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ERIC Number: EJ842940
Record Type: Journal
Publication Date: 2009
Pages: 18
Abstractor: As Provided
Reference Count: 32
ISSN: ISSN-0963-8253
The Switch to Private Pension Plans for Teachers, 1982-2002: A Case of Freedom of Choice or Financial Scandal?
Griggs, Clive
FORUM: for promoting 3-19 comprehensive education, v51 n2 p241-258 2009
In the early 1980s the Conservative Administration introduced legislation to promote private personal pension plans for public sector workers. An army of commission-driven sales staff from the financial services industry sought to persuade teachers and others to abandon their inflation-proof pension schemes for those offered by private companies. It took some time before it was realised that this was a retrograde step for most employees taking this advice. Fortunately, trade unions were well represented within the public sector and they interceded on behalf of their members and exposed the fraudulent behaviour of established financial companies. The Financial Services Authority not only fined the financial services companies thousands of pounds but forced them to restore employees to the situation they would have been in if they had ignored the advice given earlier. This financial scandal took nearly 20 years to resolve satisfactorily. Teachers and other employees learned a hard lesson: most private companies put the profit motive before service to customers, they are not necessarily more efficient than the public sector and financial consultants are, in effect, sales persons whose advice is usually motivated by commission and bonus payments. Painful though the experience of many teachers had been, by the Autumn of 2008 the whole country would be shaken by the disastrous effects of a weakly regulated free market financial system. (Contains 1 table.)
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Publication Type: Journal Articles; Reports - Descriptive
Education Level: N/A
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: N/A
Identifiers - Location: United Kingdom