Pension costs as a % of local council expenditure..?
Discussion
Local councils in England spend about £100bn annually. All of them provide useful and detailed analyses of the costs of the services they provide. In aggregate terms, local council expenditure looks something like this:
In this analysis, pension costs are - I understand - allocated against the service category to which they relate. For example, the cost of pension contributions for teachers is included in the Education category. This is logical, and helpful if you wish to understand the cost of those services.
But I would like to understand what percentage of local council expenditure is represented by pension costs. Specifically I would like to understand how this has changed over (say) the last 10 years. Can anyone point me towards publicly available data showing this?
In this analysis, pension costs are - I understand - allocated against the service category to which they relate. For example, the cost of pension contributions for teachers is included in the Education category. This is logical, and helpful if you wish to understand the cost of those services.
But I would like to understand what percentage of local council expenditure is represented by pension costs. Specifically I would like to understand how this has changed over (say) the last 10 years. Can anyone point me towards publicly available data showing this?
Rufus Stone said:
Why do you want to know this?
Because if its anything like the position of this Uk university said:
Following the USS Pension Scheme’s triennial 2018 valuation, contributions from employers as a proportion of salaries were due to rise from 21.1% to 23.7% this October. Employees’ contributions were due to rise from 9.6% to 11%.....
In order to maintain benefits at current levels, further increases in contributions were proposed by the USS Trustee that would have entailed employer contributions rising to between 28.5% and 37.6% and employee contributions to between 13.6% and 18.6% of salary. To put in context, the employer contribution alone could have meant over 11% of all our income would go to fund just USS pensions (if equally distributed across our income streams, that’s over £1,000 annually by each home student).
it would be a hell of a fraction of those sections.In order to maintain benefits at current levels, further increases in contributions were proposed by the USS Trustee that would have entailed employer contributions rising to between 28.5% and 37.6% and employee contributions to between 13.6% and 18.6% of salary. To put in context, the employer contribution alone could have meant over 11% of all our income would go to fund just USS pensions (if equally distributed across our income streams, that’s over £1,000 annually by each home student).
It depends on how you define the cost of LGPS
You could take the cash cost of employer contributions in an individual year, which was £7.7bn in 2019/20 per the below. Or you could consider this plus the increase in total pension liabilities, less any return on assets held (as the LGPS is a funded scheme).
https://assets.publishing.service.gov.uk/governmen...
The complicating factor on the second route is what accounting standard you use. As the LGPS are massively in deficit based on how they would be accounted for if they were a company final salary pension scheme.
You could take the cash cost of employer contributions in an individual year, which was £7.7bn in 2019/20 per the below. Or you could consider this plus the increase in total pension liabilities, less any return on assets held (as the LGPS is a funded scheme).
https://assets.publishing.service.gov.uk/governmen...
The complicating factor on the second route is what accounting standard you use. As the LGPS are massively in deficit based on how they would be accounted for if they were a company final salary pension scheme.
Rufus Stone said:
Why do you want to know this?
So we can complain about it.So we can point out that the LTA for a Defined Benefit Scheme is almost double than the case for Defined Contribution Scheme
So we can point out that the implied contribution to secure a 2/3 pension at the age of retirement as paid for by the state is enormous (and that this is seldom identified in salary and benefit comparisons between the public and private sector).
ant1973 said:
Rufus Stone said:
Why do you want to know this?
So we can complain about it.So we can point out that the LTA for a Defined Benefit Scheme is almost double than the case for Defined Contribution Scheme
So we can point out that the implied contribution to secure a 2/3 pension at the age of retirement as paid for by the state is enormous (and that this is seldom identified in salary and benefit comparisons between the public and private sector).
And employment in the public sector is open to all.
I prefer the private sector, but I'm fully cognisant that my pension won't be as good.
JagLover said:
It depends on how you define the cost of LGPS
You could take the cash cost of employer contributions in an individual year, which was £7.7bn in 2019/20 per the below. Or you could consider this plus the increase in total pension liabilities, less any return on assets held (as the LGPS is a funded scheme).
https://assets.publishing.service.gov.uk/governmen...
The complicating factor on the second route is what accounting standard you use. As the LGPS are massively in deficit based on how they would be accounted for if they were a company final salary pension scheme.
Thank you. I am interested in the data series over a reasonably extended time period, therefore the cash cost of e'er contributions will be adequate (& simpler).You could take the cash cost of employer contributions in an individual year, which was £7.7bn in 2019/20 per the below. Or you could consider this plus the increase in total pension liabilities, less any return on assets held (as the LGPS is a funded scheme).
https://assets.publishing.service.gov.uk/governmen...
The complicating factor on the second route is what accounting standard you use. As the LGPS are massively in deficit based on how they would be accounted for if they were a company final salary pension scheme.
oyster said:
ant1973 said:
Rufus Stone said:
Why do you want to know this?
So we can complain about it.So we can point out that the LTA for a Defined Benefit Scheme is almost double than the case for Defined Contribution Scheme
So we can point out that the implied contribution to secure a 2/3 pension at the age of retirement as paid for by the state is enormous (and that this is seldom identified in salary and benefit comparisons between the public and private sector).
And employment in the public sector is open to all.
I prefer the private sector, but I'm fully cognisant that my pension won't be as good.
I think if they did, they would be very unhappy about it.
It needs a proper discussion IMHO.
ant1973 said:
oyster said:
ant1973 said:
Rufus Stone said:
Why do you want to know this?
So we can complain about it.So we can point out that the LTA for a Defined Benefit Scheme is almost double than the case for Defined Contribution Scheme
So we can point out that the implied contribution to secure a 2/3 pension at the age of retirement as paid for by the state is enormous (and that this is seldom identified in salary and benefit comparisons between the public and private sector).
And employment in the public sector is open to all.
I prefer the private sector, but I'm fully cognisant that my pension won't be as good.
I think if they did, they would be very unhappy about it.
It needs a proper discussion IMHO.
Back in the day public sector pay was poorer than private but the pension at the end made up for this but now this has become blurred and someone has to pay for it and the OP is wondering HOW MUCH.
RudeBoy said:
ant1973 said:
oyster said:
ant1973 said:
Rufus Stone said:
Why do you want to know this?
So we can complain about it.So we can point out that the LTA for a Defined Benefit Scheme is almost double than the case for Defined Contribution Scheme
So we can point out that the implied contribution to secure a 2/3 pension at the age of retirement as paid for by the state is enormous (and that this is seldom identified in salary and benefit comparisons between the public and private sector).
And employment in the public sector is open to all.
I prefer the private sector, but I'm fully cognisant that my pension won't be as good.
I think if they did, they would be very unhappy about it.
It needs a proper discussion IMHO.
Back in the day public sector pay was poorer than private but the pension at the end made up for this but now this has become blurred and someone has to pay for it and the OP is wondering HOW MUCH.
Public sector pensions were subject to (massive) changes in 2012.
Increased contributions, get less out, retirement age aligned to ever increasing SPA, etc etc etc.
Perhaps the op should familiarise himself with the changes before embarking on an attack concerning a subject he clearly knows very little about.
Increased contributions, get less out, retirement age aligned to ever increasing SPA, etc etc etc.
Perhaps the op should familiarise himself with the changes before embarking on an attack concerning a subject he clearly knows very little about.
Maximus Decimus Meridius said:
Public sector pensions were subject to (massive) changes in 2012.
Increased contributions, get less out, retirement age aligned to ever increasing SPA, etc etc etc.
Perhaps the op should familiarise himself with the changes before embarking on an attack concerning a subject he clearly knows very little about.
They were indeed subject to change.Increased contributions, get less out, retirement age aligned to ever increasing SPA, etc etc etc.
Perhaps the op should familiarise himself with the changes before embarking on an attack concerning a subject he clearly knows very little about.
Most LGPS pension deficits have increased very significantly since 2012, as accounted for under International Accounting Standards, despite steeply rising employer contributions. I know as I see accounts prepared under International accounting standards for entities that employ staff under the LGPS (primarily Academies and FE colleges).
Most private sector final salary pension schemes were closed for a very good reason. Though of course there is an argument that IAS are too strict when it comes to valuing pension deficits.
Maximus Decimus Meridius said:
Public sector pensions were subject to (massive) changes in 2012.
Increased contributions, get less out, retirement age aligned to ever increasing SPA, etc etc etc.
Perhaps the op should familiarise himself with the changes before embarking on an attack concerning a subject he clearly knows very little about.
What attack?Increased contributions, get less out, retirement age aligned to ever increasing SPA, etc etc etc.
Perhaps the op should familiarise himself with the changes before embarking on an attack concerning a subject he clearly knows very little about.
sebdangerfield said:
Is public sector pay now better? I went from public to private sector back a couple of years ago. My pay in the public sector was utterly terrible when compared to someone in the private sector who had similar budget responsibilities and staff and that's before you bring in the fact there was no comparable level of risk management across the two. I accept that's one person in two jobs so it's hardly proof but I'm genuinely interested where the line is blurred; I was under the impression they'd only just come out of a 10 year pay freeze.
It can be hard to compare average public and private sector pay, as the public sector contracts out a lot of the lowest (and sometimes highest!) paid roles to the private sector.Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff