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Police pensions shortfall 'will hit £50m'

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Published Date: 18 January 2008
POLICE pensions funding has reached "crisis" proportions with an expected shortfall next year of more than £50 million, MSPs heard yesterday.
The claim came from Scottish Labour leader Wendy Alexander who called on Alex Salmond, the First Minister, to publish estimates for the police pensions bill for the next three years.

Labour later said there was already a forecast national shortfal
l of £17 million in pension funds for Scotland's police forces. This was expected to rise to more than £52 million next year, driven by a "massive" rise in the number of officers retiring over the next three years, the party said.

Ms Alexander said: "Grampian Police have had to plunder their budget to meet the crisis in police pensions.

"At First Minister's Questions, Alex Salmond repeatedly failed to give assurances that local authorities across Scotland would not foot the bill for the financial crisis facing all Scotland's police forces.

"It's time the SNP came clean on the true scale of the problem facing local authorities and Scotland's police forces."

In the Holyrood exchanges, Mr Salmond told MSPs: "What Wendy Alexander describes as a crisis might have been developing over the last eight years when Labour was in power."

He added: "The figures she asks for are already with police boards and local authorities, and discussions are under way on how we can address the pension issue which has built up over a substantial period of time."

In later clashes, Ms Alexander repeated her demand that Mr Salmond publish the estimates.

He replied: "The difference between this government and the last Executive in addressing such issues lies in the historic concordat between local and national government."



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  • Last Updated: 17 January 2008 9:42 PM
  • Source: The Scotsman
  • Location: Edinburgh
  • Related Topics: Pensions
 
1

Mercutio,

FALKIRK 18/01/2008 08:55:34
Plenty moaning from the "public services" brigade about pay rises etc but they keep pretty quiet on their early retiremeent and inflated pensions, the majority of which is paid by the long suffering taxpayer.
2

glassbenmhor,

18/01/2008 09:10:38
I'm no hand-shaker ,and never wore a Blue Uniform pay disputes are one thing,however a lifetime of service having always been in the knowledge and comfort of mind that later life is secure,is a promise that must be made good.Urgent attention from the government is needed
3

JayJay,

Right here 18/01/2008 09:54:26
I am sorry, but is Wendy on some sort of a crazed mission to blame Alex Salmond for everything.
This pensions issue has been a festering boil for years, not just in the police service, but across the wider public service. It is an issue that is not being addressed.
So, for the record, taxpayers who are not lucky enough to work in the public sector:
1. It remains a final salary scheme.
2. Police can retire after 30 years service. So, for a 17 year old cadet, that's retirement at 47. Assuming he lives to 70, that's a lump sum on retirement, and a final salary based pension for 23 years. Such a retiring oficer can also work elsewhere should he desire.
3. Retirement age in the public sector generally is lower than in the private sector.
4. No matter what happens to the stock market, public sector employees have a rock solid guarantee from the government that they will be paid their pension entitlements in full. As someone royally boned by Equitable Life, watching Brown say "it wisnae my fault" kind of sticks in the throat.
6. And before any public servant complains, yes I know you contribute to the pension pot. However, in the private sector, the response to these types of defecits is to either close down the scheme to new entrants, amend the scheme rules entirely or, worst case, go into receivership. When will the public sector acknowledge it has a problem and do something about it?
5. Aside from all of that, redundancy settlements in the public sector are significantly out of kilter with the private sector. One quango I know pretty well, offers two weeks salary per year of service to staff volunteering for early retirement.
Wendy, sit down and do the math. The "crisis" is not with our police pensions, but with your own pension entitlements and those of the many hundreds of thousands of people currently working in the public sector in Scotland. That £50m is mere pocket change compared to the wider defecit. When are you going to stand up and
4

Starright,

Wirral 18/01/2008 10:37:03
They've known about these 'shortfall' problems nationally for over 20 years to my knowledge.Hence'the substantial period of time' mentioned in the statement.
This Government cant be trusted with anything as important as Policing because they lack goodwill and appear to me to be anti Police.The England and Wales Police Federation positively loathe 'Jaqui' in the Home Office with good cause.
5

TSynicto the core,

Bellshill.Saltireland. 18/01/2008 12:38:17
Bendy Wendy challenges Alex Salmond to 'come clean and reveal the truth behind the police pensions shortfall'.
Go ahead, Alex. Reveal. In words of one syllable inform the ever clutching-at-straws wee yin that you have been in power just a matter of months, an impossible time scale in which so massive a shortfall could have happened, that the truth behind it and all of Scotland's ills is the blame lies squarely on the shoulders of anti- Nationalist Holyrood Scottish Labour, a decade of anti-Nationalist Westminster renegade Scots Labour and centuries of Tory anti-everyone else mis-rule.
6

sam the god,

18/01/2008 12:39:33
The reason that the public sector should get a better pension is as payment for all the years of moaning from the majority of the general public for which the majority are paid a pittance (would you enjoy all the grief every week for the base minimum wage).
7

TSynicto the core,

Bellshill.Saltireland. 18/01/2008 16:25:03
#9.Hey, that's a brilliant idea. How about surcharging Scottish Nu Labour for all the shortfalls their stupidity and 'jobs for the boys and girls quangos' has cost Scotland. That would surely bankrupt them out of existence.
8

FLUB,

a rocky outcrop in eastern central Scotland 18/01/2008 16:51:20
#5 JayJay - generally a good post, but your point No. 2 is incorrect. Police Cadets, who were aged 16-18.5, never contributed to a pension scheme, as they were not in fact Police Officers.

The earliest you could begin contributing was 18.5 years, which means the earliest possible retirement age is 48.5 years. However, since October 2006, the joining age has been reduced to 18, but the new pension scheme for the Police from April 2006, (which is not as good as the 1987 scheme) gives the earliest pensionable age as 55, effectively a 37 year scheme.

You'll have spotted that the 'benefit' to the public purse will therefore not become apparent until 2043.

As far as the funding shortfall goes, this has been brought to the attention of successive administrations for at least 20 years that I know of, by Police Staff Association representatives, and by Chief Constables, who are not noted for their loyalty to, or concern for, those under their command.

CC's pensions, as you can imagine, will be more substantial than the ordinary cop's, who will need to work after retirement to maintain a standard of living.

And, as has been identified hereon, the worst culprits for sticking their heads in the sand have been successive Labour administrations. TTFN.
9

Thomas the Tank,

Edinburgh 30/01/2008 09:50:20
#11 - excellent post and a refreshing change to the usual ill-informed idiots who rant about 'doughnut-eating cops'. Alex Salmond wouldn't need to try too hard to knock BendyWendy off her wee fat hind legs on this one - he could draw her short-span-of-attention to this from 8 October 2003, when the awful Kauffy Jamieson told Parliament she was on the case. http://news.scotsman.com/latestnews/Jamieson-to-protect-police-pensions.2468165.jp
So what DID Kauffy do about a situation that highly-paid managers and police boards should have seen coming for 30 years, Wendy?
10

old dog,

dumfries 17/06/2008 00:06:33
The police pension fund has been in dire straits for decades with existing members paying for the pensions of those who have retired. There is no investment of police pension funds ( although for the first time this may be a good thing with the decline in world markets and the credit crunch continuing the way that it is) and there has been a shortfall in the scheme for decades. I can hear the standard call from members of the public that the police pension is very, if not over generous in it's benefits and I would remind these people that 11% of officers salary (up to 2006) was paid to the fund, considerably more than most public sector workers who don't (without meaning to over egg the pudding)go out every day not knowing what they will encounter on shift. They may be dealing with an elderly person lost in the street and confused through altzheimers disease one minute and some drug crazed maniac the next who is in posession of a knife or blood filled syringe waiting his oppertunity to stick a cop.
It is very easy to get caught up in the blame culture that exists today and say it is the fault of this administration or the previous,but what I say is that the Police pension scheme is a fair reward for 30 years of commitment to a cause which most people see as worthwhile and necessary but the majority would rather leave to someone else to do.
The new police pension scheme is considerably less appealing with a drop in benefits from 66% of final year salary pension to 50% with the requirement to work for an additional 7 years to obtain this level of pension although the monthly input has been reduced from 11% to 9%.
Would you fancy going in to a rammy in a pub full of 20 year olds or a violent demonstration at 55 to 65 years of age and having to physically restrain these people from fighting or resisting arrest.
the new scheme has been introduced to cut the cost to the public purse in pension payouts, but no savings will be seen for at least 25 years.
The old pe

 

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