No this isn't about Indyref. This is about the University Superannuation Scheme. And I'm angry. I've voted to reject the latest proposals and I just wanted to state why:
The accrual rate is bloody awful. Even the 1/75ths is far worse than other schemes. I could get a lower paid job in a school or a Scottish local authority and retire on a higher pension. The argument is "well at least we still get a lump sum". Yes, but that lump sum starts being devalued the moment you get it, while accrued pension gives you guaranteed income for the rest of your life.
The cap at £55,000 on defined benefit is grossly unfair, especially if you have a) any desire to ever be promoted or b) hope that your wage will rise faster than CPI inflation (which the £55k cap will be linked to). People who earn more get a hell of a lot more out of final salary schemes and defined benefit schemes and live longer. This is unfair and unaffordable, the but the way you deal with that is through graduated contributions - the more you earn, the more as a percentage you pay in.
The cap is also divide and rule. Once this is introduced all those on salaries over £55k (the bosses) will not give a shit about the DB scheme as it will provide such a pittance of their pension. The shift to FS and and CARE schemes in USS was already divide and rule, but the way to overcome this is to move us all onto a more generous CARE scheme. And remember, that VC with his tax-free pension pot on his salary of £250k won't need to worry about investing it in an annuity with a decent return. All the other sources of private income will mean he will be able to splash out on a Lamborghini with his pension pot.
We have not been told what other options there are to close the deficit. I want to know: what employer and employee contributions will have to increase to in an alternative recovery plan maintaining final salary; and what they would have to increase by to maintain defined benefit.
Pensions policy in the UK has been a complete mess for the past 60 years and we're all paying the price for this. However, workers should not shoulder the entire burden as we are increasingly doing. Employers have to shoulder their responsibility, and cough-up when they've done things like take contribution holidays. We also need long-term sustainable solutions, not knee-jerk reactions to current market conditions.
Returns on annuities, particularly gilts, are very low at the moment, so schemes are spiraling into deficit. However, globally the returns to capital are increasingly massively. All those headlines about "growing inequality" - that is because the returns to capital are increase and the returns to labour (wages) are being eroded. Pensions are deferred wages. We need to fight for organised labour. So vote no. Defend USS.
(apologies for any factual errors on accrual rates etc; pensions are complicated; I only have so much blogging time)