Half a million public sector job cuts tomorrow.....

[Silver993tt]

sidicks said:

Silver993tt said:

Actually, yes for all final salary pensions. The point being that with a final salary pension, most will be taking out more that they put in (incl investment growth).

Of course they will be taking out more than they put in - in 99.99% of cases the final salary schemes are sponsored by the employer who also makes contributions. Lower interest rates and improving longevity have meant these schemes are becoming more and more expensive. As employees don't want (or can't afford) to make higher contributions that has led to increasing employer contributions which are now no longer affordable.

If the employee can't make the necesary contributions and the employer can't afford any more, how will the payments be funded?

sidicks said:

Silver993tt said:

Therefore it is extremely unfair since getting more than one puts in only leads to someone else having to pay for the shortfall - that's theft from someone else, so retrospective deduction would be fully justified.

You clearly have no idea how these schemes work!
As above, benefts are fixed, it is effectively just the employer's (or government, in the case of a public sector scheme) costs that are variable, there is no cross subsidy between employees.

I know exactly how these are funded. They are funded by tax payers in the private sector where there contributions rather than being spent on infrastructure/service for the community are going increasingly to support unsustainable public sector final salary schemes.

sidicks said:

Silver993tt said:

I've nothing against pensions at all but I believe that taking from what one put in is the only option.

Which is why most private sector schemes are moving to money purchase arrangements, but as most employees won't be prepared to pay higher contributions, the benefts they will receive on retiterment will be much lower.

as should also be in the public sector since these are funded by the tax payer unlike those in the private sector.

sidicks said:

Silver993tt said:

Otherwise it becomes a house of cards, proven by the current situation in large companies such as BA, BT and many others where there is a massive pension liabilities. This wouldn't be the case if final salary pensions weren't offered in the first place.

Nothing wrong with a final salary pension scheme, providing the scheme sponsor (employer) and members (employees) are prepared to pay the costs. They would them still beneft of some pooling of risk.

The downside is that both employees and employers would need to be content with making contributions at a rate of around 17.5% of salary each !!!!

Sidicks

exactly, so when the employee in the public sector can't afford the payments to meet these expectations, the employer (government in this case) simply uses the tax paid by the private sector to fund the schemes, which is the whole point I've been making - taking out more than you can afford to put in on a not like-for-like basis (private v public).

[sidicks]

Silver993tt said:

sidicks said:

What's been earned to date should be set-aside and a new money purchase scheme be set up for future contributions.
Sidicks

That's the problem, it hasn't been 'earned'. The contributions paid by the employees/employers (plus any growth over that period) for final salary pensions aren't in any way enough to cover the payments for these people over many years. So where is this to come from if not from other peoples income?

As discussed, the sponsor (employer for private final salary schemes and government for public sector schemes) set the terms of the scheme and the employee's contributions. The 'deal' was they would pay the balance.

The employees part of the deal was to work for the company / state to accrue the pension and pay the agreed contributions. Having done so, they have earned their pensions. It is the sponsor's fault if the employee contribution rate was insufficient.

Going forward the sponsor can amend the scheme (i.e. increase the employee contributions to the 'correct' level, and as has been discussed previously, these would be unaffordable for most employees) or withdraw the scheme for future accrual (which is what most sensible people are proposing).


Sidicks

[Silver993tt]

sidicks said:

Silver993tt said:

sidicks said:

What's been earned to date should be set-aside and a new money purchase scheme be set up for future contributions.
Sidicks

That's the problem, it hasn't been 'earned'. The contributions paid by the employees/employers (plus any growth over that period) for final salary pensions aren't in any way enough to cover the payments for these people over many years. So where is this to come from if not from other peoples income?

As discussed, the sponsor (employer for private final salary schemes and government for public sector schemes) set the terms of the scheme and the employee's contributions. The 'deal' was they would pay the balance.

The employees part of the deal was to work for the company / state to accrue the pension and pay the agreed contributions. Having done so, they have earned their pensions. It is the sponsor's fault if the employee contribution rate was insufficient.

Going forward the sponsor can amend the scheme (i.e. increase the employee contributions to the 'correct' level, and as has been discussed previously, these would be unaffordable for most employees) or withdraw the scheme for future accrual (which is what most sensible people are proposing).


Sidicks

so for past final salary schemes which were clearly unaffordable, the government will continue to increasing amounts of tax payers contributions to fund them?

[sidicks]

Silver993tt said:

If the employee can't make the necesary contributions and the employer can't afford any more, how will the payments be funded?

While the employer is still solvent, the employer has a legal obligation to fund the benefits accrued to date.

Silver993tt said:

exactly, so when the employee in the public sector can't afford the payments to meet these expectations, the employer (government in this case) simply uses the tax paid by the private sector to fund the schemes, which is the whole point I've been making - taking out more than you can afford to put in on a not like-for-like basis (private v public).

It should be exactly the same in public v private:

- Past contributions insufficient for benefits accrued to date, scheme sponsor / government (=taxpayer) makes up the shortfall.

- This is no longer sustainable for future benefits, so both private and public schemes should be removed for future accrual.


Sidicks

[sidicks]

Silver993tt said:

so for past final salary schemes which were clearly unaffordable, the government will continue to increasing amounts of tax payers contributions to fund them?

For the benefits already earned then yes clearly that should be the case. Just as it is for private sector schemes!!!

[Silver993tt]

sidicks said:

Silver993tt said:

If the employee can't make the necesary contributions and the employer can't afford any more, how will the payments be funded?

While the employer is still solvent, the employer has a legal obligation to fund the benefits accrued to date.

And if the company simply doesn't have the funds due to economic circumstances? Closing the company down won't fix the problem.

sidicks said:

Silver993tt said:

exactly, so when the employee in the public sector can't afford the payments to meet these expectations, the employer (government in this case) simply uses the tax paid by the private sector to fund the schemes, which is the whole point I've been making - taking out more than you can afford to put in on a not like-for-like basis (private v public).

It should be exactly the same in public v private:

- Past contributions insufficient for benefits accrued to date, scheme sponsor / government (=taxpayer) makes up the shortfall.

Again, my point is why should the tax payer bail out the public sector employee who never paid enough into a scheme to fund his/her final salary pension?

[Silver993tt]

sidicks said:

Silver993tt said:

so for past final salary schemes which were clearly unaffordable, the government will continue to increasing amounts of tax payers contributions to fund them?

For the benefits already earned then yes clearly that should be the case. Just as it is for private sector schemes!!!

the difference is that the private sector can pass the cost onto the price of their products/services. I as a customer can choose whether to buy these products/services at this increased cost or not and go to another private sector firm who hasn't had the need to pass on such costs. However, when I go to by a product/service from the public sector, I have no choice in, for example, who I have my rubbish collected with even if the cost has gone up to help fund the underfunded public sector final salary pensions - I can't go to a company directly who can give me a better deal (because they don't have a final salary pension issue to fund).

[Pupp]

Silver993tt said:

sidicks said:

Silver993tt said:

so for past final salary schemes which were clearly unaffordable, the government will continue to increasing amounts of tax payers contributions to fund them?

For the benefits already earned then yes clearly that should be the case. Just as it is for private sector schemes!!!

the difference is that the private sector can pass the cost onto the price of their products/services. I as a customer can choose whether to buy these products/services at this increased cost or not and go to another private sector firm who hasn't had the need to pass on such costs. However, when I go to by a product/service from the public sector, I have no choice in, for example, who I have my rubbish collected with even if the cost has gone up to help fund the underfunded public sector final salary pensions - I can't go to a company directly who can give me a better deal (because they don't have a final salary pension issue to fund).

Actually, if you're talking trade waste, you can.

And the local govt scheme is funded, so pretty crap examples on both counts

[F i F]

Pupp said:

Silver993tt said:

sidicks said:

Silver993tt said:

so for past final salary schemes which were clearly unaffordable, the government will continue to increasing amounts of tax payers contributions to fund them?

For the benefits already earned then yes clearly that should be the case. Just as it is for private sector schemes!!!

the difference is that the private sector can pass the cost onto the price of their products/services. I as a customer can choose whether to buy these products/services at this increased cost or not and go to another private sector firm who hasn't had the need to pass on such costs. However, when I go to by a product/service from the public sector, I have no choice in, for example, who I have my rubbish collected with even if the cost has gone up to help fund the underfunded public sector final salary pensions - I can't go to a company directly who can give me a better deal (because they don't have a final salary pension issue to fund).

Actually, if you're talking trade waste, you can.

And the local govt scheme is funded, so pretty crap examples on both counts

Also this pathetic all final salary schemes should be stopped, both private and public doesn't cater for a situation where a scheme isn't in deficit and all parties are prepared and can afford to continue paying the necessary contributions and the scheme sponsor is prepared to continue shouldering the risk considering the scheme member profile, mortality rates, etc etc etc.

As commented by others there really are some pathetic spiteful people on this thread, and increasingly on PH these days.

Takes LOA from forum.

[Sticks.]

F i F said:

As commented by others there really are some pathetic spiteful people on this thread, and increasingly on PH these days.

That seems true, unfortunately.

What's not said is that there's a high proportion of private sec workers who have no retiement provision at all and are therefore likely at retirement to be relying on the state.

[Silver993tt]

Pupp said:

Silver993tt said:

sidicks said:

Silver993tt said:

so for past final salary schemes which were clearly unaffordable, the government will continue to increasing amounts of tax payers contributions to fund them?

For the benefits already earned then yes clearly that should be the case. Just as it is for private sector schemes!!!

the difference is that the private sector can pass the cost onto the price of their products/services. I as a customer can choose whether to buy these products/services at this increased cost or not and go to another private sector firm who hasn't had the need to pass on such costs. However, when I go to by a product/service from the public sector, I have no choice in, for example, who I have my rubbish collected with even if the cost has gone up to help fund the underfunded public sector final salary pensions - I can't go to a company directly who can give me a better deal (because they don't have a final salary pension issue to fund).

Actually, if you're talking trade waste, you can.

And the local govt scheme is funded, so pretty crap examples on both counts

Perfectly valid examples that no one here can deny with a valid argument

The local government schemes are funded by tax payers money, not by the employees. If it were the employees and the originally agreed contribution by the local authority, there wouldn't be anywhere near enough in teh funds to continue paying final salary pensions for ongoing retirements.

Edited by Silver993tt on Sunday 24th October 17:41

[Silver993tt]

Sticks. said:

F i F said:

As commented by others there really are some pathetic spiteful people on this thread, and increasingly on PH these days.

That seems true, unfortunately.

What's not said is that there's a high proportion of private sec workers who have no retiement provision at all and are therefore likely at retirement to be relying on the state.

That may be the case but the contribution by the state will be a minute fraction compared to the final salary contributions (which will mostly be subsidised by lots of extra cash from the tax payer (most of whom are in the private sector)

[Rollin]

Can we have penalties for private companies who ripped off the misguided and overgenerous government with inflated costs for the work they did?

[Silver993tt]

Rollin said:

Can we have penalties for private companies who ripped off the misguided and overgenerous government with inflated costs for the work they did?

I'm sure the government departments put tmost contracts out to tender didn't they? I'm sure they didn't favour any particular companies for personal gain At the very least they could choose which company to buy from from very many in the market place. There isn't much competition for those who need to buy services from the public sector is there? They name their own price, it's called council tax isn't it? - no ifs, no buts, that's it you have to pay it whether you want the "service" or not otherwise it's straight to court and then prison (even if you're in your 80s). Very fair indeed.

[andyroo]

When you discover that the local authourity has a culture department that employs not five, not ten, but forty people, it's not hard to imagine why there are cuts. Yet the departments that were overworked have been understaffed for as long as I can remember.

[anonymous-user]

Silver993tt said:

Rollin said:

Can we have penalties for private companies who ripped off the misguided and overgenerous government with inflated costs for the work they did?

I'm sure the government departments put tmost contracts out to tender didn't they? I'm sure they didn't favour any particular companies for personal gain At the very least they could choose which company to buy from from very many in the market place. There isn't much competition for those who need to buy services from the public sector is there? They name their own price, it's called council tax isn't it? - no ifs, no buts, that's it you have to pay it whether you want the "service" or not otherwise it's straight to court and then prison (even if you're in your 80s). Very fair indeed.

only its not... why should all the public sector workers suffer because billy big balls council leader chose a company outside of a tender process to give a load of work to. both parties knew it was immoral but didnt care, one got the work, the other got the back hander, everyones happy.... sure they all made it look kosher, its not hard to fudge the paperwork to make it look like it was above board.... so these inflated contracts that the private sector were awarded, that the private sector then lament on account of reckless or poor government spending is neither, its just two parties abusing the systems. i see it all the time, especially in the defence sector where all our bally heroes suddenly get twitchy at the age of 52 and start getting extremely friendly with their counterparts in industry.....

i'm sick of private industry people here thinking that they are all whiter than white and that its the public sector or the labour governemnt who are wholly at fault for this situation, the private sector got the profits from the suspect business practices and know they dont like it because the money isnt there - but they cant blame the government they elected - and they have to rely on proper business acumen to make a profit.....

[Sticks.]

Silver993tt said:

Sticks. said:

F i F said:

As commented by others there really are some pathetic spiteful people on this thread, and increasingly on PH these days.

That seems true, unfortunately.

What's not said is that there's a high proportion of private sec workers who have no retiement provision at all and are therefore likely at retirement to be relying on the state.

That may be the case but the contribution by the state will be a minute fraction compared to the final salary contributions (which will mostly be subsidised by lots of extra cash from the tax payer (most of whom are in the private sector)

Even if it were minute, which I doubt, it'll be subsidisd by all taxpayers, including public sector ones. Do the maths. Size of total UK workforce minus pub sector then multiply that by (iirc Hutton said) 75% had no savings for retirement, let alone a pension. Ticking financial bomb everone's ignoring.

Not picking on you but we hear a lot from the sanctimonius pri sec, most of whom if they do nothing will join the ranks of the much-hated benefit scroungers when they retire.

[Rant mode off]

[Silver993tt]

Sticks. said:

Silver993tt said:

Sticks. said:

F i F said:

As commented by others there really are some pathetic spiteful people on this thread, and increasingly on PH these days.

That seems true, unfortunately.

What's not said is that there's a high proportion of private sec workers who have no retiement provision at all and are therefore likely at retirement to be relying on the state.

That may be the case but the contribution by the state will be a minute fraction compared to the final salary contributions (which will mostly be subsidised by lots of extra cash from the tax payer (most of whom are in the private sector)

Even if it were minute, which I doubt, it'll be subsidisd by all taxpayers, including public sector ones. Do the maths. Size of total UK workforce minus pub sector then multiply that by (iirc Hutton said) 75% had no savings for retirement, let alone a pension. Ticking financial bomb everone's ignoring.

Not picking on you but we hear a lot from the sanctimonius pri sec, most of whom if they do nothing will join the ranks of the much-hated benefit scroungers when they retire.

[Rant mode off]

Well, to behonest I got fed up quite a cfew years ago and upped sticks from the UK. I got fed up with situations such as having to pay towards the national health service even when I was paying quite a chunk each year into a private health plan. Where I am now if I have a private health plan I don't pay into the state one and that is a country with the largest economy in Europe, so no 3rd world country, in fact definitely more 1st world than the UK when it comes to individuals.

[doodlebug]

Sticks said:

...but we hear a lot from the sanctimonius pri sec, most of whom if they do nothing will join the ranks of the much-hated benefit scroungers when they retire.

Only because we've had to support the pub sec pension pot for so long that there isn't enough left for our own needs.

[markcoznottz]

Sticks. said:

F i F said:

As commented by others there really are some pathetic spiteful people on this thread, and increasingly on PH these days.

That seems true, unfortunately.

What's not said is that there's a high proportion of private sec workers who have no retiement provision at all and are therefore likely at retirement to be relying on the state.

Yes because Brown destroyed the best private pension scheme in Europe. And for your information for most private sector workers they are entitled to a state pension they themsleves have funded.