Final salary pension schemes should end

[Sticks.]

Dupont666 said:

[
Cause its unfair on the workers and the unions think so too... Bottom line there is no money... They dont care where it comes from even though there is no money, thats the one fact that seems to slip through when I talk to any public sector mates...

The ones (civil servants) I speak to are p'd off because their point of view is that during the 80s and 90s govt gave them better pension rights as a means of bargaining down pay. Govt saved money then at their expense (so it could 'balance the books' iirc), but it was just differing the spending until a future date. So when govt now says it can't afford it, there's not much sympathy.

In business it'd be like you providing a service for, say £30, whatever. But you're offered £10 now and £25 at the end of the month, because it suits the customer better. You agree. When you get near the end of the month and the customer says they can't afford it because they've spent it on something else, how sympathetic are you going to be? You won't care where they get the money from, not your problem.

That's why they're so p'd off anyway.

IMO the time to renegotiate would have been post 2001 when pay improved. But they couldn't because the govt-created demand for pub sec staff was so great, market forces put them on the back foot.

[jagracer]

F i F said:

As an aside because it struck me that it's not been made clear, but aiui if a FS scheme is closed to existing members then the accruals already earned will be paid at time of future retirement at x/60ths (say) of the salary at the time the scheme was closed, not salary at the time of retirement. This puts someone in the same position as a deferred member e.g. someone who left for another job.

Also, whilst it is hoped that if any FS schemes are closed that accrued benfits will be preserved, however that doesn't have to be the case. In the small print there will be the option to close the scheme and convert it to something else. And there will be more or less nothing that members can do about it.

Our FS pension will close next year, when I retire (if I'm still with them) I will get 1/60th of my pensionable salary at the time of retirement X the 16 years to next April that I will have paid in.

[sidicks]

Quinny said:

FYI they are still doing final salary, for existing and new recruits... As I said before the scheme is underwritten

By the taxpayer....

[F i F]

jagracer said:

F i F said:

As an aside because it struck me that it's not been made clear, but aiui if a FS scheme is closed to existing members then the accruals already earned will be paid at time of future retirement at x/60ths (say) of the salary at the time the scheme was closed, not salary at the time of retirement. This puts someone in the same position as a deferred member e.g. someone who left for another job.

Also, whilst it is hoped that if any FS schemes are closed that accrued benfits will be preserved, however that doesn't have to be the case. In the small print there will be the option to close the scheme and convert it to something else. And there will be more or less nothing that members can do about it.

Our FS pension will close next year, when I retire (if I'm still with them) I will get 1/60th of my pensionable salary at the time of retirement X the 16 years to next April that I will have paid in.

Lucky you, that certainly is unusual because the scheme sponsor is then taking the whole risk in relation to rampant wage inflation without the benefit of member contributions hich would have continued and rise with said inflation. Very unusual ime.

[sidicks]

Quinny said:

The current fund, is self financing at present....

what do you mean self fnancing?

For the vast majority of the public sector there isn't a fund for which pensions are paid from. Also, the cost of pensions increases significantly over time due to the combined effects of increasing age and increasing salaries.

Quinny said:

But yes, it's underwritten by the tax payer... Which all members of the scheme happen to be

Unfortunately most tax payers aren't members of the scheme so are currently forced to pay for their own pensions and subsidise private sector pensions, which is neither affordable nor fair.

Quinny said:

I'm not going to go into details on here, but most of the employees, will have a shorter life expectancy than, so called able bodied employees

That may be true for some employees (but nowhere near most employees!!), but that is already taken into account in the valuation of the cost of these schemes, so does not make them any more affordable!

Sidicks

Edited by sidicks on Friday 8th October 23:28

[7thCircleAcolyte]

Quinny said:

You miss understand... Read this bit slowly..... MOST employees, will not have the same life expectancy, as able bodied employees..

Many will retire early due to serious health issues, and will therefore not get full entitlement as they haven't contributed for long enough

This is a fact in this environment.

Its also a fact for a great many private sector workers which makes this line of arguement futile and irrelevant.

[sidicks]

Quinny said:

You miss understand... Read this bit slowly..... MOST employees, will not have the same life expectancy, as able bodied employees..

Many will retire early due to serious health issues, and will therefore not get full entitlement as they haven't contributed for long enough

Most employees will not have the same life expectancy?

5.5m public sector employees, and the majority of them are impaired in some way??!!!

I'm sure many people might argue that the lack of stress in a public sector job might mean they lived longer than average.....!!!

Sidicks

Edited by sidicks on Saturday 9th October 08:54

[sidicks]

7thCircleAcolyte said:

Its also a fact for a great many private sector workers which makes this line of arguement futile and irrelevant.

Futile, irrelevant and blatantly not true?!

Sidicks

[Andy Zarse]

piquet said:

Lucas CAV said:

el stovey said:

Are the majority of these public sector FS schemes really calculated as Length of service/80? That's really not much. Surely the vast majority of public sector pensions aren't that generous at all, hardly gold plated anyway.

I'm sure senior figures will get more but the majority of these pensions don't seem to give a very big pension.

The teacher's scheme and the NHS scheme are both 1/80s IIRC

Edited by Lucas CAV on Friday 8th October 13:18

yep, and as a doc you don;t start until you're 23 at the earliest, most at 24 so assuming you never take any time out to do research, work over seas the earliest you can retire on a full pension is 64 ( after 40/80ths)

Not strictly true, and slightly disingenuous if I may say so

It is (or at least was) an N/80ths scheme PLUS a 3N/80ths tax free lump sum. This is broadly equivalent to a private sector N/60ths scheme except of course very few private sector schemes offer full inflation proofing like the NHS scheme...

If you are seconded to a research Dept in a UK University you can have continuous service. If you go and work overseas then that is either for big bucks or pure altruism, but it's your choice! Again, if you're seconded abroad you can maintain membership of the NHS scheme...

Assuming a quack retiring now after 40 years service is on around £100k salary a year, then the lump sum is a cheque from the Treasury for £150,000 tax free. Nice huh!

[Andy Zarse]

7thCircleAcolyte said:

Quinny said:

You miss understand... Read this bit slowly..... MOST employees, will not have the same life expectancy, as able bodied employees..

Many will retire early due to serious health issues, and will therefore not get full entitlement as they haven't contributed for long enough

This is a fact in this environment.

Its also a fact for a great many private sector workers which makes this line of arguement futile and irrelevant.

Precisely. I've never read such drivel in my life! You also need to bear in mind they retire five years earlier too!

Edited by Andy Zarse on Saturday 9th October 09:09

[sidicks]

Andy Zarse said:

I've never read such drivel in my life! You also need to bear in mind they retire five years earlier too!

I thought that had already been changed recently??

Sidicks

[sidicks]

Quinny said:

I'm talking about my "specific" ex employer... That is still funded by the public purse, but has a very very different employee base

90% of which have very serious and very real health issues, but still manage to turn up for work, albeit in a supported environment..

Pretty much all of these people, would not be able to get a job in private sector without support

So they are like a charity then?

And your point is??

[sidicks]

Quinny said:

My point is lost on you

You and your cohorts, can continue getting pissed off about FS schemes. I and my collegues will continue to benefit from ours... Thanks to you the taxpayer

The thread has been discussing why public sector final salary pension schemes are unaffordable going forward - most people can accept that this is the case.

Suddenly you started discussing a small (relatively insignificant)sub-set of the public service with some impaired lives, as if that alone justified keeping all public sector final salary pension schemes open to future accrual!

Quinny said:

I'm off to Oulton park for the super bikes

Enjoy!


Sidicks

[Fatboy]

Sticks. said:

Dupont666 said:

[
Cause its unfair on the workers and the unions think so too... Bottom line there is no money... They dont care where it comes from even though there is no money, thats the one fact that seems to slip through when I talk to any public sector mates...

The ones (civil servants) I speak to are p'd off because their point of view is that during the 80s and 90s govt gave them better pension rights as a means of bargaining down pay. Govt saved money then at their expense (so it could 'balance the books' iirc), but it was just differing the spending until a future date. So when govt now says it can't afford it, there's not much sympathy.

In business it'd be like you providing a service for, say £30, whatever. But you're offered £10 now and £25 at the end of the month, because it suits the customer better. You agree. When you get near the end of the month and the customer says they can't afford it because they've spent it on something else, how sympathetic are you going to be? You won't care where they get the money from, not your problem.

That's why they're so p'd off anyway.

IMO the time to renegotiate would have been post 2001 when pay improved. But they couldn't because the govt-created demand for pub sec staff was so great, market forces put them on the back foot.

There's also the effect that massively increasing life expectancy means that the £25 you'd agreed to pay at the end of the month has suddenly become £50.

I don't understand why people can't grasp that a system designed for a life expectancy of 70-ish is not financially viable at a life expectancy of 90-ish...

[wargriff]

Quinny said:

sidicks said:

Quinny said:

I'm talking about my "specific" ex employer... That is still funded by the public purse, but has a very very different employee base

90% of which have very serious and very real health issues, but still manage to turn up for work, albeit in a supported environment..

Pretty much all of these people, would not be able to get a job in private sector without support

So they are like a charity then?

And your point is??

No they are not.a charity..

My point is lost on you

You and your cohorts, can continue getting pissed off about FS schemes. I and my collegues will continue to benefit from ours... Thanks to you the taxpayer


Lifes to short to spend time bhing on here, now where's that X button to dismiss this thread from my contributions

I'm off to Oulton park for the super bikes

The ' Thanks to you the taxpayer ' comment at the end, may of been light hearted, but it does make you seem a prick.

Yes you have contributed to your own pension pot via tax, but its this attitude that winds up those that also pay tax but dont get the gilt lined, index linked super pensions. It is the I am entitled to it and dont care where the money comes from to pay it issue, we are almost broke as a country, and it seems its only the private sector that is getting the idea. The public sector still continue to want the pay rises, index linked this, index linked that.

Maybe training in how to add up and take away needs to be done, as they dont seem to get it.

And yes im also aware we all have a choice in our career roles and employers. Which is why they need to end the FS schemes and make future shemes money purchase based, if the remaining workers or future workers dont like it, find another job that gives what you want. ( cant see them leaving though, can you ? )

Edited by wargriff on Saturday 9th October 13:37

[greygoose]

Fatboy said:

I don't understand why people can't grasp that a system designed for a life expectancy of 70-ish is not financially viable at a life expectancy of 90-ish...

Probably because people from all walks of life are generally a bit dim, add on the issues that politicians of all parties are scared to death to point out that the whole system is unaffordable and the financial services industry mainly exists to generate fees for itself rather than look after its customers and it is all a huge mess that is easier to ignore than try and do something about.

Edited by greygoose on Saturday 9th October 15:10

[Mr_annie_vxr]

I've read some of the posts and accept there is a big hole. A hole in my case not of my doing. For many years the police fund was in credit due to the reduced life expectancy and the higher percentage payment.

I was willing to accept change. Then I read the bile filled posts from some of those who chose not to join the PS but go into other far more lucrative fields. I've never begrudged any in the private sector for the enormous benefits they get. I paid my money I took my choice having now seen so many of them dancing with glee I now think my view is that nobody should earn more than 50k a year. That we should to reduce deficit tax at 100% for any figure above that car should also retrospectively tax those high earners for the past five years.

I'm of course kidding.

It just shows how some people on here really are not very nice individuals. Who want it all but don't like it when others appear to be gaining.

How many of the anti brigade earn more than 30k a year?

[turbobloke]

Looking at the same posts, quite a bit of the bile seems to be aimed at successive governments - particularly the previous one for letting the situation run away from them as a result of their lack of leadership, lack of competence and profligate spending.

Attitudes are a bit ribald on both sides from time to time, in contrast to your calm tone

[Ozzie Osmond]

In reality there's more than one problem going on at the same time,

1. Public sector pensions are not "funded" but all part of UK gov't crazy "pay as you go" approach. With the public sector grown and life expectancy rising the fact is public sector pensions have been a ticking time-bomb for more than a decade. It's not the current recession which has made them unaffordable.

2. Working patterns have changed and relative salaries have changed. Final salary is fine where everyone has a long career and the bosses doesn't earn too much more then the workers. But it's a nonsense when bosses earn far more than workers yet are only bosses for a short while. Their years of service at low level get multiplied up by their high level salary just before they leave.

3. Gordon Brown's tax raids have virtually destroyed private sector pensions. You simply can't have a situation where the engine of the economy (private sector) is funding a benefit for public sector employees which is massively more generous than anything in the private sector.

4. All things being equal Money Purchase (Defined Contribution) pensions are nothing to fear. Whether a pension arrangement is Final Salary (Defined Benefit) or Money Purchase you can never magically create money in it. Money out = money in plus investment return (less expenses).

[sidicks]

Ozzie Osmond said:

In reality there's more than one problem going on at the same time,

1. Public sector pensions are not "funded" but all part of UK gov't crazy "pay as you go" approach. With the public sector grown and life expectancy rising the fact is public sector pensions have been a ticking time-bomb for more than a decade. It's not the current recession which has made them unaffordable.

2. Working patterns have changed and relative salaries have changed. Final salary is fine where everyone has a long career and the bosses doesn't earn too much more then the workers. But it's a nonsense when bosses earn far more than workers yet are only bosses for a short while. Their years of service at low level get multiplied up by their high level salary just before they leave.

3. Gordon Brown's tax raids have virtually destroyed private sector pensions. You simply can't have a situation where the engine of the economy (private sector) is funding a benefit for public sector employees which is massively more generous than anything in the private sector.

4. All things being equal Money Purchase (Defined Contribution) pensions are nothing to fear. Whether a pension arrangement is Final Salary (Defined Benefit) or Money Purchase you can never magically create money in it. Money out = money in plus investment return (less expenses).

The voice of reason!!

Sidicks