"The public sector pensions bill is out of control"

[Salted_Peanut]

"The latest inflation figures mean that the chancellor will have to find more than £2 billion a year to fund [public sector] pension increases in April," reported the Times.

The Times said:

The mounting cost of gold-plated public sector pensions adds to the fear that there will be tax rises in the budget on November 26 to fill a multibillion black hole in the nation’s finances.

Taxpayers will pay £57 billion this tax year to fund public sector worker pensions, which is now set to increase by £2.17 billion next year in line with today’s figures. Previous analysis for Money found that even if public sector pension schemes closed to new members today, the annual bill for funding existing pension promises would exceed £100 billion by 2050.

“The public sector pensions bill is out of control,” said the former Bank of England economist Neil Record.

https://www.thetimes.com/business-money/money/arti...

[Countdown]

I assume this refers to unfunded rather than funded schemes?

AIUI funded schemes (like the LGPS) are all in surplus.

https://archive.ph/RAomb

[scenario8]

Good luck to any decision maker attempting meaningful savings to the public sector pensions liability - even if they personally believe meaningful changes are desirable or necessary.

The word meaningful might be open to debate there!

[Wills2]

This is the issue when you base your pension schemes on a pay-as-you-go Ponzi scheme.

[Countdown]

Wills2 said:

This is the issue when you base your pension schemes on a pay-as-you-go Ponzi scheme.

It should be mentioned that not all PS pensions are PAYG. Many (probably most) are funded.

The biggest unfunded pension scheme is the State Pension.

[s1962a]

25% of the electorate are 65 or older, and they got time on their hands and they do talk. Some of them have found whatsapp and like to spam everyone with forwarded crap, and no doubt will scare each other that the government are going to force them to be live in a cold dark house with no heating and no pension.

Good luck to any party trying to take anything away from them (and wanting to get re-elected)

[BikeBikeBIke]

And, of course, when the Chancellor helps herself out of pension pots in the budget she won't touch public sector pensions which have value far in excess of even larger private pension pots because on paper there is no pension pot...

We are where Russia and East Germany were. Instead of wanting to create weath, people want to get into the public sector so less wealth is created, so more taxes, so less workers, so more taxes. A viscious circle.

[Wills2]

Countdown said:

Wills2 said:

This is the issue when you base your pension schemes on a pay-as-you-go Ponzi scheme.

It should be mentioned that not all PS pensions are PAYG. Many (probably most) are funded.

The biggest unfunded pension scheme is the State Pension.

Armed forces/NHS/teachers and Civil service are all PAYG according to this link:

https://fullfact.org/news/nhs-pension-scheme-drain...

[Sway]

Countdown said:

Wills2 said:

This is the issue when you base your pension schemes on a pay-as-you-go Ponzi scheme.

It should be mentioned that not all PS pensions are PAYG. Many (probably most) are funded.

The biggest unfunded pension scheme is the State Pension.

Absolutely not the case that most are funded. Not even close.

[Countdown]

Sway said:

Countdown said:

Wills2 said:

This is the issue when you base your pension schemes on a pay-as-you-go Ponzi scheme.

It should be mentioned that not all PS pensions are PAYG. Many (probably most) are funded.

The biggest unfunded pension scheme is the State Pension.

Absolutely not the case that most are funded. Not even close.

There are 108 LGPS schemes in the UK. These all operate on a "funded" basis (meaning there is a pot of money into which Employers and Employees both contribute to and where the pot of money is used to pay out for pensions). Somebody has mentioned the unfunded ones above (TPS, NHS, Military)

Of the ones in England 70% were in surplus at the last triennial valuation. Given how bond yields have changed during the last 3 years I'd be stunned if they weren't all in surplus when the 2025 valuation is completed.

[lauda]

Much of the LGPS sector is in surplus. But those schemes only have liabilities of c.£330bn. The unfunded schemes are over £1tn.

[OutInTheShed]

This is the problem when you have far too many public sector employees.

The government is in an impossible situation, because it has too many staff, but can't reduce numbers because it costs too much to make them redundant or retire them early.

[craig1912]

They should close them to new entrants and cease accrual other than on current salary, just as the majority of private company’s had people had to do. Then just DC going forward.

[768]

Salted_Peanut said:

"The latest inflation figures mean that the chancellor will have to find more than £2 billion a year to fund [public sector] pension increases in April," reported the Times.

Gosh. That's almost 1% of what Reeves has added to borrowing so far.

[Countdown]

OutInTheShed said:

This is the problem when you have far too many public sector employees.

Hopefully Reform-led Councils will start cutting out the waste and deadwood.

[Wills2]

Countdown said:

There are 108 LGPS schemes in the UK. These all operate on a "funded" basis (meaning there is a pot of money into which Employers and Employees both contribute to and where the pot of money is used to pay out for pensions). Somebody has mentioned the unfunded ones above (TPS, NHS, Military)

Of the ones in England 70% were in surplus at the last triennial valuation. Given how bond yields have changed during the last 3 years I'd be stunned if they weren't all in surplus when the 2025 valuation is completed.

The number of schemes doesn't matter the size of the PAYG ones does, 5 out of the 6 largest are PAYG and that's the issue.

[FourWheelDrift]

This why nationalising the utilities or the rail network (which they are doing) is a very bad idea.

[Tommo87]

Wills2 said:

Countdown said:

There are 108 LGPS schemes in the UK. These all operate on a "funded" basis (meaning there is a pot of money into which Employers and Employees both contribute to and where the pot of money is used to pay out for pensions). Somebody has mentioned the unfunded ones above (TPS, NHS, Military)

Of the ones in England 70% were in surplus at the last triennial valuation. Given how bond yields have changed during the last 3 years I'd be stunned if they weren't all in surplus when the 2025 valuation is completed.

The number of schemes doesn't matter the size of the PAYG ones does, 5 out of the 6 largest are PAYG and that's the issue.

Doesn’t LGPS stand for LOCAL Government Pension Scheme? As in local councils pensions and not central government civil services?

[Wills2]

Tommo87 said:

Wills2 said:

Countdown said:

There are 108 LGPS schemes in the UK. These all operate on a "funded" basis (meaning there is a pot of money into which Employers and Employees both contribute to and where the pot of money is used to pay out for pensions). Somebody has mentioned the unfunded ones above (TPS, NHS, Military)

Of the ones in England 70% were in surplus at the last triennial valuation. Given how bond yields have changed during the last 3 years I'd be stunned if they weren't all in surplus when the 2025 valuation is completed.

The number of schemes doesn't matter the size of the PAYG ones does, 5 out of the 6 largest are PAYG and that's the issue.

Doesn t LGPS stand for LOCAL Government Pension Scheme? As in local councils pensions and not central government civil services?

Yes that's the one in the top 6 that is funded, the operative word isn't really local it's government it's still a public service pension scheme.

https://commonslibrary.parliament.uk/research-brie...

[ChocolateFrog]

s1962a said:

25% of the electorate are 65 or older, and they got time on their hands and they do talk. Some of them have found whatsapp and like to spam everyone with forwarded crap, and no doubt will scare each other that the government are going to force them to be live in a cold dark house with no heating and no pension.

Good luck to any party trying to take anything away from them (and wanting to get re-elected)

Made the mistake of visiting a supermarket at 1100am on a weekday the other day.

I didn't know that many old people existed.