Unsustainable public sector pensions

[sidicks]

crankedup said:

I'm no advocate of the 'race to the bottom'. I do not accept that higher taxes are loaded onto the Private Sector simply to feed the Public Sector pensions, although inevitably those pensions are fed from the taxation purse of course.

I'm not sure I understand - these costs are borne by the private sector and necessarily result in less money being spent elsewhere.

crankedup said:

Perhaps when the multi Nationals pay their taxes in full it will ease the burden.

Do you mean when the tax rules are changed regarding multinational companies and assuming that retaliatory changes made by other governments do not offset the impact?!

crankedup said:

We were talking about Government subsidies to Private Companies earlier in the thread, I am not convinced that these subsidies offer good value for tax payers and suggested that perhaps, given the importance of the rail service, this should be brought back into Public ownership, rather than continuous of subsidises that benefit shareholders. Just saying that there are two sides to a coin.

As with my response previously - this is a separate issue and two wrongs don't make a right. Having said that, I'm not sure the previous history of public ownership of railways would fill anyone with confidence...

crankedup said:

Are Public Service pensions fantastic, or are they part and parcel of the overall remuneration package. Remove the pension scheme to new entrants but increase the basic salaries?

For every £ invested in the pension scheme by the employee the taxpayer pays £3 (on average) - that's 'fantastic' in my opinion.

I think an employer should endeavour to provide some form of pension saving plan for employees - this is now compulsory for private sector employers. I do not believe that removing pension benefits entirely is for or appropriate.

However, as I proposed above, a 1 for 1 matching approach would be more reasonable, with a fixed taxpayer contribution of (say 5%).

Of course they are part of the 'overall remuneration package' and were justifiable when they were genuine compensation for lower salaries in the public sector. According to most credible research, this is no longer the case and the public sector has caught up in terms of base salaries (on average for comparable roles) yet the pension benefits remain. Worse, in fact, the lesser DB schemes of the private sector have been removed and replaced with less valuable DC schemes.

We may need to move to a situation that certain professions within the public sector get DB schemes but other don't. So you might still offer DB schemes to nurses and doctors but not to admin staff, for example.

crankedup said:

The other point I would like to make is that since the private sector have suffered the loss of worthwhile pension scheme's we have witnessed the huge growth in 'Buy to Let' housing. Seems to me that the two issues are linked with many new landlords buying into the 'Buy to let' industry as a means of securing a decent pension for themselves. The downside is those young people now cannot compete with landlords in securing low cost housing, Just another side issue relating to our changing Social Status and this issue directly related to 'affordability' of pensions by Public and Private sector employers. This my appear convoluted perhaps, but I believe it to be relevant.

I'd certainly agree that if the private sector could access the same DB schemes as the public sector (for the same contribution rates!) then people would be mad to use buy-to-let as a retirement solution!

Edited by sidicks on Monday 30th November 14:56

[sidicks]

crankedup said:

But isn't it a matter of priority choice for the Government, instead of pouring billions of pounds into foreign hands pour some of it into the public sector pensions. The Government has an obligation to meet the past agreements made regarding these current pensions. Sure, lower the expectations of new employee's regarding a pension, I see no other solution, although I hate 'race to the bottom' solutions. Lowering the overall T& C of Public Sector jobs and vocations could result in our best workers being lost to other employers though, ultimately reducing or eroding the quality of services provided.

I've reiterated on numerous occasions that past accruals should be protected. I'm taking about future accruals (for existing employees) and accruals for new employees.

[sidicks]

johnxjsc1985 said:

the terms and conditions of local Gov employees have changed massively over the last 5 years as has their work load.but the avg pension is between £5k and £7k not £50k these are not people in the main who will be off to their Villa in Tuscany.
Dinner ladies, Teachers assistants, Social Workers are not earning huge salaries and will not be leaving with a bug fat pension.
the days of Local Gov staff retiring at 50 with a nice pay off and a good pension a rightly long gone its a different world out there.

If the pension is low that's because they've not worked for very long in the public sector I.e. few years of accrual and therefore minimal contributions!

The issue is the pension received compared to the contributions made.

[JagLover]

fblm said:

I don't think Sidicks (or any one here for that matter) has ever advocated anything else. Earned entitlements are just that; earned, the government agreed to those terms and they should and most likely will stick to that. Obviously that does not mean future entitlement accrual should, or can, stay the same. It won't be very long before children being born will expect to live past 100. The problem for those resisting further change now is that the longer the situation is allowed to get worse the more likely future governments will be forced to default on those previous earned entitlements. They really will squeal then!

120 if you believe this article

http://www.telegraph.co.uk/news/science/science-ne...

The public sector would still want to retire at 60 on 2/3 salary though

[johnxjsc1985]

sidicks said:

If the pension is low that's because they've not worked for very long in the public sector I.e. few years of accrual and therefore minimal contributions!

The issue is the pension received compared to the contributions made.

The Average pension is between £5k and £7k how hard is that to understand.

[Rovinghawk]

johnxjsc1985 said:

The Average pension is between £5k and £7k how hard is that to understand.

It's easy to understand.

What's the average length of service & contributions to receive that average pension?

[JagLover]

johnxjsc1985 said:

The Average pension is between £5k and £7k how hard is that to understand.

My wife is one of the many hundreds of thousands dragging down that average. Around 3 years worked (before moving to a private sector job), pension entitlement £1.2K a year starting sometime in the mid 2040s

[r11co]

sidicks said:

r11co said:

How exactly does that square up with your invoking of the 'poorest in society' justification earlier in the thread?

Very easily, given that the 'poorest in society' are unlikely to be in receipt of public sector final salary DB scheme pensions...

Some of the 'poorest in society' are people living off a basic state pension that is less than the maximum rate because they have (often willingly) made insufficient NI contributions.

Others are people who, when they had money, chose to piss their earnings up the wall rather than plan for their future.

Would it be equitable to boost their income from the savings you envisage?

I'm not expressing an opinion either way, but that little conundrum kind of blows your altruism out of the water....

Edited by r11co on Monday 30th November 15:47

[johnxjsc1985]

JagLover said:

My wife is one of the many hundreds of thousands dragging down that average. Around 3 years worked (before moving to a private sector job), pension entitlement £1.2K a year starting sometime in the mid 2040s

actually works the other way apparently the current pensioners rate is inflated by some of the big hitters.
~I really think this conversation is 5 years out of date this sector is being pruned daily and it will continue to shrink over the next 5 years at least.

[Rovinghawk]

JagLover said:

My wife is one of the many hundreds of thousands dragging down that average. Around 3 years worked (before moving to a private sector job), pension entitlement £1.2K a year starting sometime in the mid 2040s

For clarity: how much were the contributions?

[r11co]

johnxjsc1985 said:

I really think this conversation is 5 years out of date this sector is being pruned daily and it will continue to shrink over the next 5 years at least.

[V8 Fettler]

JagLover said:

fblm said:

I don't think Sidicks (or any one here for that matter) has ever advocated anything else. Earned entitlements are just that; earned, the government agreed to those terms and they should and most likely will stick to that. Obviously that does not mean future entitlement accrual should, or can, stay the same. It won't be very long before children being born will expect to live past 100. The problem for those resisting further change now is that the longer the situation is allowed to get worse the more likely future governments will be forced to default on those previous earned entitlements. They really will squeal then!

120 if you believe this article

http://www.telegraph.co.uk/news/science/science-ne...

The public sector would still want to retire at 60 on 2/3 salary though

The obesity epidemic will more than outweigh the benefits of modern drugs.

[sidicks]

r11co said:

Some of the 'poorest in society' are people living off a basic state pension that is less than the maximum rate because they have (often willingly) made insufficient NI contributions.

Others are people who, when they had money, chose to piss their earnings up the wall rather than plan for their future.

Would it be equitable to boost their income from the savings you envisage?

I'm not expressing an opinion either way, but that little conundrum kind of blows your altruism out of the water....

Edited by r11co on Monday 30th November 15:47

When we provide benefits to the poorest in society at the moment, do we differentiate between those that have no money due to their own fault and the others? No we do not.

So your comment about equality is irrelevant (unless you believe that we should provide benefits of any sort as some 'undeserving' people will benefit?!

[PugwasHDJ80]

r11co said:

sidicks said:

A decade of training and 20+ years of expertise is why I'm right.

How frustrating it must be for you then that things don't follow your righteous path.

sidicks said:

r11co said:

You are a sociopath and a prig.

Laughable, seriously laughable.

Anyone who knows what those two words actually mean will find ample evidence in this thread to suggest you fit both categories. I don't need to explain myself - your behaviour does the talking.

its not about being righteous, its about some not so simple mathematics.

there is a whole industry, called actuaries, specifically trained to carry out the calculations referenced in this thread.

No one is actully being a prig- i'm really sorry, but unfortunately you don't have the pre-requisite knowledge to understand this- its like a doctor trying to explain a very complex medical procedure- i (well actually i do, but most people) don't have the basic understanding of medical science to allow them to understand the procedure. There are many many topics in life like this.

The key point is related to the "time value of money".

Would you rather have £5 today, or £50 in 5 years time? How do you work out which is better as that is the choice you are making with pensions.

for pensions you need to ensure that you have enough cash built up in your pension to pay out all the money you will need until death.

In the private sector it is illegal to do what the governent and NHS does. Not immoral. Illegal. Directors get locked up for doing it.

I'm really sorry that you don't have the basic knowledge to understand the discussion that's going on here, and i'm happy to try and give you that knowledge, but at the momnent you seem to think we having an ideological discussion, when we really aren't.

[worsy]

johnxjsc1985 said:

JagLover said:

My wife is one of the many hundreds of thousands dragging down that average. Around 3 years worked (before moving to a private sector job), pension entitlement £1.2K a year starting sometime in the mid 2040s

actually works the other way apparently the current pensioners rate is inflated by some of the big hitters.
~I really think this conversation is 5 years out of date this sector is being pruned daily and it will continue to shrink over the next 5 years at least.

I've got a similar pension from 7 years working for the civil service. JagLover's wife must have been on big bucks

[sidicks]

worsy said:

I've got a similar pension from 7 years working for the civil service. JagLover's wife must have been on big bucks

How much did you pay in contributions over the period?

[anonymous-user]

johnxjsc1985 said:

The Average pension is between £5k and £7k how hard is that to understand.

You're right, it's not hard to understand, which makes your failure to, quite sad. It's an idiotic average used by the usual wonks to defend public sector pensions and not just in the UK. That 'average' includes hundreds of thousands with only partial benefits and those with the bare minimum number of months public service!

[worsy]

sidicks said:

worsy said:

I've got a similar pension from 7 years working for the civil service. JagLover's wife must have been on big bucks

How much did you pay in contributions over the period?

I've no idea. I think I still have my old payslips for nostalgia but it was over 25 years ago.

Actually it was just short of 5 years rather than 7.

[markcoznottz]

crankedup said:

sidicks said:

crankedup said:

Agreed, changes to the pension system are being made. The sustainability of the pensions forces the issue, however, I mentioned earlier in this thread that U.K. prosperity may continue to recover and improve to a point allowing the pensions within both sectors to be re-visited with a positive outcome for workers. I doubt any person wants to see poor pensioners in future years which will only continue to widen the wealth gap.

Isn't that just the 'race to the bottom' argument?

We won't make private sector pensions any better by forcing higher and higher taxes on the private sector to fund fantastic pensions for the public sector. Quite the opposite in fact!

I'm no advocate of the 'race to the bottom'. I do not accept that higher taxes are loaded onto the Private Sector simply to feed the Public Sector pensions, although inevitably those pensions are fed from the taxation purse of course. Perhaps when the multi Nationals pay their taxes in full it will ease the burden.
We were talking about Government subsidies to Private Companies earlier in the thread, I am not convinced that these subsidies offer good value for tax payers and suggested that perhaps, given the importance of the rail service, this should be brought back into Public ownership, rather than continuous of subsidises that benefit shareholders. Just saying that there are two sides to a coin.

Are Public Service pensions fantastic, or are they part and parcel of the overall remuneration package. Remove the pension scheme to new entrants but increase the basic salaries?

The other point I would like to make is that since the private sector have suffered the loss of worthwhile pension scheme's we have witnessed the huge growth in 'Buy to Let' housing. Seems to me that the two issues are linked with many new landlords buying into the 'Buy to let' industry as a means of securing a decent pension for themselves. The downside is those young people now cannot compete with landlords in securing low cost housing, Just another side issue relating to our changing Social Status and this issue directly related to 'affordability' of pensions by Public and Private sector employers. This my appear convoluted perhaps, but I believe it to be relevant.

Brown should be hung for what he did. Asset bubbles are a direct result of zirp. How can a Porsche that was worth £25 k in 2004 now be worth £200 grand? Economic policy of the madhouse. Ditto property, all of this a result of zirp/ qe/ dismantling of the best private pension scheme in Europe. I notice some councils are chomping at the bit for council tax increases, yea that will end well won't it..... Given a large % is to pay pensions..if government won't increase interest rates, we cannot even start to address the structural problems

[r11co]

sidicks said:

When we provide benefits to the poorest in society at the moment, do we differentiate between those that have no money due to their own fault and the others? No we do not.

So your comment about equality is irrelevant (unless you believe that we should provide benefits of any sort as some 'undeserving' people will benefit?!

My point was to shoot a hole through your earlier altruism. Your reply proves my point - you don't care who else benefits, deserving or not, as long as your bogey of the public sector worker stops benefiting. This is a single issue argument for you, and the point has been made all along that you ignore connected issues.

Unintended consequences and all that.....