Adequate pensions

The report of my address to the annual conference of the National Association of the Pensioners (The Sunday Times, June 11) wrongly attributes to me the statement that the pension of a former minister is now around Lm6,000.

I did mention Lm6,000+, but in a different context. What I said was that Lm465,000 had been voted for pensions to 70 ex-parliamentarians. This translates to an average of Lm6,600+ for each. As, throughout, the emphasis was on truly adequate pensions, I asked rhetorically whether this figure might not be a good gauge for deciding whether a pension is adequate or not.

A comparison was also attempted between Treasury pensions paid to ex-parliamentarians and Social Security Retirement Pensions, including the so-called two-thirds pension. By way of illustration, performance of the pension of a former minister was compared with that of an ordinary citizen.

On the assumption that both had the same salaries when they retired in 1990 and further assuming that in 2006 the current pay of a minister and that of the post occupied by the citizen are still equal, it would be logical to conclude that their pensions are also equal. Not so!

While in 1990 the pension of each was Lm3,495, in 2006 that of the ex-minister is Lm10,044 while that of John Citizen is Lm4,630. The reason is that the pension of the former is indexed to pay while that of the latter only attracts a flat increase of two-thirds of the flat-rate COLA.

Clearly there are two standards for judging adequacy. In this situation I eagerly await a really serious explanation what Government understands by 'adequacy of pensions' in the case of citizens such as myself.