Dear University lecturers - get back to work
Discussion
travel is dangerous said:
Snip
I estimated the effect the proposed changes would have on my pension. I assumed that under any potential DC scheme, I would purchase an annuity - to provide the security of income that I have under the current DB scheme. My estimated annual retirement income will fall from ~25-30k to 10k.
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So, regarding your post - what a load of drivel.
So, you expected £30k/year for 20-25 years (assuming you retire at 65 and get to 85-90). I estimated the effect the proposed changes would have on my pension. I assumed that under any potential DC scheme, I would purchase an annuity - to provide the security of income that I have under the current DB scheme. My estimated annual retirement income will fall from ~25-30k to 10k.
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So, regarding your post - what a load of drivel.
That’s £600k-£750k.
And you’re putting in 8% of your salary for 30-ish years. Plus 5% compound growth on that capital.
I think that would have been good darts but unaffordable darts - hence the need for amendment to DB pensions.
travel is dangerous said:
The Crack Fox said:
If they've been contractually diddled somehow - they should take legal action. If they've got the hump over their employment terms - go and work somewhere else. Same for all striking public sector workers. I just don't get it. I have zero sympathy.
Your pension is therefore an important part of the remuneration package, and it's value is being cut by roughly £10,000 a year in retirement.[/i] Perhaps now you understand why so many people are so outraged.Perhaps it is being cut by £10k a year that doesn't mean much unless its given some context via the previous figure vs the new one. Besides that, as usual when such figures are quoted I doubt that will be the average - that will be at the top end of the pay scale, the worst case..
If its being cut from £20K to £10K then that's huge, not reasonable (and also highly unlikely) .
If the £10K cut applies to someone with £100K pension then frankly, so what? Welcome to the real world (ish).
DB schemes are almost universally unaffordable. Everyone knows this, its why they have had to be killed off.
Wombat3 said:
Quite carefully worded is that.
Perhaps it is being cut by £10k a year that doesn't mean much unless its given some context via the previous figure vs the new one. Besides that, as usual when such figures are quoted I doubt that will be the average - that will be at the top end of the pay scale, the worst case..
If its being cut from £20K to £10K then that's huge, not reasonable (and also highly unlikely) .
If the £10K cut applies to someone with £100K pension then frankly, so what? Welcome to the real world (ish).
DB schemes are almost universally unaffordable. Everyone knows this, its why they have had to be killed off.
The size of the loss you will experience (obviously) depends on how early in your career you are. For me, my annual retirement income will drop from about £25-30k to about £10k...Perhaps it is being cut by £10k a year that doesn't mean much unless its given some context via the previous figure vs the new one. Besides that, as usual when such figures are quoted I doubt that will be the average - that will be at the top end of the pay scale, the worst case..
If its being cut from £20K to £10K then that's huge, not reasonable (and also highly unlikely) .
If the £10K cut applies to someone with £100K pension then frankly, so what? Welcome to the real world (ish).
DB schemes are almost universally unaffordable. Everyone knows this, its why they have had to be killed off.
johnfm said:
So, you expected £30k/year for 20-25 years (assuming you retire at 65 and get to 85-90).
That’s £600k-£750k.
And you’re putting in 8% of your salary for 30-ish years. Plus 5% compound growth on that capital.
I think that would have been good darts but unaffordable darts - hence the need for amendment to DB pensions.
You are forgetting the the employer contributes 18 % alongside the employees 8 %. That’s £600k-£750k.
And you’re putting in 8% of your salary for 30-ish years. Plus 5% compound growth on that capital.
I think that would have been good darts but unaffordable darts - hence the need for amendment to DB pensions.
Runes said:
Rovinghawk said:
So they can screw the students over with no guilt. Excellent. Power tto the people.
Just to clarify, I didn't say that, and I didn't mean that.No doubt some of the striking staff feel guilty about the disruption to students' education. But disruption is part of the point of striking. It's how it's meant to work. Don't you agree?
The point I was making in my previous post is that it is bizzare to complain that striking staff won't refund tuition fees, when they have no power to do so.
travel is dangerous said:
You are forgetting the the employer contributes 18 % alongside the employees 8 %.
That’s exactly the point - your 8% isn’t anywhere enough to fund the benefits you receive, hence requiring massive subsidies from someone else.Many of your other claims on this thread have been shown to be categorically wrong, but it’s not clear is this was deliberate on your behalf or just confusion?
travel is dangerous said:
You are forgetting the the employer contributes 18 % alongside the employees 8 %.
Companies do not have pension "black holes" because he numbers stack up 
. Even adding this you will find that the majority of people are going to be very short.And who is the employer...?
DB pensions are quite simply not affordable. This has been very clearly the case for over 20yrs now.
sidicks said:
travel is dangerous said:
You are forgetting the the employer contributes 18 % alongside the employees 8 %.
That’s exactly the point - your 8% isn’t anywhere enough to fund the benefits you receive, hence requiring massive subsidies from someone else.Many of your other claims on this thread have been shown to be categorically wrong, but it’s not clear is this was deliberate on your behalf or just confusion?
I don't think anything has been shown to be categorically wrong. We have been talking about the deficit of a pension scheme. Since evaluating the size of that deficit necessarily involves making many assumptions about the future, it's very easy to dispute the size of the deficit if you disagree with those assumptions.
Murph7355 said:
Companies do not have pension "black holes" because he numbers stack up . Even adding this you will find that the majority of people are going to be very short.
And who is the employer...?
DB pensions are quite simply not affordable. This has been very clearly the case for over 20yrs now.
here we go. 'simply not affordable' = 'my employer doesn't value me enough to pay for a proper pension scheme'. . Even adding this you will find that the majority of people are going to be very short.And who is the employer...?
DB pensions are quite simply not affordable. This has been very clearly the case for over 20yrs now.
err? the employer is the university each employee works for?
travel is dangerous said:
johnfm said:
So, you expected £30k/year for 20-25 years (assuming you retire at 65 and get to 85-90).
That’s £600k-£750k.
And you’re putting in 8% of your salary for 30-ish years. Plus 5% compound growth on that capital.
I think that would have been good darts but unaffordable darts - hence the need for amendment to DB pensions.
You are forgetting the the employer contributes 18 % alongside the employees 8 %. That’s £600k-£750k.
And you’re putting in 8% of your salary for 30-ish years. Plus 5% compound growth on that capital.
I think that would have been good darts but unaffordable darts - hence the need for amendment to DB pensions.
travel is dangerous said:
it's not a massive subsidy. Its an employer contribution. It's something that pay for/to me, in exchange for me working for them.
I don't think anything has been shown to be categorically wrong. We have been talking about the deficit of a pension scheme. Since evaluating the size of that deficit necessarily involves making many assumptions about the future, it's very easy to dispute the size of the deficit if you disagree with those assumptions.
I guess that’s why we have professionals to do these things?I don't think anything has been shown to be categorically wrong. We have been talking about the deficit of a pension scheme. Since evaluating the size of that deficit necessarily involves making many assumptions about the future, it's very easy to dispute the size of the deficit if you disagree with those assumptions.
sidicks said:
I guess that’s why we have professionals to do these things?
Of course the history of this century so far has demonstrated that professionals, especially in the financial arena, rarely get things wrong, and always act in the best interest of those they are supposed to be acting for. To question a professional would really be innappropriate.People who work in universities are some of the best trained critical thinkers, they can apply this skill in unfamiliar areas relatively easily. That’s what they’re doing here.
travel is dangerous said:
You wouldn’t call your salary a subsidy - it’s remuneration. Why are employer pension contributions any different?
Because it's massively unsustainable based on increased longevity.Why should I as a taxpayer have to curb my retirement plans massively in order to fund yours very generously? ('Yours' being general not personal)
travel is dangerous said:
Of course the history of this century so far has demonstrated that professionals, especially in the financial arena, rarely get things wrong, and always act in the best interest of those they are supposed to be acting for. To question a professional would really be innappropriate.
People who work in universities are some of the best trained critical thinkers, they can apply this skill in unfamiliar areas relatively easily. That’s what they’re doing here.
Very badly.People who work in universities are some of the best trained critical thinkers, they can apply this skill in unfamiliar areas relatively easily. That’s what they’re doing here.
travel is dangerous said:
it's not a massive subsidy. Its an employer contribution. It's something that pay for/to me, in exchange for me working for them.
The bulk of your pension is, ultimately, paid by the taxpayer. How is that NOT a massive subsidy?travel is dangerous said:
I don't think anything has been shown to be categorically wrong.
travel is dangerous said:
25 % of our salary is contributed towards making the defined benefit pension
8% of your salary is contributed, the rest is from the employer / taxpayer and is not sufficient to fund the benefits, hence the large scheme deficit.travel is dangerous said:
The scheme currently can afford to pay its annual liabilities from its annual income, with room to spare - it doesn't have to touch the invested capital.
Highly disingenuous / misleading. By only focusing on cashflows and not actual liabilities, it is basically saying that we can keep kicking the can down the road as future generations will pay higher and higher contributions to fund the accumulated deficit. Basically a huge ponzi scheme to support those earning benefits now (I.e. you) to be paid for by someone else.travel is dangerous said:
Alternatively, the scheme needs only a 3 % annual return to meet its annual liabilities (without touching income).
Not true. In the latest scheme valuation that I attached earlier, the investment return sssumption of 3% is insufficient to fund the liabilities (hence the deficit), that includes both the income generated and the capital value of those assets.travel is dangerous said:
The deficit is calculated based on the current (estimated) liabilities of the scheme. The test requires that the scheme should be able to meet these should all of the employers go out of business
The deficit takes into account the value of the promises already made and the value of assets held against those promises. It shows that there is a large shortfall, as previous contributions and returns expected on those contributions are insufficient. The deficit was £12.6bn (31/12/2017) but is likely to have increased further due to the falls in the stock ]market in the last few weeks. That valuation makes some assumptions that the investment strategy will achieve a certain level of returns that are not guaranteed. If the employer needs to make further payments to close this deficit then that is more money not available for other things.
In order to have absolute certainty of being able to fund these benefits, the insurance buy-out price shows a deficit of over £27bn.
You’ve also said yourself that you expect high pay rises in the future which are not factored into the current deficit, which would therefore be even higher than the figures quoted above.
travel is dangerous said:
The proposed 8 % employee/13.25 % employer contribution to a DC pot. 5 % growth a year on investments (i.e. generous). That my salary rises ~2 % a year (inflation aside) until I retire.
It’s funny that you can’t see the contradiction here.You claim that the fund has more than enough assets to meet the liabilities from 3% income alone (I.e. ignoring capital), yet you also claim that taking those contributions, assuming a 5% return (and the capital itself, you will be massively worse off!!
Please show your workings regarding the loss you believe you will be facing...
travel is dangerous said:
You wouldn’t call your salary a subsidy - it’s remuneration. Why are employer pension contributions any different? Company car? Health insurance? These are all benefits in return for labour.
Benefits which need to evolve in light of changing economic and demographic circumstances.Why do you think there are very few private sector DB schemes left?
You’ve certainly changed your tune. At the start it was a load of drivel about how these pensions were easily affordable. Now that has been shown to be nonsense, the goal posts have suddenly been moved and it’s all about what you ‘deserve’.
Rovinghawk said:
travel is dangerous said:
You wouldn’t call your salary a subsidy - it’s remuneration. Why are employer pension contributions any different?
Because it's massively unsustainable based on increased longevity.Why should I as a taxpayer have to curb my retirement plans massively in order to fund yours very generously? ('Yours' being general not personal)
Universities aren’t proposing to reduce their contributions. They will continue to contribute at the same rate. In any case, even if they did increase contributions, the sector could afford it - the sectorial surplus is something around £1 billion at the moment. (Why - and whether - this should be is another large topic for debate).
But what is proposed is a transfer of risk away from employers and wholesale onto employees. (The DB to DC shift). This is what so many view as inequitable.
Don’t forget this is a private pension scheme backed by employers and not an unfunded government scheme like the TPS.
The proposals that are being made will make a university lecturer’s pension worth substantially less than a teacher’s pension. If you want top people in your (currently) world class institutions this is a dumb move.
travel is dangerous said:
The answer to your second question is: you shouldn’t.
Yet we are, that’s how the taxpayer subsidy works. How don’t you understand this?travel is dangerous said:
Universities aren’t proposing to reduce their contributions. They will continue to contribute at the same rate.
It’s amazing how you can’t see the problem here. Contributions will continue at the same rate into a fund set aside for you, yet you claim your ultimate benefits will massively reduce. Where do you think the shortfall arises?travel is dangerous said:
In any case, even if they did increase contributions, the sector could afford it - the sectorial surplus is something around £1 billion at the moment. (Why - and whether - this should be is another large topic for debate).
The scheme is £12bn in deficit travel is dangerous said:
But what is proposed is a transfer of risk away from employers and wholesale onto employees. (The DB to DC shift). This is what so many view as inequitable.
You mean like nearly all private sector employees?travel is dangerous said:
Don’t forget this is a private pension scheme backed by employers and not an unfunded government scheme like the TPS.
It’s a taxpayer subsidised scheme. Funded or unfunded makes little difference.travel is dangerous said:
The proposals that are being made will make a university lecturer’s pension worth substantially less than a teacher’s pension. If you want top people in your (currently) world class institutions this is a dumb move.
The teacher’s scheme needs to change too. That’s no justification for not changing this scheme to something more affordable.What will you do instead?
Edited by sidicks on Friday 23 February 08:54
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