Millions of public sector workers are preparing to take part in another one-day strike in protest at pension reforms. Stuart Arnold does some number crunching to ask if the pensions they draw really are ‘gold-plated’ as some critics suggest

WHAT IS THE AVERAGE PENSION PAID TO A PUBLIC SECTOR WORKER?

Payments will vary depending on salary and length of service, but according to the review published by Lord Hutton earlier this year, the average pension is worth about £7,800 a year.

Excluding the highest earners that drops to £4,200 a year.

SO, NOT QUITE GOLD-PLATED. HOW DOES THAT BREAK DOWN IN TERMS OF INDIVIDUAL JOBS?

In 2009-10, the average annual pension payment to a retired local council worker was £4,052. NHS staff received £7,234 and civil servants £6,199.

WHAT ABOUT PRIVATE SECTOR WORKERS?

A definitive figure is much harder to come by, but it has been suggested that the average private pension fund is worth less than £2,000 a year.

HOW DOES THE DEAL COMPARE?

The Treasury has offered what it says are improved terms to the unions, which mean that while most workers will still have to work longer and pay more, they will receive pension benefits at least as good, if not better, than what they get now.

This could mean workers retiring on deals worth up to 20 times what their private sector counterparts get.

The Treasury says a teacher retiring on a salary of £37,800 after a full career will get an annual pension of £25,200, under the terms of the deal.

A private sector worker would have to save £675,000 into a retirement fund to receive the same benefits, it says.

Another example given is that of a nurse retiring on £34,200, who would have an annual pension of £22,800. A private sector worker would need to save £600,000 to afford those benefits.

WHAT ABOUT THE HIGHEST PUBLIC SECTOR EARNERS?

Research by campaign group the TaxPayers’ Alliance in 2006 revealed that about 100 civil servants – those at the very highest echelons of Government – have pension pots of more than half-a-million pounds, which would pay out about £20,000 a year.

Meanwhile, the National Audit Office says about 4,000 members of the civil service pension scheme, along with 15,000 people from the NHS and just under 2,000 members of the teachers’ pension scheme get more than £40,000 a year in retirement. However, these groups are very much in the minority.

WHAT ABOUT IN THE PRIVATE SECTOR?

The Trades Union Congress (TUC), in its Pensions Watch report, published in September, says the average accrued pension among directors of top UK companies is £224,121. Accrued pension means the amount of pension payable to them on retirement, based on their service to date.

A sample of 362 directors was covered by the TUC’s survey. In the report, the TUC says the average occupational pension entitlement for the population as a whole was £9,568 a year.

This meant that the average director’s pension was more than 23 times higher than the national average, it said.

WHO IN THE PRIVATE SECTOR EARNS MOST FROM THEIR PENSION?

The TUC named five directors of firms as having the highest single accrued pensions.

Top was Jeroen van der Veer, of oil company Shell, who would receive £1,253,709. He was followed by David Brennan, of global pharmaceutical firm Astrazeneca, with £1,006,000.

Others listed included Sir Frank Chapman, chief executive of oil and gas company BG, who would receive £694,000.

In the conclusion to its Pensions Watch report, the TUC says there is no justification for more generous pension provision for directors, whose much larger salaries make it much easier to save.

It called for directors to be members of the same pension schemes as their staff and on the same terms.

WHAT IS THE DIFFERENCE BETWEEN PUBLIC AND PRIVATE SECTOR PENSIONS?

Most private firms in recent years have withdrawn more generous final salary pension schemes – also known as defined benefit schemes. These link pension payments to salaries at retirement. They have been replaced with so-called money purchase schemes, which are based on stock market investments and do not offer a guaranteed benefit.

In the public sector, final salary schemes are also to end, replaced by career average schemes, which will pay a retirement income linked to an employee’s average pay rather than their last salary. However, crucially, they still offer a guaranteed benefit in retirement and are not subject to stock market fluctuations or fees.