Unsustainable public sector pensions
Discussion
egor110 said:
Sway said:
... Which is still a hell of a lot more than most people in the private sector can achieve. The levels of benefits is just ridiculous, even now.
Funny how a lot of people who support these mental public sector schemes party when taxes are increased for landlords. That route was the ONLY remotely affordable way to fund a reasonable lifestyle during my twilight years, and now there simply isn't a way for me to do so, having not been in a position to get any properties with decent equity prior to the changes.
So, I'll work and run a business for decades, and not have a pot to piss in when I'm old regardless of what I do, yet those earning significantly less and in most cases doing normal jobs (so not frontline police /firemen/nurses) have a lovely payment each month.
So if the public sector pension is such a Big deal why not get a job in the public sector?Funny how a lot of people who support these mental public sector schemes party when taxes are increased for landlords. That route was the ONLY remotely affordable way to fund a reasonable lifestyle during my twilight years, and now there simply isn't a way for me to do so, having not been in a position to get any properties with decent equity prior to the changes.
So, I'll work and run a business for decades, and not have a pot to piss in when I'm old regardless of what I do, yet those earning significantly less and in most cases doing normal jobs (so not frontline police /firemen/nurses) have a lovely payment each month.
It's like me moaning I have to go out and work in all weathers, nobody is stopping me from changing jobs.
Yes, I could get a job in the public sector. However, my particular skills aren't wanted (indeed are actively resisted), as my skills increase the profitability of companies - something the public sector really don't care about (and I have peers working there, they hate it).
The point, is on what planet is it appropriate that someone with much lower income, in a greatly lesser skilled job, can easily afford a significantly better pension than I can? I'm sure Sidicks can give some numbers - let's say I can afford 12k a year into a pension pot, how much would an administrator for the council have to pay for a similar level of benefit? Bearing in mind that any employer's contributions come directly out of my dividends?
So, as pension schemes available to me are such poor value for money, what exactly should I do in order to create an income for the years where I cannot work? As far as I'm concerned there's only really one option - purchase an asset that generates it's own income. That option has effectively been killed.
Of course, I feel all warm and fuzzy about paying more taxes than the average salary each year, whilst being treated like some sort of slum landlord tosser for wanting a rental portfolio.
Sideicks point on life expectancy is relevant, but also remember that when these schemes were set up public sector salaries where low, when I started work (1969) no one wanted to work in the public sector as salaries were low, they attracted people by job for life and pensions, pension deferred the expense since as I said earlier they were never designed to be investment funded schemes, the problem is that salaries have grown without a cut back in other areas.
I assume he means who in their right mind would leave the public sector to enter private for, as you claim, worse T&C's?
sidicks said:
///ajd said:
///adj said:
I'm sure the people I've seen leave the public sector to be paid twice as much - if not more - in the private sector are just making it up. They left for the same pay, obviously.
LOL.
I'm sure you think your comments mean something relevant!LOL.
Sway said:
Yes, I could get a job in the public sector. However, my particular skills aren't wanted (indeed are actively resisted), as my skills increase the profitability of companies - something the public sector really don't care about (and I have peers working there, they hate it).
The point, is on what planet is it appropriate that someone with much lower income, in a greatly lesser skilled job, can easily afford a significantly better pension than I can? .
With your specialist skillset surely your employers are paying you enough to compensate for the less-than-adequate pension? The point, is on what planet is it appropriate that someone with much lower income, in a greatly lesser skilled job, can easily afford a significantly better pension than I can? .
I used to work in public sector. I completely agree that the pension is extremely good (and borderline ridiculous for people who get promoted quickly to senior posts). However, in most other respects, and especially once you start earning decent money, life in the private sector is much better. Better pay, better perks, better working conditions. It is surprising how so many well paid Directors seem envious of dinner ladies pensions. I'd guess the real reason you're not in the Public Sector is because you're not willing to do what they do.
Countdown said:
With your specialist skillset surely your employers are paying you enough to compensate for the less-than-adequate pension?
I used to work in public sector. I completely agree that the pension is extremely good (and borderline ridiculous for people who get promoted quickly to senior posts). However, in most other respects, and especially once you start earning decent money, life in the private sector is much better. Better pay, better perks, better working conditions. It is surprising how so many well paid Directors seem envious of dinner ladies pensions. I'd guess the real reason you're not in the Public Sector is because you're not willing to do what they do.
Once again the claim of envy is made (without justification).I used to work in public sector. I completely agree that the pension is extremely good (and borderline ridiculous for people who get promoted quickly to senior posts). However, in most other respects, and especially once you start earning decent money, life in the private sector is much better. Better pay, better perks, better working conditions. It is surprising how so many well paid Directors seem envious of dinner ladies pensions. I'd guess the real reason you're not in the Public Sector is because you're not willing to do what they do.
You fail to answer why it is fair that the lowest paid in the private sector, who cannot afford to fund pensions of their own, are incurring higher taxes (and receiving lower public services) due to having to subsidise gold-plates pensions for people who earn more than they do.
There is a massive burden being left for future generations.
sidicks said:
Once again the claim of envy is made (without justification).
You fail to answer why it is fair that the lowest paid in the private sector, who cannot afford to fund pensions of their own, are incurring higher taxes (and receiving lower public services) due to having to subsidise gold-plates pensions for people who earn more than they do.
There is a massive burden being left for future generations.
Because that's the deal the public sector employees signed up for. I don't work in the public sector because I get better pay and conditions in the private sector. I also don't have to put up with people thinking they own me as they pay tax. You fail to answer why it is fair that the lowest paid in the private sector, who cannot afford to fund pensions of their own, are incurring higher taxes (and receiving lower public services) due to having to subsidise gold-plates pensions for people who earn more than they do.
There is a massive burden being left for future generations.
It's odd that it's always the same few posters complaining about doctors or teachers or any other public sector workers. It's clearly ideological dogma rather than any concern about future generations.
el stovey said:
Because that's the deal the public sector employees signed up for. I don't work in the public sector because I get better pay and conditions in the private sector. I also don't have to put up with people thinking they own me as they pay tax.
The world has changed and therefore the terms of employment need to change too - that's just basic economics.el stovey said:
It's odd that it's always the same few posters complaining about doctors or teachers or any other public sector workers. It's clearly ideological dogma rather than any concern about future generations.
You're 'clearly' wrong (unless you mean the 'ideological dogma' of believing in a sustainable and fair economy)??!!It's also quite clear (as demonstrated on here) that most public sector workers don't appreciate the value of the pension benefit they receive, so it should be relatively easy to increase salaries, reduce pension benefits and still save the country money (which could be used to increase public services etc).
Edited by sidicks on Friday 27th November 08:06
Edited by sidicks on Friday 27th November 08:08
Countdown said:
With your specialist skillset surely your employers are paying you enough to compensate for the less-than-adequate pension?
I used to work in public sector. I completely agree that the pension is extremely good (and borderline ridiculous for people who get promoted quickly to senior posts). However, in most other respects, and especially once you start earning decent money, life in the private sector is much better. Better pay, better perks, better working conditions. It is surprising how so many well paid Directors seem envious of dinner ladies pensions. I'd guess the real reason you're not in the Public Sector is because you're not willing to do what they do.
Once again, you've completely missed the point. I used to work in public sector. I completely agree that the pension is extremely good (and borderline ridiculous for people who get promoted quickly to senior posts). However, in most other respects, and especially once you start earning decent money, life in the private sector is much better. Better pay, better perks, better working conditions. It is surprising how so many well paid Directors seem envious of dinner ladies pensions. I'd guess the real reason you're not in the Public Sector is because you're not willing to do what they do.
Let's use some real numbers/scenarios. Hopefully Sidicks won't mind crunching the results.
I am my own employer. The nature of my work is as a consultant, so it would be stupid for any of my clients to employ me long term. For the record, my run rate over the last decade is £100 saving of costs for every £1 my company charges, with zero redundancies and a required improvement in customer service.
Take my circumstances against those of a administrative team leader in a council office, earning £25k a year. That equates to the sum I pay in tax (total, including personal taxation, Corp tax and VAT) - that's increasing from next year to almost double that.
So, they put aside 10% of their gross salary each year. £2.5k. My 10% (which remember is the equivalent of my employees and my employers contributions) is £10k. We're both 33, and let's assume zero pay increases or inflation to keep things simple. After another 30 years they will have paid in £75k, I will have put in £300k. Plus I will have paid many more multiples of their tax.
What annual income can they expect, and what could I get?
Oh, and I'm not envious. I'm angry. That I have to pay significant sums of tax in order to fund the late years lifestyle of the many tens of thousands in the public sector who aren't police, doctors, firemen or teachers. The many tens of thousands who do 'normal' office jobs, with little to no value for the customer - the taxpayer. Using the few emotive roles which are a drop in the ocean of the public sector employee mix undermines the argument, and is merely a distraction technique to cover the many, many more individuals who offer little.
Sway said:
Once again, you've completely missed the point.
Let's use some real numbers/scenarios. Hopefully Sidicks won't mind crunching the results.
I am my own employer. The nature of my work is as a consultant, so it would be stupid for any of my clients to employ me long term. For the record, my run rate over the last decade is £100 saving of costs for every £1 my company charges, with zero redundancies and a required improvement in customer service.
Take my circumstances against those of a administrative team leader in a council office, earning £25k a year. That equates to the sum I pay in tax (total, including personal taxation, Corp tax and VAT) - that's increasing from next year to almost double that.
So, they put aside 10% of their gross salary each year. £2.5k. My 10% (which remember is the equivalent of my employees and my employers contributions) is £10k. We're both 33, and let's assume zero pay increases or inflation to keep things simple. After another 30 years they will have paid in £75k, I will have put in £300k. Plus I will have paid many more multiples of their tax.
What annual income can they expect, and what could I get?
Oh, and I'm not envious. I'm angry. That I have to pay significant sums of tax in order to fund the late years lifestyle of the many tens of thousands in the public sector who aren't police, doctors, firemen or teachers. The many tens of thousands who do 'normal' office jobs, with little to no value for the customer - the taxpayer. Using the few emotive roles which are a drop in the ocean of the public sector employee mix undermines the argument, and is merely a distraction technique to cover the many, many more individuals who offer little.
Very broadly, the typical DB scheme that public sector employees would pay circa 10% for, would cost a private sector employee 35-40% p.a. (and would still leave them exposed to investment risk, inflation risk, interest rate risk and longevity risk).Let's use some real numbers/scenarios. Hopefully Sidicks won't mind crunching the results.
I am my own employer. The nature of my work is as a consultant, so it would be stupid for any of my clients to employ me long term. For the record, my run rate over the last decade is £100 saving of costs for every £1 my company charges, with zero redundancies and a required improvement in customer service.
Take my circumstances against those of a administrative team leader in a council office, earning £25k a year. That equates to the sum I pay in tax (total, including personal taxation, Corp tax and VAT) - that's increasing from next year to almost double that.
So, they put aside 10% of their gross salary each year. £2.5k. My 10% (which remember is the equivalent of my employees and my employers contributions) is £10k. We're both 33, and let's assume zero pay increases or inflation to keep things simple. After another 30 years they will have paid in £75k, I will have put in £300k. Plus I will have paid many more multiples of their tax.
What annual income can they expect, and what could I get?
Oh, and I'm not envious. I'm angry. That I have to pay significant sums of tax in order to fund the late years lifestyle of the many tens of thousands in the public sector who aren't police, doctors, firemen or teachers. The many tens of thousands who do 'normal' office jobs, with little to no value for the customer - the taxpayer. Using the few emotive roles which are a drop in the ocean of the public sector employee mix undermines the argument, and is merely a distraction technique to cover the many, many more individuals who offer little.
Sway said:
Countdown said:
With your specialist skillset surely your employers are paying you enough to compensate for the less-than-adequate pension?
I used to work in public sector. I completely agree that the pension is extremely good (and borderline ridiculous for people who get promoted quickly to senior posts). However, in most other respects, and especially once you start earning decent money, life in the private sector is much better. Better pay, better perks, better working conditions. It is surprising how so many well paid Directors seem envious of dinner ladies pensions. I'd guess the real reason you're not in the Public Sector is because you're not willing to do what they do.
Once again, you've completely missed the point. I used to work in public sector. I completely agree that the pension is extremely good (and borderline ridiculous for people who get promoted quickly to senior posts). However, in most other respects, and especially once you start earning decent money, life in the private sector is much better. Better pay, better perks, better working conditions. It is surprising how so many well paid Directors seem envious of dinner ladies pensions. I'd guess the real reason you're not in the Public Sector is because you're not willing to do what they do.
Let's use some real numbers/scenarios. Hopefully Sidicks won't mind crunching the results.
I am my own employer. The nature of my work is as a consultant, so it would be stupid for any of my clients to employ me long term. For the record, my run rate over the last decade is £100 saving of costs for every £1 my company charges, with zero redundancies and a required improvement in customer service.
Take my circumstances against those of a administrative team leader in a council office, earning £25k a year. That equates to the sum I pay in tax (total, including personal taxation, Corp tax and VAT) - that's increasing from next year to almost double that.
So, they put aside 10% of their gross salary each year. £2.5k. My 10% (which remember is the equivalent of my employees and my employers contributions) is £10k. We're both 33, and let's assume zero pay increases or inflation to keep things simple. After another 30 years they will have paid in £75k, I will have put in £300k. Plus I will have paid many more multiples of their tax.
What annual income can they expect, and what could I get?
Oh, and I'm not envious. I'm angry. That I have to pay significant sums of tax in order to fund the late years lifestyle of the many tens of thousands in the public sector who aren't police, doctors, firemen or teachers. The many tens of thousands who do 'normal' office jobs, with little to no value for the customer - the taxpayer. Using the few emotive roles which are a drop in the ocean of the public sector employee mix undermines the argument, and is merely a distraction technique to cover the many, many more individuals who offer little.
You also say there are all these public sector office jobs, how about the other end of the scale like the binmen, social workers,council care home staff.
I'm not so sure after the last load of government cuts there are many desk pilots left and if there are I'm pretty sure there workload has vastly increased.
sidicks said:
Once again the claim of envy is made (without justification).
The claim is made based on the number of threads whinging about Public Sector pensions. Why is it specifically PS pensions that causes such disgruntlement? if it's because these costs are having to be met by taxpayers then surely we should be looking at the TOTAL COST of public sector services?. For example - how much are we paying for NHS servives and how does this compare to the private sector? How much are we paying for school places and how does this compare to the private sector? Or to equivalent OECD economies?sidicks said:
You fail to answer why it is fair that the lowest paid in the private sector, who cannot afford to fund pensions of their own, are incurring higher taxes (and receiving lower public services) due to having to subsidise gold-plates pensions for people who earn more than they do.
Well, no, that's not strictly true. The lowest paid in the private sector will either be paying no tax at all OR will be taking out far more than they are paying in terms of Public Services. So they're NOT subsidising the gold plated pensions, are they?By the way the taxpayer is subsidising private sector employers via taxpayer funded) tax credits. Does that seem fair to you? And the "lowest paid in the private sector" will also have a guaranteed minimum state pension even if their salaries don't generate enough NI to fund it? Another example of private sector employers/shareholders relying on the State to act as a safety net so they can extract dividends.
Rovinghawk said:
In short, many can't afford a decent pension as they're busy paying for the very generous pensions of others.
Or maybe there paying mortgages or car finance deals on things they can't actually afford , rather than having a smaller house or older car and paying more into there pension.Nowadays it's all about keeping up with the jones's.
egor110 said:
We all made a career choices , it seems now your getting on a bit your throwing your toys out the pram because pension wise you made the wrong choice.
You also say there are all these public sector office jobs, how about the other end of the scale like the binmen, social workers,council care home staff.
I'm not so sure after the last load of government cuts there are many desk pilots left and if there are I'm pretty sure there workload has vastly increased.
For me at least it has absolutely nothing to do with career choices. I made mine and am comfortable with them.You also say there are all these public sector office jobs, how about the other end of the scale like the binmen, social workers,council care home staff.
I'm not so sure after the last load of government cuts there are many desk pilots left and if there are I'm pretty sure there workload has vastly increased.
It has nothing to do with envy. See above.
This is straightforward, simple economics. The schemes that (many) public sector workers are in are not affordable or sustainable on a long term basis. The approach the private sector has taken faced with the same dilemma is to adjust the schemes, whether people signed up to something different or not. Insisting that you remain on an unaffordable scheme would result in the most Pyrrhic of victories.
The govt should be doing the same thing with the pensions it provides its workers and the people in them should accept the reality of what are ultimately very simple figures and calculations (the stick sidicks gets is unreal - his approach can get a bit antsy, but I've noticed that develop over time when the same uninformed carp is trotted out by people who can't understand the numbers).
My primary concern is that the large amounts of tax I pay into the system are spent wisely and sustainably (ie affordably) - this is no different to all the other services I buy. Right now it is not, and pensions are one area of levelling that could and should be made.
I'm also not targeting that at dinner ladies and nurses. It grates with me that our "leaders" (MPs) do not lead by example on nigh on every front. I'd be starting with them....but there are so few of them that quickly the focus would need to move to everyone else in the public sector.
Countdown said:
Well, no, that's not strictly true. The lowest paid in the private sector will either be paying no tax at all OR will be taking out far more than they are paying in terms of Public Services. So they're NOT subsidising the gold plated pensions, are they?
They still pay taxes (VAT etc) which could otherwise be lower.Countdown said:
By the way the taxpayer is subsidising private sector employers via taxpayer funded) tax credits. Does that seem fair to you? And the "lowest paid in the private sector" will also have a guaranteed minimum state pension even if their salaries don't generate enough NI to fund it? Another example of private sector employers/shareholders relying on the State to act as a safety net so they can extract dividends.
Do two wrongs make a right?The state sees fit to tax employees on minimum wage (and then have to top up those wages with tax credits). Part of Gordon Brown's welfare state.
egor110 said:
Or maybe there paying mortgages or car finance deals on things they can't actually afford , rather than having a smaller house or older car and paying more into there pension.
Nowadays it's all about keeping up with the jones's.
So they should have a smaller house/older car in order to fund both their own adequate pension & somebody else's better one?Nowadays it's all about keeping up with the jones's.
Rovinghawk said:
In short, many can't afford a decent pension as they're busy paying for the very generous pensions of others.
That's it in a nutshell really, isn't it?As a society, surely our ultimate aim should be that all workers can retire at a sensible age and be able to enjoy a decent standard of living. What we have at the moment is a two-tier system where those with the least generous pensions subsidise those with the most generous.
If, as plenty of posters have argued across the various thread on this topic, there's no need to reduce the cost of public sector pensions since it is sustainable, then at the very least, surely we should be spreading the benefits a little more widely across society.
So reduce future accrual of benefits for public sector workers but increase the Basic State Pension for everyone. Why that would be in any way unfair or controversial is totally beyond me. But of course that assumes that the cost is sustainable and I'm not sure it is.
Rovinghawk said:
egor110 said:
Or maybe there paying mortgages or car finance deals on things they can't actually afford , rather than having a smaller house or older car and paying more into there pension.
Nowadays it's all about keeping up with the jones's.
So they should have a smaller house/older car in order to fund both their own adequate pension & somebody else's better one?Nowadays it's all about keeping up with the jones's.
We can go on about this all day but nothing is going to change, George Osbourne's not trawling over a motoring forum looking for his next budget cuts.
Rovinghawk said:
In short, many can't afford a decent pension as they're busy paying for the very generous pensions of others.
I see your issue, you're imagining your tax share is going exclusively to pay for the things you disagree with. In this case public sector pensions. That makes you angry and you feel justified in wanting their lot reduced. Why not imagine your tax goes entirely towards stuff you approve of or make use of? Then you will be less angry.
Either way, your tax contributions won't decrease if public sector pensions are decimated.
sidicks said:
Countdown said:
Well, no, that's not strictly true. The lowest paid in the private sector will either be paying no tax at all OR will be taking out far more than they are paying in terms of Public Services. So they're NOT subsidising the gold plated pensions, are they?
They still pay taxes (VAT etc) which could otherwise be lower.sidicks said:
Do two wrongs make a right?
The state sees fit to tax employees on minimum wage (and then have to top up those wages with tax credits). Part of Gordon Brown's welfare state.
I don't think two wrongs make a right. It's just that only one of the two wrongs seems to attract the ire of some on here. Hopefully, with the move to the NLW, we will have less subsidising of employers via the use of tax credits and other associated benefits.The state sees fit to tax employees on minimum wage (and then have to top up those wages with tax credits). Part of Gordon Brown's welfare state.
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