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  • FIRST POST
    • Muscle750
    • By Muscle750 20th Sep 16, 7:07 PM
    • 640Posts
    • 205Thanks
    Muscle750
    And yet another public sector story
    • #1
    • 20th Sep 16, 7:07 PM
    And yet another public sector story 20th Sep 16 at 7:07 PM
    Friend of mine just took retirement at 60 and has basically implied he never thought he /they would have such a good income from the pension theyve accumulated.Worked for the civil service 30 years. Mine however sadly doesnt forcast even half of what they are getting and ive got to work till im 67 another 14 years and ive been paying in 25 years plus of course we had the FS ripped from under our feet some 10 years ago the joys of the private sector And please dont tell me that theyve paid alot more in so they should get more than 50% yes ..............50% than what im forcast to get. Sometimes i really do wonder why i bothered joining the pension scheme at work
Page 3
    • Andy L
    • By Andy L 21st Sep 16, 11:22 PM
    • 7,781 Posts
    • 5,885 Thanks
    Andy L
    http://www.telegraph.co.uk/finance/personalfinance/pensions/10336591/Gap-widens-on-public-vs-private-pensions.html

    Now someone please tell me im talking out my backside
    "We are staring at a horrible scenario in which public sector workers will retire on two thirds of their salary, while private sector workers will be lucky to get anywhere near 40 per cent in retirement."

    I think this just about justifies my comment
    Originally posted by Muscle750
    From that link
    "The total number of people with a so-called final salary pension - which typically provides two-thirds of a workerís last pay packet in retirement"

    I don't believe there are any parts of the mainstream public sector that still have a 1/60ths final salary pension option.
    • hyubh
    • By hyubh 22nd Sep 16, 12:04 AM
    • 1,506 Posts
    • 996 Thanks
    hyubh
    A close relative of mine paid half of his income into a combination of life insurance / critical illness (he was self-employed), pension & savings. His lifestyle was very similar to mine, although some of his colleagues behaved like grasshoppers and spent theirs.
    He & I now both enjoy a comfortable, but not extravagant life.
    Originally posted by jackyann
    Claiming what you've actively done for your pension provision is anything like this close relative did is absurd. Oo, I do believe I'm coming over all Mr Muscle

    I do think that there is a debate to be had about sustainable pensions (and I have friends who worked in big institutions like insurance companies and banks who have similar pensions to mine)
    What 'debate' would that be? The horse has long bolted when it comes to private sector DB.

    I had a young friend, who between A levels and university did a work placement with one of the big finance companies. For 6 months she was paid at exactly the same rate as me - an exoerienced clinical nurse specialist.
    So what? Being 'an experience clinical nurse specialist' doesn't make you a higher grade of person. Your 'I genuinely think that I was worth what I was paid' rhetoric shows you were in it for the money as much (and as little) as everyone else.
    • jimi_man
    • By jimi_man 22nd Sep 16, 1:30 AM
    • 81 Posts
    • 70 Thanks
    jimi_man
    OP

    I'm in a public sector scheme. It pays out 2/3 after 30 years when I'm about 51 (works out to be effectively a 1/45th scheme). I paid 11% for most of my career, about 14% now.

    The employer contribution is variable - it's an unfunded scheme, so whatever is needed to make up the shortfall. But it's over double my contribution, 30% estimated at the moment.

    I'm not going to justify it or say I think I'm worth it because of the job I do or defend it, since there is little point. It's an extremely generous scheme and I'm lucky to have it.

    It was simply a choice made when I was young. Despite the competition to join, it was open to anyone.

    It is significantly more generous than DC pensions of my friends, which, like so many other things, unfortunately I have to put down to 'life just isn't fair'.

    You'll be pleased to know that it's been phased out and replaced with a CARE scheme. Still an extraordinarily good deal, but not quite as valuable.

    In answer to your original point - I can't really defend it, any more than people in the city can defend seven figure bonuses. Some pensions are good, some are mediocre and some are rubbish. If you're unhappy with your job, your salary and your pension, then it's time to do something about one or all of those things.
    • bigadaj
    • By bigadaj 22nd Sep 16, 5:11 AM
    • 7,387 Posts
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    bigadaj
    It would be nice for a bit of overall objectivity.

    For many years public sector jobs were in the main paid less than private sector, this began to change at the end of the last century. Also at that time the value of db pensions was underestimated and it was the start of outsourcing meaning that many poorly paid jobs moved from oublic to private sector and their terms and conditions wer often reduced.

    People should be paid the going rate for the job, whatever that is, largely controlled by supply and demand. Absolute hurdles to entry are very rare in most trades or professions, we should have been producing far more doctors over many decades rather than importing them from often less developed countries, however short Termism and a misguided sense of limiting numbers to maintain quality and reduce costs prevailed.

    What should be highlighted is the overall package on offer, if there's still a db pension on offer then try and value it, that could easily turn a lower salary into a more generous package than higher pay with a basic DC scheme attached.

    Alternatively just take away the pension and pay the salary instead, ideal situation if only the public sector could absorb the one off hit rather than the current situation where pension liabilities can safely be forgotten a bout for many decades, when it's somebody else's problem.
    • marlot
    • By marlot 22nd Sep 16, 6:36 AM
    • 2,766 Posts
    • 1,911 Thanks
    marlot
    The difference between my 5% and the quoted 16.4% is summing it up in a nutshell. .
    Originally posted by Muscle750
    When I worked in the private sector, after the final salary scheme closed down, I topped up my employer's payments to ensure that at least 25% of my gross salary was going into my pension. If your employer is only putting in 5% then you should consider doing likewise.

    I've since joined the civil service (joined when I was 49). In my experience, the CS welcomes older applicants if you've kept your skills up to date. The salaries are lower, but the pensions are better.

    In the agency I work for we're members of Alpha, the career average (not final salary) scheme. Yes, we're lucky to have it, and it works particularly well for people like me, in the later stages of their career. But the overall package is what matters, and our salaries are £20k below market. Last time we went out to recruit 20 roles, we managed to fill 5 - despite the benefit of the pension scheme.

    If you have the skills, we could appoint you to one of the roles tomorrow. They are advertised on civil service jobs - just get your application in.
    Last edited by marlot; 22-09-2016 at 6:41 AM.
    • pathtofreedom
    • By pathtofreedom 22nd Sep 16, 7:29 AM
    • 798 Posts
    • 1,042 Thanks
    pathtofreedom
    At my last job my employer paid 9% "free" contributions and then matched upto another 8% on top and I used to pay 16% as I was a late starter so had some catching up to do, but there are some places you can get better than 5% matching in the private sector. Admittedly my new job isn't one of them, but I thought it was worth doing for the experience and I knew it was effectively a pay cut working here even though the basic was slightly more it didn't compare to the that pension, also I don't plan on staying here forever.

    I am still only paying in 16% right now with only a 3% "free" and 3% match, as I can't afford much more than that right now, but hopefully I'll be able to improve that once I know what the bonus is like, or I move onto a new job to get my contributions back to closer to 30% altogether.
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    • Kynthia
    • By Kynthia 22nd Sep 16, 9:18 AM
    • 4,459 Posts
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    Kynthia
    The private sector varies wildly. In my family one person works in city firm that has a death in service amount of 12 times salary and a generous pension scheme that pays up to 20% employer contributions as you stay there longer or get older (I can't remember which). Yet another works in a tiny local firm that's about to start auto enrolment and will only pay 1% employer contributions. The thing is that job is good for it's experience and training, flexibility around school hours and sick children. I guess when people are looking for a job the financial remuneration package isn't always the priority, but I do think the pension shoukd be highlighted as part of it so that people become more educated about its value.
    Don't listen to me, I'm no expert!
    • hyubh
    • By hyubh 22nd Sep 16, 1:24 PM
    • 1,506 Posts
    • 996 Thanks
    hyubh
    In answer to your original point - I can't really defend it
    Originally posted by jimi_man
    I will then:
    - Given what you've quoted, I imagine you're either a police officer or a firefighter, and in the pre-2006 version of the PPS or FPS.
    - Firefighting in particular is physical work, and both can be dangerous, ergo a lower NRA than normal is reasonable.
    - The is an obvious reason to ensure police officers have a comfortable retirement, which isn't to impinge upon the integrity of any particular individual, let alone the whole group.
    - The employee contribution rate has always been very high for the PPS and FPS compared to other FS schemes, both public and private sector.
    - Double accrual for the last ten years then a relatively early NRA, back in the day, was a reasonable strategy for first keeping very experienced people still in their prime, then saying 'thanks very much, but goodbye' before they got actually knackered (so to speak). General improvements in mortality changed things, however...
    - ... the 'retire on 2/3rd final salary after 30 years' structure hasn't been in place for new recruits for over a decade.
    • JoeCrystal
    • By JoeCrystal 22nd Sep 16, 4:32 PM
    • 1,141 Posts
    • 621 Thanks
    JoeCrystal
    When I worked in the private sector, after the final salary scheme closed down, I topped up my employer's payments to ensure that at least 25% of my gross salary was going into my pension. If your employer is only putting in 5% then you should consider doing likewise.

    I've since joined the civil service (joined when I was 49). In my experience, the CS welcomes older applicants if you've kept your skills up to date. The salaries are lower, but the pensions are better..
    Originally posted by marlot
    I started at 24 upon realising that I haven't got a pension scheme (and stumbling into this forum) and was disappointed to find out that my employer had stakeholder pension scheme which no one join. Found an IFA back in 2010 and paid very reasonable £300 to decide on the investment choices and private pension scheme and pay 25% of my salary in, (currently 10% with odd top up to bring it in line to 25% overall if I had a good month).

    Needless to say, five years down the line, I had another appointment with an IFA, £500 fee to move my private pension scheme (paid from pension fund itself) and set up an ISA S&S on top to make my retirement more flexible in the long term.

    Despite all this, I am still envious of even the least generous public and private defined benefit pension scheme or anyone with closed ones as well, hence, it is my intention, maybe a decade or so, to find a job in public sector (once I paid my flat off). purely to take advantage of pension scheme (and general better working conditions). Kinda inspired by marlot's posts regarding finding a job in public sector later in life. (I like the thought working in the Civil Service myself.)

    Muscle750, you may be disappointed by your pension provision but the gap between you and your friend are the same or even worse than the gap between you and everyone else who are less fortunate such as no defined benefit pension scheme and so on. You pointed out that you had FS ripped away from you, well, I am outraged, outraged that you are so lucky to have that kind of pension scheme to pay originally.

    As for my employer, so far, started from auto-enrolment three years ago at 1% from me and 1% from the employer, the work pension fund is only 5% of my total pension provision but every little helps!
    Last edited by JoeCrystal; 22-09-2016 at 4:43 PM.
    • johndough
    • By johndough 22nd Sep 16, 4:39 PM
    • 420 Posts
    • 153 Thanks
    johndough
    Hi

    Public Sector pensions are not better than private sector pensions,

    ###########

    Sorry it does not get away from the fact that the public sector pensions are far superior than ours and the tax revenues are funding them Its even been reported of late that in some cases within the public sector people who retire are better off with their pension than their salary.

    ##########

    since they are both the same.

    You can (and people have) set up as a small private concern - cleaner/caretaker/school meals - provider to their local authority and have a scheme identical to the public sector ones.

    Prudential did an 80ths scheme that was identical enough for TUPE needs.

    So you can have one at least as good, if not better.
    • johndough
    • By johndough 22nd Sep 16, 5:00 PM
    • 420 Posts
    • 153 Thanks
    johndough
    Hi

    I posted a snippet recently, from Cambridgeshire Admin, and most of the LGPS figures will be available online.

    #####

    Can anyone on here please confirm what their public sector employer contributes percentage wise to their pensions .

    ##############

    Lunchtime UK 20.0%
    Avocet Cleaning Services Ltd 24.2%
    Cater Link 20.0%
    Are 3 examples of private sector providing PS level of pensions and an indicator of the employer level of contributions.

    http://pensions.cambridgeshire.gov.uk/wp-content/uploads/2014/04/140331-Cambridgeshire-2013-Final-Valuation-Reportpdf-2.pdf

    ####################




    • nicknameless
    • By nicknameless 22nd Sep 16, 5:34 PM
    • 615 Posts
    • 368 Thanks
    nicknameless
    Newsflash - idiot post prompts 3 pages of the same old same old.
    • bigadaj
    • By bigadaj 22nd Sep 16, 6:26 PM
    • 7,387 Posts
    • 4,424 Thanks
    bigadaj
    Hi

    I posted a snippet recently, from Cambridgeshire Admin, and most of the LGPS figures will be available online.

    #####

    Can anyone on here please confirm what their public sector employer contributes percentage wise to their pensions .

    ##############

    Lunchtime UK 20.0%
    Avocet Cleaning Services Ltd 24.2%
    Cater Link 20.0%
    Are 3 examples of private sector providing PS level of pensions and an indicator of the employer level of contributions.

    http://pensions.cambridgeshire.gov.uk/wp-content/uploads/2014/04/140331-Cambridgeshire-2013-Final-Valuation-Reportpdf-2.pdf

    ####################




    Originally posted by johndough
    Your examples all appear to be small companies with a few directrix and turnover of around £200k.

    This would suggest that the directors are the permanent staff benefiting from the apparently generous level of funding, with the cleaners and other employed staff probably in zero hours contracts.
    • hyubh
    • By hyubh 22nd Sep 16, 9:18 PM
    • 1,506 Posts
    • 996 Thanks
    hyubh
    You can (and people have) set up as a small private concern - cleaner/caretaker/school meals - provider to their local authority and have a scheme identical to the public sector ones.
    Originally posted by johndough
    Sure, but the pension cost (which is not fixed, yet uncontrollable) makes that untenable to most...

    Lunchtime UK 20.0%
    Avocet Cleaning Services Ltd 24.2%
    Cater Link 20.0%
    Are 3 examples of private sector providing PS level of pensions and an indicator of the employer level of contributions.
    Exactly - insanely expensive for most businesses. The fact that there is a legal requirement for contractors to protect the pension rights of public sector staff transferred to them is no evidence that 'public sector pensions are not better than private sector pensions'. In fact, in the LGPS case, the increasing chance of such businesses opting for admission body status over the broad compatibility option (while it still exists) is evidence to the contrary.
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