Public sector watch

[Randy Winkman]

Welshbeef said:

Randy Winkman said:

Young people think they're never going to be old.

True.

My old man made sure I was signed up to my first pension scheme on turning 18yo and ever since that has been maximised (if defined contribution up to the maximum where the company matches)

When I joined the Civil Service in 1984, the young people there used to be very aware of the fact that you could leave before you'd done 2 years and get your pension contributions back. In fact, I didn't, I'm still there now. But for the young people it was a talking point.

[Jockman]

Sheepshanks said:

Randy Winkman said:

Young people think they're never going to be old.

There's a bunch of reasons, but not the least of which is the contributions are hefty - I'm pretty sure both my kids are paying in the 10% area. And let's not forget that nurses are so hard up they're using food banks.

The NHS scheme has changed a couple of times, which shakes their confidence long term.

The other thing is that many think they'll leave so won't be there for long.

Just had a quick peek - they are foregoing a 14.3% Employer contribution for an effective 8% contribution (using your slightly inaccurate figure)

I suppose you make your choice and you live with it.

[sidicks]

Sheepshanks said:

There's a bunch of reasons, but not the least of which is the contributions are hefty - I'm pretty sure both my kids are paying in the 10% area. And let's not forget that nurses are so hard up they're using food banks.

Smiley duly noted!

Sheepshanks said:

The NHS scheme has changed a couple of times, which shakes their confidence long term.

Except that accrued benefits are protected, so that doesn't really make sense.

The other thing is that many think they'll leave so won't be there for long.

As above, benefits earned to date are protected, so that reason doesn't make sense either.

[sidicks]

Jockman said:

Just had a quick peek - they are foregoing a 14.3% Employer contribution for an effective 8% contribution (using your slightly inaccurate figure)

I suppose you make your choice and you live with it.

If only those 'employer' numbers were based in reality!

[Welshbeef]

Jockman said:

Just had a quick peek - they are foregoing a 14.3% Employer contribution for an effective 8% contribution (using your slightly inaccurate figure)

I suppose you make your choice and you live with it.

Wow jam today eh.

Cancel the smart phone
Cancel the sky
Cancel the gym membership walk in stead or burpees in the garden.

Two fewer pints a week every week.

[Sheepshanks]

sidicks said:

Except that accrued benefits are protected, so that doesn't really make sense.

I know when my wife's Civil Service pension changed her past years were worth less in the new scheme. Her pension is tiny but it would have been higher under the old scheme.

The NHS changes have been very complicated. I'm pretty sure on one of the changes there was a choice of whether to move or not and my daughter chose not to - I think connected to retirement date.

[Sheepshanks]

Randy Winkman said:

When I joined the Civil Service in 1984, the young people there used to be very aware of the fact that you could leave before you'd done 2 years and get your pension contributions back. In fact, I didn't, I'm still there now. But for the young people it was a talking point.

Maybe there are different schemes but I thought the original Classic scheme was non-contributory. IIRC there was a small deduction (1%?) but that was for life assurance.

But certainly in the private sector I took the pension refund from my second job and only didn't take it from the first as they refused it. I also cashed in a tax-free premium endowment at 5yrs when making my first house move. That was probably stupid too, but the surrender value was a huge multiple of the amount I'd paid and I needed the money for the next house move.

[Jockman]

Sheepshanks said:

I know when my wife's Civil Service pension changed her past years were worth less in the new scheme. Her pension is tiny but it would have been higher under the old scheme.

I think that may relate to Osborne's move from RPI to CPI.

http://www.civilservant.org.uk/information-pension...

[Sheepshanks]

Jockman said:

Sheepshanks said:

I know when my wife's Civil Service pension changed her past years were worth less in the new scheme. Her pension is tiny but it would have been higher under the old scheme.

I think that may relate to Osborne's move from RPI to CPI.

http://www.civilservant.org.uk/information-pension...

Hmmm.."This immediately reduced the value of all scheme benefits - including those benefits already accrued from past contributions - by around 15%."

So much for accrued benefits being protected.

My wife's retirement pre-dates that though. Her issue was that past whole years in the old scheme didn't count for whole years in the new scheme - so her qualifying years reduced.

[London424]

Sheepshanks said:

Jockman said:

Sheepshanks said:

I know when my wife's Civil Service pension changed her past years were worth less in the new scheme. Her pension is tiny but it would have been higher under the old scheme.

I think that may relate to Osborne's move from RPI to CPI.

http://www.civilservant.org.uk/information-pension...

Hmmm.."This immediately reduced the value of all scheme benefits - including those benefits already accrued from past contributions - by around 15%."

So much for accrued benefits being protected.

My wife's retirement pre-dates that though. Her issue was that past whole years in the old scheme didn't count for whole years in the new scheme - so her qualifying years reduced.

The way I read that is that the accrued benefits are protected. However, the way they accrue from that point forward changes.

[uknick]

Sheepshanks said:

Maybe there are different schemes but I thought the original Classic scheme was non-contributory. IIRC there was a small deduction (1%?) but that was for life assurance.
.

The original Classic Scheme has a 1%, and then 1.5%, contribution for the widow's pension entitlement, and, as far as I know was in place for many years before I joined in 1990.

But, if you retired with no spouse you had the choice of taking all your contributions back, less any tax relief you may have received.

So, and I can hear many PH poster's heads exploding at this thought, you can end up with a gold plated pension and pay nothing for it.

[Welshbeef]

uknick said:

The original Classic Scheme has a 1%, and then 1.5%, contribution for the widow's pension entitlement, and, as far as I know was in place for many years before I joined in 1990.

But, if you retired with no spouse you had the choice of taking all your contributions back, less any tax relief you may have received.

So, and I can hear many PH poster's heads exploding at this thought, you can end up with a gold plated pension and pay nothing for it.

Surely that cannot be correct?

[Jockman]

Welshbeef said:

uknick said:

The original Classic Scheme has a 1%, and then 1.5%, contribution for the widow's pension entitlement, and, as far as I know was in place for many years before I joined in 1990.

But, if you retired with no spouse you had the choice of taking all your contributions back, less any tax relief you may have received.

So, and I can hear many PH poster's heads exploding at this thought, you can end up with a gold plated pension and pay nothing for it.

Surely that cannot be correct?

Does it include Employer contributions?

[Sticks.]

Jockman said:

Welshbeef said:

uknick said:

The original Classic Scheme has a 1%, and then 1.5%, contribution for the widow's pension entitlement, and, as far as I know was in place for many years before I joined in 1990.

But, if you retired with no spouse you had the choice of taking all your contributions back, less any tax relief you may have received.

So, and I can hear many PH poster's heads exploding at this thought, you can end up with a gold plated pension and pay nothing for it.

Surely that cannot be correct?

Does it include Employer contributions?

I think there's confusion here. There was (still is?) a 'Widows and Orphans' benefit paid on the death of a serving CS but AIUI it's nothing to do with the CS pension.

Originally it was 1.5% deducted from men only, but when it moved to everyone paying, the rate reduced to 1%.

If you leave without family (not sure of the exact criteria) you get what you've put in back.

More here, Quick looks says it's voluntary now. http://www.csb.gov.hk/english/admin/retirement/132...

It'd be interesting to know how much the govt has made out of it over the years.

[Sheepshanks]

anonymous said:

[redacted]

That'll teach them to meddle in the NHS.

[uknick]

Sticks. said:

I think there's confusion here. There was (still is?) a 'Widows and Orphans' benefit paid on the death of a serving CS but AIUI it's nothing to do with the CS pension.

Originally it was 1.5% deducted from men only, but when it moved to everyone paying, the rate reduced to 1%.

If you leave without family (not sure of the exact criteria) you get what you've put in back.

More here, Quick looks says it's voluntary now. http://www.csb.gov.hk/english/admin/retirement/132...

It'd be interesting to know how much the govt has made out of it over the years.

I don't know what Department you worked for Sticks, but in MoD it was 1.5% when I left to join the DWP in 2009, and it was 1.5% when I retired in 2012.

It was 1% when I joined the Home Office in 1990 and increased at some time as part of one of the many pension reviews.

As you say there is much confusion about how the public sector pensions work and are funded, especially the question above about employer contributions being returned. But that's not surprising considering how many different pension schemes exist in the public sector. The civil service pension scheme alone had at least 4 when I left, and CARE scheme were only just arriving. When you consider within each schemes you had different rules depending on when you joined it's a miracle anybody can keep up.

[uknick]

Sticks. said:

More here, Quick looks says it's voluntary now. http://www.csb.gov.hk/english/admin/retirement/132...

Ah, I see you were part of the Hong Kong civil service. So I can't comment on how that scheme worked.

[uknick]

Welshbeef said:

Surely that cannot be correct?

It is, and I should know as I received a tidy sum back when I retired.

I'll probably be corrected on this, but I also think the amount received included something for lost interest on the time the civil service had the money. But, I can't swear by this as I didn't keep all my payslips going back 23 years.

[Jockman]

uknick said:

Welshbeef said:

Surely that cannot be correct?

It is, and I should know as I received a tidy sum back when I retired.

I'll probably be corrected on this, but I also think the amount received included something for lost interest on the time the civil service had the money. But, I can't swear by this as I didn't keep all my payslips going back 23 years.

Did you just receive your Employee contributions?

[Sheepshanks]

uknick said:

I'll probably be corrected on this, but I also think the amount received included something for lost interest on the time the civil service had the money. But, I can't swear by this as I didn't keep all my payslips going back 23 years.

It's correct - they were refunded with interest.