Those working in public sector roles have access to better pensions than those in the private sector, according to new research.
A report by the Institute for Fiscal Studies found that the range of benefits offered to public-sector workers meant that their pensions were worth more of their salaries than those of the private sector.
These benefits included better access to more generous gold-plated schemes, the ability to claim pensions earlier, longer job tenures and having higher earnings at a younger age.
Overall, the research found that for a public sector worker, one year’s worth of accruals in a defined benefit pension was worth an average of 25.5%, compared with an average of 18.9% for the private sector.
Women in the public sector experienced an even greater advantage, with pensions worth 26% compared with those in the private sector who would get 17.6%.
The report said: “It is not just true that defined benefit pension coverage is higher in the public sector than the private sector, but those pensions are also worth more as a share of the total remuneration package.”
Many defined benefit pensions have now been closed to entrants into the private sector and replaced by less generous contribution schemes. Elsewhere, some private companies have closed their defined benefit schemes to existing members, as they became too expensive.
Copyright © Press Association 2009