More years drawing a pension than contributing?
Discussion
footnote said:
It's interesting to get those percentages - very informative and helps with context but more useful if you know what the actual income is.
When I worked in the NHS in the 80s, I was on under £5000 for the first 3 years so £400 ish a month - pension contributions were compulsory - no idea what they were but 15% would have been hard although - what's that? £60? sounds like nothing.
I bought a house that cost £14,500 on that salary. The house was in a s
t area but over £100k today so someone with no deposit like me would need nearly £30k to buy it today - you don't get that starting in the NHS today.
I take your point that while the % of my contributions from my pay is high the figure is low, because the pay was dreadful. Hence the need to promise the pension. It was barbed, as I have said, as when I joined over half of officers left the job before 10 years were up. So something had to be done to keep them.When I worked in the NHS in the 80s, I was on under £5000 for the first 3 years so £400 ish a month - pension contributions were compulsory - no idea what they were but 15% would have been hard although - what's that? £60? sounds like nothing.
I bought a house that cost £14,500 on that salary. The house was in a s
t area but over £100k today so someone with no deposit like me would need nearly £30k to buy it today - you don't get that starting in the NHS today.You might remember the de facto work to rules that went on in the middle 70s by Met police. Or, as the press followed the government line and refused to publish, you might not. But it scared the government into backing down.
I joined the job with 9 mnths pay - that's from my much better paid previous job - in the bank and that went within 18mnths. So my contributions were somewhat low in value, but still a lot of money for me.
Also, up until the late 90s the pension arrangement made a profit. There was no fund, this a deliberate ploy by the government, so it came out of the money paid to the police. The amount paid to pensioners was always less, much less in the 70s, than was taken from the pay of officers. There was no complaint of PH in those days about defrauded police officers in the public sector. (Couldn't resist.)
The police in my day tried to get a pension fund. The offer the government made was pathetic, it had to be so because of the wastage. If they'd made one that was fair I definitely would have left at the first job offer I got. This was clearly the reason for the desultory offer. Even then, some officers took up the option, but mainly those who were thinking of leaving at the time.
The problem is that many people don't understand the full implications of the way the pension was arranged for the police, although this doesn't stop them pontificating though. Pensions were a big concern for many officers, including me, and we knew it from front to back, rather than backwards as some on here.
Sheepshanks said:
Few people in the private sector make anything like the level of pension contribution that police officers and teachers do. My late dad retired from the fire brigade 30yrs ago and I remember when he was working he was paying 11% from a salary that didn't have a lot of spare in it. I think they pay around 15% now.
Interestingly, on the Radio 4 programme I keep banging on about http://www.bbc.co.uk/programmes/b07pd34kthey had a pensions 'expert' who said someone on average annual pay in their 20s would now need to be contributing 15% to get an income of £1000 pa in retirement.
Someone in their 30s or 40s would need to invest 30% of an average annual salary to get £1000pa in retirement.
Derek Smith said:
The conceit!
You know so much. You also know that government figures can be trusted implicitly.;
I've pointed out how my pension contributions were calculated, all available in the documentation of the enquiries. But you've read someone something that suits your point of view and you will continue to spout it.
I've been corrected by someone who doesn't want to know.
All my figures are correct as far as they go. But they are, in fact, worse as I haven't included everything.
Sorry to upset you, but I am right.
The scheme documentation is quite explicit...You know so much. You also know that government figures can be trusted implicitly.;
I've pointed out how my pension contributions were calculated, all available in the documentation of the enquiries. But you've read someone something that suits your point of view and you will continue to spout it.
I've been corrected by someone who doesn't want to know.
All my figures are correct as far as they go. But they are, in fact, worse as I haven't included everything.
Sorry to upset you, but I am right.
I've not disputed the figures you've quoted above, but I am disputing the other claims (and your understanding of what the figures mean).
Just as I disputed your claims that the average senior office only lived for 3.5 years post retirements, so didn't ever claim much of their pension (when the scheme documentation showed that the true figure was more like 35 years...).
footnote said:
....
I've no objections to pepole being able to retire early in principle, as long as their retirement isn't obscenely funded by the contributions of others who will never, ever get the same level of benefit.
Sorry for not quoting all your excellent post, footnote, but this bit sums it up for me.I've no objections to pepole being able to retire early in principle, as long as their retirement isn't obscenely funded by the contributions of others who will never, ever get the same level of benefit.
Derek Smith said:
I take your point that while the % of my contributions from my pay is high the figure is low, because the pay was dreadful. Hence the need to promise the pension. It was barbed, as I have said, as when I joined over half of officers left the job before 10 years were up. So something had to be done to keep them.
You might remember the de facto work to rules that went on in the middle 70s by Met police. Or, as the press followed the government line and refused to publish, you might not. But it scared the government into backing down.
I joined the job with 9 mnths pay - that's from my much better paid previous job - in the bank and that went within 18mnths. So my contributions were somewhat low in value, but still a lot of money for me.
Also, up until the late 90s the pension arrangement made a profit
Nonsense.You might remember the de facto work to rules that went on in the middle 70s by Met police. Or, as the press followed the government line and refused to publish, you might not. But it scared the government into backing down.
I joined the job with 9 mnths pay - that's from my much better paid previous job - in the bank and that went within 18mnths. So my contributions were somewhat low in value, but still a lot of money for me.
Also, up until the late 90s the pension arrangement made a profit
Derek Smith said:
There was no fund, this a deliberate ploy by the government, so it came out of the money paid to the police.
Makes no sense.Derek Smith said:
The amount paid to pensioners was always less, much less in the 70s, than was taken from the pay of officers. There was no complaint of PH in those days about defrauded police officers in the public sector. (Couldn't resist.)
An irrelevant and misleading comparison, as those who understand pensions will know.Derek Smith said:
The police in my day tried to get a pension fund. The offer the government made was pathetic, it had to be so because of the wastage. If they'd made one that was fair I definitely would have left at the first job offer I got. This was clearly the reason for the desultory offer. Even then, some officers took up the option, but mainly those who were thinking of leaving at the time.
Funded or unfunded is irrelevant with a government guarantee - you're just showing your lack of understanding now.Derek Smith said:
The problem is that many people don't understand the full implications of the way the pension was arranged for the police, although this doesn't stop them pontificating though. Pensions were a big concern for many officers, including me, and we knew it from front to back, rather than backwards as some on here.
Based on the above (and previous claims), the evidence suggest otherwise...Sheepshanks said:
footnote said:
I've no objections to pepole being able to retire early in principle, as long as their retirement isn't obscenely funded by the contributions of others who will never, ever get the same level of benefit.
Few people in the private sector make anything like the level of pension contribution that police officers and teachers do. My late dad retired from the fire brigade 30yrs ago and I remember when he was working he was paying 11% from a salary that didn't have a lot of spare in it. I think they pay around 15% now.footnote said:
The DI and headteacher mentioned at the beginning of the thread on pensions of more than £28k each can only achieve these incomes through the contributions of others.
So often, people defend 'taking' by saying 'well, I paid in my whole life'
But they don't accept that they didn't pay in but a fraction of what they're taking out and that there may be an element of injustice in that.
The headteacher (primary) was 72, so I'm guessing retired (female so at least) 7 years on more than £28k.
Life span for a woman could easily hit the late 80s or more with free NHS care and prescriptions and winter heating allowance and old age pension ont top.
Let's be wildly speculative, and giver her 20 more years + 7 already lived on £28k and the same again for her partner, although he'll possible have a shorter lifespan but may have retired earlier.
The headteacher may have worked the full 40 years but not all as a headteacher and a lot on less than £28k.
How many years to police have to work before retirement on full whack?
There's no way either of them contributed anything like what they are taking out and there's no way they could have contributed enough to get those incomes.
That's a lot of other people's money.
The pension is part of their package though - some PHer's are in the habit of adding the value to their annual salary whenever there's a discussion about public sector workers.So often, people defend 'taking' by saying 'well, I paid in my whole life'
But they don't accept that they didn't pay in but a fraction of what they're taking out and that there may be an element of injustice in that.
The headteacher (primary) was 72, so I'm guessing retired (female so at least) 7 years on more than £28k.
Life span for a woman could easily hit the late 80s or more with free NHS care and prescriptions and winter heating allowance and old age pension ont top.
Let's be wildly speculative, and giver her 20 more years + 7 already lived on £28k and the same again for her partner, although he'll possible have a shorter lifespan but may have retired earlier.
The headteacher may have worked the full 40 years but not all as a headteacher and a lot on less than £28k.
How many years to police have to work before retirement on full whack?
There's no way either of them contributed anything like what they are taking out and there's no way they could have contributed enough to get those incomes.
That's a lot of other people's money.
And if you want to be pedantic about it even the contributions they make are other people's money as their whole package it tax-payer funded. Even the tax they pay!
My issue with it is they don't all get the level of pension quoted - my missus is and ex-civil servant and gets £260/mth pension.
Call it 3k a year pension. I think you'd need a pot of around 70k or so to fund that.
Isn't one of the major 'injustices' of current pension payouts tied up in the final salary schemes and their demise for future generations.
As Derek says 15% of a starting income at say 20 years of age represents a lot of cash. For me in the 1980s it represented £60 out of a monthly income of £400.
But when you think about the retirees in the Radio 4 show http://www.bbc.co.uk/programmes/b07pd34k
on £28k per annum you might say that's a pretty good return for £60 a month.
I was exceedingly stupid about pensions at that age - probably still am, but I remember a mentor describing what was fairly common practice in the NHS (and other public services) with final salary pension schemes.
For the less-informed (like me) it worked on the basis that you notionally worked for 40 years towards a retirement age of 60 - work two thirds/66% of your life to be rewarded with two thirds/66% of your final annual salary.
Of course not everyone rises through the ranks, so 66% of final salary might not be that great but if you manage to get promoted in the last few years of your career, the 66% could suddenly become something quite considerable in relation to the amount of contributions you'd made.
You spend the bulk of your working life contributing 15% of £30k only to spend the rest of your retired life on a pension of 66% of say £45k because of a timely promotion at the end.
Of course not everyone in the public sector benefits from this but I believe it to have been a well-known and widespread practice.
As Derek says 15% of a starting income at say 20 years of age represents a lot of cash. For me in the 1980s it represented £60 out of a monthly income of £400.
But when you think about the retirees in the Radio 4 show http://www.bbc.co.uk/programmes/b07pd34k
on £28k per annum you might say that's a pretty good return for £60 a month.
I was exceedingly stupid about pensions at that age - probably still am, but I remember a mentor describing what was fairly common practice in the NHS (and other public services) with final salary pension schemes.
For the less-informed (like me) it worked on the basis that you notionally worked for 40 years towards a retirement age of 60 - work two thirds/66% of your life to be rewarded with two thirds/66% of your final annual salary.
Of course not everyone rises through the ranks, so 66% of final salary might not be that great but if you manage to get promoted in the last few years of your career, the 66% could suddenly become something quite considerable in relation to the amount of contributions you'd made.
You spend the bulk of your working life contributing 15% of £30k only to spend the rest of your retired life on a pension of 66% of say £45k because of a timely promotion at the end.
Of course not everyone in the public sector benefits from this but I believe it to have been a well-known and widespread practice.
Edited by footnote on Thursday 25th August 15:37
footnote said:
Isn't one of the major 'injustices' of current pension payouts tied up in the final salary schemes and their demise for future generations.
As Derek says 15% of a starting income at say 20 years of age represents a lot of cash. For me in the 1980s it represented £60 out of a monthly income of £400.
But when you think about the retirees in the Radio 4 show http://www.bbc.co.uk/programmes/b07pd34k
on £28k per annum you might say that's a pretty good return for £60 a month.
I was exceedingly stupid about pensions at that age - probably still am, but I remember a mentor describing what was fairly common practice in the NHS (and other public services) with final salary pension schemes.
For the less-informed (like me) it worked on the basis that you notionally worked for 40 years towards a retirement age of 60 - work two thirds/66% of your life to be rewarded with two thirds/66% of your final annual salary.
Of course not everyone rises through the ranks, so 66% of final salary might not be that great but if you manage to get promoted in the last few years of your career, the 66% could suddenly become something quite considerable in relation to the amount of contributions you'd made.
You spend the bulk of your working life contributing 15% of £30k only to spend the rest of your retired life on a pension of 66% of say £45k because of a timely promotion at the end.
Of course not everyone in the public sector benefits from this but I believe it to have been a well-known and widespread practice.
A close relative had that exact situation - more or less a lifetime in the company and all but the last 5 or so years he was a pretty normal salary but then through redundancies good luck chance etc his salary DOUBLED. He was offered to carry on part time when the time came or take a lesser role.... Clearly he declined and took 66% of that great ending position. As Derek says 15% of a starting income at say 20 years of age represents a lot of cash. For me in the 1980s it represented £60 out of a monthly income of £400.
But when you think about the retirees in the Radio 4 show http://www.bbc.co.uk/programmes/b07pd34k
on £28k per annum you might say that's a pretty good return for £60 a month.
I was exceedingly stupid about pensions at that age - probably still am, but I remember a mentor describing what was fairly common practice in the NHS (and other public services) with final salary pension schemes.
For the less-informed (like me) it worked on the basis that you notionally worked for 40 years towards a retirement age of 60 - work two thirds/66% of your life to be rewarded with two thirds/66% of your final annual salary.
Of course not everyone rises through the ranks, so 66% of final salary might not be that great but if you manage to get promoted in the last few years of your career, the 66% could suddenly become something quite considerable in relation to the amount of contributions you'd made.
You spend the bulk of your working life contributing 15% of £30k only to spend the rest of your retired life on a pension of 66% of say £45k because of a timely promotion at the end.
Of course not everyone in the public sector benefits from this but I believe it to have been a well-known and widespread practice.
Edited by footnote on Thursday 25th August 15:37
Career average takes that issue away which is good.
What is still not good is the investment required by company and individual. This needs to be addressed. Essentially you could have a career average salary for all workers and given the option of bronze silver gold Platinium centurion whatever and employee and employer payments accordingly.
One company I worked for DB for 6 years gives £XK final salary based upon my pension forecasts in a job which is easily 2.5x is need to work 36years ..... That really brings it home.
Welshbeef said:
A close relative had that exact situation - more or less a lifetime in the company and all but the last 5 or so years he was a pretty normal salary but then through redundancies good luck chance etc his salary DOUBLED. He was offered to carry on part time when the time came or take a lesser role.... Clearly he declined and took 66% of that great ending position.
Career average takes that issue away which is good.
Is "career average" a new thing? Or recent?Career average takes that issue away which is good.
I'm just thinking that a lot of the people retiring on big pensions now must have signed up when it was based on simple 'final salary'.
footnote said:
Welshbeef said:
A close relative had that exact situation - more or less a lifetime in the company and all but the last 5 or so years he was a pretty normal salary but then through redundancies good luck chance etc his salary DOUBLED. He was offered to carry on part time when the time came or take a lesser role.... Clearly he declined and took 66% of that great ending position.
Career average takes that issue away which is good.
Is "career average" a new thing? Or recent?Career average takes that issue away which is good.
I'm just thinking that a lot of the people retiring on big pensions now must have signed up when it was based on simple 'final salary'.
Now you've got more schemes (that are still even open) doing career average, where you accrue each year based on the salary of that year. Not sure when they came in though...sidicks will be better informed than I.
footnote said:
Is "career average" a new thing? Or recent?
I'm just thinking that a lot of the people retiring on big pensions now must have signed up when it was based on simple 'final salary'.
Some in the public sector like to point out that current schemes are now career average rather than final salary and hence are less generous.I'm just thinking that a lot of the people retiring on big pensions now must have signed up when it was based on simple 'final salary'.
What you fail to acknowledge (or understand?) is that a) the accrual rate is higher than before and b) salaries are revalued at a rate above inflation, meaning that for many (non high-Flyers) the scheme is actually more generous.
Sheepshanks said:
Few people in the private sector make anything like the level of pension contribution that police officers and teachers do. My late dad retired from the fire brigade 30yrs ago and I remember when he was working he was paying 11% from a salary that didn't have a lot of spare in it. I think they pay around 15% now.
I'm sure the private sector would increase contributions if the taxpayer was going to add a massive subsidy.From recollection, the terms of the Fire service mention mean that if the employee pays 15%, the taxpayer still needs to be more than 35%..
Sheepshanks said:
The pension is part of their package though - some PHer's are in the habit of adding the value to their annual salary whenever there's a discussion about public sector workers.
And if you want to be pedantic about it even the contributions they make are other people's money as their whole package it tax-payer funded. Even the tax they pay!
My issue with it is they don't all get the level of pension quoted - my missus is and ex-civil servant and gets £260/mth pension.
Irrelevant without understanding how much she paid in, that's the point! It's not the size of the pension, it's the size of the pension relative to what they've contributed.And if you want to be pedantic about it even the contributions they make are other people's money as their whole package it tax-payer funded. Even the tax they pay!
My issue with it is they don't all get the level of pension quoted - my missus is and ex-civil servant and gets £260/mth pension.
sidicks said:
Welshbeef said:
I've got one from 2007 ish. So likely well before that.
Career average earnings or Career Revalued average earnings?At what accrual rate?
It was literally calculated year by year so you could see it iteratively increase. Not revalued.
I left that company a long time ago so not sure what the current offering is.
Biker 1 said:
I wonder how many people there are like me: interest only mortgage, no savings, no private pension provision, work for small private company. Average wage.
I guess I'll work until I drop or win the lottery...
Lots. I guess I'll work until I drop or win the lottery...
Even small companies have to offer the 1% deal increasing to 3%
Also, up until the late 90s the pension arrangement made a profit
[/quote]
"Nonsense."
I've told you before that just gainsaying what someone has posted is not an argument.
Here, I'll give you a chance to point out where I'm wrong by putting it simply. There was no fund. The government took 11.5% of gross in order, they said, to pay for the pensions of retired officers. This was the pension arrangement. However, the cost of the retired officers was significantly lower, at one time less than half, of the pay deducted. This went on until the late 90s.
I fail to see how that can be nonsense. It was admitted by the government after a challenge, although they failed to make any changes. That's what happened. You are wrong.
[quote=Derek Smith]
The amount paid to pensioners was always less, much less in the 70s, than was taken from the pay of officers.
[/quote]
"An irrelevant and misleading comparison, as those who understand pensions will know."
Self aggrandisement is no more an argument that gainsaying. What I said was correct. It is not irrelevant. I think you are confusing pension funds with the pension arrangement of the police.
[quote=Derek Smith]
I said something about the change that the government made in the pension arrangements
[/quote]
"Funded or unfunded is irrelevant with a government guarantee - you're just showing your lack of understanding now."
As I said gainsaying and self aggrandisement . . . Also, the point of that para was that the government realised that a funded pension would risk high wastage, hardly irrelevant when it is the basis of the para.
Then:
You quote what you have previously posted, i.e. unevidenced rejection and suggesting you are an expert in police pension arrangements, to support your argument. That's not the way it is done.
What I've said is spot on.
1/ The police pension was designed primarily to keep officers in the job. Wastage was a major problem. It was pension or reasonable pay, and the former won out. To an extent, high wastage continued right up until the independent review of police pay under labour. Once that was awarded, although not in full as I have explained, wastage dropped to more normal levels for public service.
2/ The % contributions of the Federated police officer was much, much higher than the posted amount, the reasons being the other ways the government could deduct pay from officers without having to admit it. I thought only idiots would believe what the government said.
3/ Until the late 90s the amount deducted from police wages destined, we were told, to fund the pension of retired officers, was greater than that of the amount paid out.
If you have an argument against any of those statements then I'd read it and point out where you are wrong without just saying rubbish. Whether I know about pensions or not is immaterial. I know what the government did to the police. I know the lies they told.
[/quote]
"Nonsense."
I've told you before that just gainsaying what someone has posted is not an argument.
Here, I'll give you a chance to point out where I'm wrong by putting it simply. There was no fund. The government took 11.5% of gross in order, they said, to pay for the pensions of retired officers. This was the pension arrangement. However, the cost of the retired officers was significantly lower, at one time less than half, of the pay deducted. This went on until the late 90s.
I fail to see how that can be nonsense. It was admitted by the government after a challenge, although they failed to make any changes. That's what happened. You are wrong.
[quote=Derek Smith]
The amount paid to pensioners was always less, much less in the 70s, than was taken from the pay of officers.
[/quote]
"An irrelevant and misleading comparison, as those who understand pensions will know."
Self aggrandisement is no more an argument that gainsaying. What I said was correct. It is not irrelevant. I think you are confusing pension funds with the pension arrangement of the police.
[quote=Derek Smith]
I said something about the change that the government made in the pension arrangements
[/quote]
"Funded or unfunded is irrelevant with a government guarantee - you're just showing your lack of understanding now."
As I said gainsaying and self aggrandisement . . . Also, the point of that para was that the government realised that a funded pension would risk high wastage, hardly irrelevant when it is the basis of the para.
Then:
You quote what you have previously posted, i.e. unevidenced rejection and suggesting you are an expert in police pension arrangements, to support your argument. That's not the way it is done.
What I've said is spot on.
1/ The police pension was designed primarily to keep officers in the job. Wastage was a major problem. It was pension or reasonable pay, and the former won out. To an extent, high wastage continued right up until the independent review of police pay under labour. Once that was awarded, although not in full as I have explained, wastage dropped to more normal levels for public service.
2/ The % contributions of the Federated police officer was much, much higher than the posted amount, the reasons being the other ways the government could deduct pay from officers without having to admit it. I thought only idiots would believe what the government said.
3/ Until the late 90s the amount deducted from police wages destined, we were told, to fund the pension of retired officers, was greater than that of the amount paid out.
If you have an argument against any of those statements then I'd read it and point out where you are wrong without just saying rubbish. Whether I know about pensions or not is immaterial. I know what the government did to the police. I know the lies they told.
Welshbeef said:
Biker 1 said:
I wonder how many people there are like me: interest only mortgage, no savings, no private pension provision, work for small private company. Average wage.
I guess I'll work until I drop or win the lottery...
Lots. I guess I'll work until I drop or win the lottery...
Even small companies have to offer the 1% deal increasing to 3%
Auto enrolment is an interesting development but 1% or even 3% is so ludicrously low it's a wonder it is even mentioned at all. 1% of £25k in today's money (times two) over 40 years must be worth in the region of feck all. Especially so if state pensions and/or other state benefits become means tested.
Work til I drop it is then!
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