North Lanarkshire Update



I posted some figures yesterday from North Lanarkshire Council's annual accounts which set out the pension entitlements of some of NLC's senior officials including its outgoing chief executive, Gavin Whitefield.

Now Gavin is a long serving local government official, but if you ask me his pension benefits demonstrate why 'final salary' pension schemes are skewed in favour of the higher paid.

Regular readers will recall that the big public sector unions went on strike recently in an effort to defend final salary pension schemes, something they have failed to do in relation to equal pay, for example.   

Which says a lot about trade union priorities, of course.

But the reason I think that final salary schemes should be replaced by career average pension schemes is that under the latter system people by and large get out what they have paid in.

If we consider chief executive's pay in North Lanarkshire, for example, this increased from £105,777 in 2002 and according to the latest figures in the annual accounts the CEO's total remuneration stands at £172,699 in 2015.

So even though Gavin has not been earning anything like £172,699 throughout his long local government career, that figure is still used to determine his lump sum and annual pension.  

The same is true for other employees who have a clear career path and get a big pension boost if and when they get a promoted job, whereas the majority of the workforce tends to benefit only from annual pay increases which have been in short supply in recent years.

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