3 days ago
Teachers' gold-plated pensions are about to be exposed as a Ponzi scheme
The Teachers' Pension Scheme is the second-largest of the 'unfunded' public sector pension schemes, behind the NHS.
Like all the gold-plated public sector pensions, it offers a guaranteed, fully index-linked 'defined benefit' pension. Like all the other unfunded schemes, there is no pot of money funding it – the money contributed towards these pensions over the years has been spent, not saved.
Spent, by the way, on anything the Government of the day fancied at the time.
In essence, there is a raid every year on these funds – just like Robert Maxwell did when he illegally plundered the Mirror Group's staff pension fund. But when the Government does it, it's entirely legal because it makes the rules.
You might imagine that, seeing as there is no fund, the Government would not bother to calculate what they should have put in it. But there is a whole industry devoted to just this – charging public sector employees and employers for the fund-that-never-was. All paid for ultimately by the Government itself, which means you and me.
Except in the case of the Teachers' Pension Scheme, taxpayers aren't the only ones funding it. Private schools are also eligible to enrol their teachers on the state-backed scheme.
