19k per annum.

http://www.telegraph.co.uk/finance/personalfinance/pensions/4030669/Government-pensions-increase-in-value-as-private-workers-funds-shrink.html

Of course that’s in addition to an MP’s pension worth at least the same again (probably rather more with long service like this lot).
Anonymous 4th Jan '09 - 10:46pm

Prime Ministers salary is c. £190k so I assume it is the amount of the fund.

“Research by the Liberal Democrats revealed that high-profile ministers have pension pots worth more than 10 times the average in the private sector.”

Is this a meaningful comparator? Average earnings in the private sector aren’t comparable with the salary of a Cabinet minister.