Unsustainable public sector pensions

[mph1977]

superlightr said:

sidicks said:

wc98 said:

probably a daft question, but i will ask anyway.in the article it says the nurse needs a pension pot of 2.2 million upon retirement to pay that 30k pension per year. assuming the nurse retires at 68 and lived to 98, that is only 900 k , even with inflation linked rises i cannot see how the nurse requires a pension pot worth 2.2 million ?

It's a pension of £30,700 from age 65, but I agree they appear to have miscalculated somewhere along the lines - even with a heroic RPI assumption I don't think you'd get beyond £1.5m at the most.

So certainly NO'T a daft question!

so ignore the Nurse and substitute - private worker. So for me to have a £30k income from 65yrs I need a pot of £1.5 million jezzzzz so thats about £25k a year for all of my working life put into a pension to equal about £1m + govt cont and growth.

To have a pension of 30,700 from the NHS scheme you'd have to be earning over 60k a year at retirement
which for None Medical Staff would be a band 8c role , something which in most trusts you wouldn't need to take your socks off to count up the numbers of Nursdes , midwives and AHPs in such roles ...

For those unaware the Nursing career pyramid is a narrow one and narrows profoundly about band 6 ... there is no assurance that people will progress beyond band 5 , especially given that many trusts down graded senior staff Nurses who were 'erroneously' banded in to band 6 on assimilation.

A salary of 30,700 basic is band 6 and a total wage of 30,700 represents the salary and variable pay amountso f of a mide scale band 5 working a rotational pattern including nights, regular weekends etc or a top of scale band 5 working occasional evenings and weekends...

[sidicks]

mph1977 said:

To have a pension of 30,700 from the NHS scheme you'd have to be earning over 60k a year at retirement
which for None Medical Staff would be a band 8c role , something which in most trusts you wouldn't need to take your socks off to count up the numbers of Nursdes , midwives and AHPs in such roles ...

For those unaware the Nursing career pyramid is a narrow one and narrows profoundly about band 6 ... there is no assurance that people will progress beyond band 5 , especially given that many trusts down graded senior staff Nurses who were 'erroneously' banded in to band 6 on assimilation.

A salary of 30,700 basic is band 6 and a total wage of 30,700 represents the salary and variable pay amountso f of a mide scale band 5 working a rotational pattern including nights, regular weekends etc or a top of scale band 5 working occasional evenings and weekends...

Yes and no - there are still people on the 1/60ths scheme, so you can still earn 2/3rds of salary as a pension, not just 50%.

And for those on the 1/80ths scheme there is also the 3/80ths lump sum which is often overlooked (when it suits people to do so) making the total benefit broadly equal to a 2/3rds salary final salary benefit...

[superlightr]

sidicks said:

CoolHands said:

Right. But index-linked pays out much less per year than a fixed annuity, so it will be a large number of years before the index-linked overtakes the fixed annuity depending on what measure you are looking at.

So the difference is not as significant as one may think or be led to believe; ie the rough figure of 500k above is not 'bad' or unviable in some way as may be perceived.

I think you're missing the point!

A public sector annuity for £30,700 increasing with inflation would cost in exceeds of £1m for a private consumer to purchase.

Yes thats what I was trying to work out. So I me my self would needed to have put away in a private pension about £25k a year for every working year of my life to get the same pension as said Nurse.

[sidicks]

superlightr said:

Yes thats what I was trying to work out. So I me my self would needed to have put away in a private pension about £25k a year for every working year of my life to get the same pension as said Nurse.

Yes £25k * 40 = £1m

But that ignores investment return on your money.

Probably better to think of it in terms of percentage of salary.

If you earned £25k each year (no inflation), then you'd need to contribute 32.5% of your gross salary every month to achieve a value of £1m on retirement (assuming 5% growth p.a).

If your salary increased at 3% per annum, you'd only need to contribute 21.5% of your salary to achieve the same value on retirement under the same assumptions. Note however that at retirement your final salary would be £80k, so the resultant Pension would be less than 40% of your final salary...

[CoolHands]

As has just been pointed out above no nurse would retire on a pension of £30,000.

[sidicks]

CoolHands said:

As has just been pointed out above no nurse would retire on a pension of £30,000.

As has been pointed out, that's not true. Plus in any case, it's irrelevant. The relationship between contributions made and pension received are still the same.

[CoolHands]

sidicks said:

CoolHands said:

As has just been pointed out above no nurse would retire on a pension of £30,000.

As has been pointed out, that's not true.

How many nurses earn £60k?

BTW my mother was nurse and guess what - surprise - neither she nor any of her colleagues earnt anywhere near that. For you to state nurse do is disingenuous.

[sidicks]

CoolHands said:

How many nurses earn £60k?

How many earn £45k?

CoolHands said:

BTW my mother was nurse and guess what - surprise - neither she nor any of her colleagues earnt anywhere near that. For you to state nurse do is disingenuous.

I've stated no such thing - please learn to read!

[mph1977]

sidicks said:

CoolHands said:

How many nurses earn £60k?

How many earn £45k?

CoolHands said:

BTW my mother was nurse and guess what - surprise - neither she nor any of her colleagues earnt anywhere near that. For you to state nurse do is disingenuous.

I've stated no such thing - please learn to read!

i think you did ...

45 k is still a hell of a lot for nurse ...


http://www.nhsemployers.org/~/media/Employers/Docu...

band 8 a or 8 b as basic

achieveable for the tiny numbers of band 7s who work fully rotational shifts

[FiF]

I don't think anyone has suggested these levels of pay are those typically for nurses. Wouldn't a nurse in general practice with extra training, eg diabetes speciality, be on band 7? Or nurse practitioners, band 8? That gets to 45k and higher.

OK so maybe numbers are fewer, but as sidicks says the relationships between pay, contributions, pension, fund needed doesn't change, given all the assumptions regarding investment growth, index linking or set increases, spouse pension, etc all stay the same.

[sidicks]

mph1977 said:

i think you did ...

Please quote my post where I made this claim. Thanks.

mph1977 said:

45 k is still a hell of a lot for nurse ...

But not impossible. And, as explained earlier, the actual number is irrelevant, it's the relationship between contributions in and pension out. Not sure why you are still struggling with this?

Edited by sidicks on Wednesday 30th March 13:13

[mph1977]

FiF said:

I don't think anyone has suggested these levels of pay are those typically for nurses. Wouldn't a nurse in general practice with extra training, eg diabetes speciality, be on band 7? Or nurse practitioners, band 8? That gets to 45k and higher.

nurses in GP Practices are employed by a private sector employer ... the GP practice and generally earn a salary equivalent to band 6

Nurse practitioners are generally band 7 in the NHS , a few roles are 8a, but 8a is mainly the so called Management ...

using outliers and presenting that as the norm is also part of the chicken little stratgey and it;s 'project fear' into representing that Nurses and AHPs are paid well in excess ofthe median wage , wherethe reality for most nurses is that their basic salary is around the median and the opportunities for variable pay above band 5 are extemely limited outsdie a few specialities ...

[sidicks]

mph1977 said:

nurses in GP Practices are employed by a private sector employer ... the GP practice and generally earn a salary equivalent to band 6

Nurse practitioners are generally band 7 in the NHS , a few roles are 8a, but 8a is mainly the so called Management ...

using outliers and presenting that as the norm is also part of the chicken little stratgey and it;s 'project fear' into representing that Nurses and AHPs are paid well in excess ofthe median wage , wherethe reality for most nurses is that their basic salary is around the median and the opportunities for variable pay above band 5 are extemely limited outsdie a few specialities ...

Once again, mph1977 demonstrates a massive lack of understanding about pensions in general and the issue under discussion.

How boring.

[mph1977]

sidicks said:

mph1977 said:

nurses in GP Practices are employed by a private sector employer ... the GP practice and generally earn a salary equivalent to band 6

Nurse practitioners are generally band 7 in the NHS , a few roles are 8a, but 8a is mainly the so called Management ...

using outliers and presenting that as the norm is also part of the chicken little stratgey and it;s 'project fear' into representing that Nurses and AHPs are paid well in excess ofthe median wage , wherethe reality for most nurses is that their basic salary is around the median and the opportunities for variable pay above band 5 are extemely limited outsdie a few specialities ...

Once again, mph1977 demonstrates a massive lack of understanding about pensions in general and the issue under discussion.

How boring.

it does not change the fact that you repsented a 30K + pension as the norm in your previous post ...

[sidicks]

mph1977 said:

it does not change the fact that you repsented a 30K + pension as the norm in your previous post ...

Once again, I did nothing of the sort - please back up your claims. Where did I say it was the norm?

[Sheepshanks]

CoolHands said:

How many nurses earn £60k?

BTW my mother was nurse and guess what - surprise - neither she nor any of her colleagues earnt anywhere near that. For you to state nurse do is disingenuous.

These threads always bring out the extreme cases as if that's what all public servants get, but of course it's not true. Apart from anything else, most nurses are female and are likely to have had a career break so won't get their full entitlement anyway.

At the bottom end of the scale, some fully time served but very low paid NHS workers actually end up better off retired than when they were working!

[sidicks]

Sheepshanks said:

These threads always bring out the extreme cases as if that's what all public servants get, but of course it's not true. Apart from anything else, most nurses are female and are likely to have had a career break so won't get their full entitlement anyway.

No, they still get their full entitlement (which is based on years actually worked...) it's just that this is less than the maximum available because they've not been working for the whole period. Not sure why that should be surprising - in the same way those of us NOT working for the NHS don't get NHS pensions either...

Regardless, as explained above, the point is the benefit received relative to the contributions paid in - those that choose to take a career break are also have a contribution break too! They will still receive benefits that are a multiple of what those contributions have actually earned.

Edited by sidicks on Wednesday 30th March 14:41

[FiF]

sidicks said:

mph1977 said:

nurses in GP Practices are employed by a private sector employer ... the GP practice and generally earn a salary equivalent to band 6

Nurse practitioners are generally band 7 in the NHS , a few roles are 8a, but 8a is mainly the so called Management ...

using outliers and presenting that as the norm is also part of the chicken little stratgey and it;s 'project fear' into representing that Nurses and AHPs are paid well in excess ofthe median wage , wherethe reality for most nurses is that their basic salary is around the median and the opportunities for variable pay above band 5 are extemely limited outsdie a few specialities ...

Once again, mph1977 demonstrates a massive lack of understanding about pensions in general and the issue under discussion.

How boring.

It is indeed boring, and demonstrates he can't read, or chooses not to read. Even the first part he quoted said nobody was suggesting these levels of pay were typical of majority.

Though looking back at the original article, it talks about a nurse starting on 21,692, which is bottom of band 5. Then staying in that band for 40 years, with annual pay rises if 4%. I'd reckon that last bit is not the norm based on current increases, but over 40 years who knows. It's that bit which generates numbers that seem large in today's terms, a caveat that is repeatedly mentioned.

Clearly the article is intended to generate some big numbers to appeal to a certain demographic, and would agree the 2.2million is a massive miscalculation, even with starry eyed increases and a helluva spouse pension it's a daft figure imo.

Anyway cue more of the chicken little, powerfully built, arseperational jibes.

[Sheepshanks]

sidicks said:

Regardless, as explained above, the point is the benefit received relative to the contributions paid in - those that choose to take a career break are also have a contribution break too! They will still receive benefits that are a multiple of what those contributions have actually earned.

Yes, hence my wife's awesome £250/mth pension.

[sidicks]

Sheepshanks said:

Yes, hence my wife's awesome £250/mth pension.

How much were her contributions...
Over how many years were her contributions made...