Crunch time for council workers’ golden pensions

Old_Slaphead

Andy_L wrote: »

Must have missed a post, I've seen no posts from Davesnave (on this thread) saying that he was only a teacher for 20 years

He didn't - it was my calcs based on an average £35000 salary and using 1/60th accrual rate.

Could of course use 1/80ths, 3x tax free cash and retirement age of 60 but that would make comparison with private fund required more difficult..... and it probably wouldn't make that much difference.

Former_Spice

Old_Slaphead wrote: »

I was riduculed on some other thread for saying that the true public sector employers (ie taxpayers) contribution required to provide for their employees pension was in excess of 30%.

Seems like the figures have now been ratified by PwC

http://www.telegraph.co.uk/finance/personalfinance/pensions/6106471/Pensions-apartheid-gap-widens-to-17300.html

Won't affect me too much but how are the next generation going to be able to afford this colossal cost in 20+ years time ??? It's about time we adopted the German model and made a 'balanced budget' a legal requirement of government.

Or how about starting all pensions (including public sector ones) from the age of 66 and increasing up gradually to 70 over the next 20 years ????

That article is ridiculous. So many errors.

Local Council employees aren't Civil Servants who have an enitrely different pension scheme. The article is confusing the two.

Employee contributions are 5.5-7.5% of salary not 1.5%.

39 years of paying for it is worth at 60.
a. For past contributions 39/80 * pay with a reduction of a quarter for not working to 65 which is 37% of salary. Where do they get a salary of £79000 from to leave on £29K (37% of that)!!?!?!?!?! How much do they think care workers and school dinner ladies get paid?
b. Future contribitions
39/60 * Pay with a quarter knocked off. There calculations are still a million miles from reality.

The claim of a quarter of council tax is also made up. The source of that was somone making up (based on knowing the ages of people not yet employed) that a quarter of future increases would go to fund the £80 a week gold plated fat cats. The gutter press changed that to a quarter of the whole thing which is impossible.

Old_Slaphead

Former_Spice wrote: »

That article is ridiculous. So many errors.

Local Council employees aren't Civil Servants who have an enitrely different pension scheme. The article is confusing the two.

Employee contributions are 5.5-7.5% of salary not 1.5%.

39 years of paying for it is worth at 60.
a. For past contributions 39/80 * pay with a reduction of a quarter for not working to 65 which is 37% of salary. Where do they get a salary of £79000 from to leave on £29K (37% of that)!!?!?!?!?! How much do they think care workers and school dinner ladies get paid?
b. Future contribitions
39/60 * Pay with a quarter knocked off. There calculations are still a million miles from reality.

The claim of a quarter of council tax is also made up. The source of that was somone making up (based on knowing the ages of people not yet employed) that a quarter of future increases would go to fund the £80 a week gold plated fat cats. The gutter press changed that to a quarter of the whole thing which is impossible.

I suggest that you carefully work out how much you pay into your pension and how much you expect out of it after retirement. Then you will see how extravagant the scheme is.

nb - the PwC report, as referenced in the Telegraph, makes no specific mention of Local Government pensions.

baileysbattlebus

Old_Slaphead wrote: »

He didn't - it was my calcs based on an average £35000 salary and using 1/60th accrual rate.

Could of course use 1/80ths, 3x tax free cash and retirement age of 60 but that would make comparison with private fund required more difficult..... and it probably wouldn't make that much difference.

Davesnave said he was a teacher for 33 years. So he was probably 7 years short of a full pension assuming the accrual period is normally 40 years.

Each year of reckonable service, with part years counting pro rata, provides an annual
pension of 1/80th of the final average salary, and a lump sum of 3/80ths of the final average salary. Pensionable part-time service counts pro rata as reckonable service.
A teacher retiring with forty years' reckonable service will, therefore, receive a pension of half his or her average salary and a tax free lump sum of 1½ times his or her average salary, whatever that salary is at the time of retirement.

Pensionable service = 40 years

Final average salary = £35,703

Pension
£35,703 x 40 = £17,851.50 (per annum and taxable)
80
Lump Sum

£35,703 x 40 x3 = £53,554.50 (tax free)
80

If you use 1/60th accrual instead the pension would be about £23k for a full 40 years service - a big, big difference. With a lump of about £72k

If a teacher were to retire early say after 33 years at age 53 their pension based on the final salary of £35,703 would be about £11.6k - using the standard 3% reduction for every year you go before the age of 60 (it's that in the private sector- not sure about the teachers pension). Using the 1/60th accrual that £11.6k becomes about £15.5k

I think most lower level civil servants are on 1/80th accruals too - the max they can receive is half salary for 40 years employment.

IMHO, it's decent but not brilliant - and I think the teachers contribution is 6% of salary.

Old_Slaphead

baileysbattlebus wrote: »

Davesnave said he was a teacher for 33 years. So he was probably 7 years short of a full pension assuming the accrual period is normally 40 years.

Where does he say that?

Situation is a whole lot different if retirement was 12 or so years early and there was a £50k tax free lumpsum. Saying poor teacher X only gets £12k for 33 years at the chalkface isn't quite the whole story is it ?????.

Any teacher currently retiring at 65y/o (assuming £35000 salary) with 33 years service would get just under £20,000 pa pension.

lemonjelly

bendix wrote: »

you just don't get it, do you carolt?

What people are !!!!ed off about is the unfair treatment of private sector employees who are expected to make their own provision for pensions, whilst at the same time paying extra taxes to subsidise public sector pensions.

It needs to be fair and equitable. What is stopping public sector employees having to do what we in the private sector do - make our own provision?

Of course, you wouldnt get it, would you? You stand to benefit from the status quo, being a teacher.

What nonsense. You spend the best part of 2 threads belittling public sector workers, exclaiming how much better it is to be in the private sector, & then post this.

Hypocrite.

inspector_monkfish

who is Paul Griffiths ?
he's doing alright....

http://fantasyfootball.skysports.com/

bendix

lemonjelly wrote: »

What nonsense. You spend the best part of 2 threads belittling public sector workers, exclaiming how much better it is to be in the private sector, & then post this.

Hypocrite.

you need to learn to read.

go away, have a little think, and then come back and try again.

Andy_L

baileysbattlebus wrote: »

I think most lower level civil servants are on 1/80th accruals too - the max they can receive is half salary for 40 years employment.

Theres no difference between grades in pension entitlements. it's a question of when they joined.
It was originally 1/80ths plus a 3x lump sum, NRA 60, contributions 1.5%
It then changed to 1/60ths with no lump sum, NRA 60, contributions 3.5%
Now it's a 2.8% career average scheme, NRA 65, contributions 3.5% and an agreement for cost sharing.

At the time 1/80ths plus lump sum was broadly equivilent to 1/60ths, with changes in longevity etc 1/60ths is now better.

lemonjelly

bendix wrote: »

you need to learn to read.

go away, have a little think, and then come back and try again.

No, you need to learn to be consistent.

Don't like your lot in the private sector? Leave, get a public sector job & the associated pension.

Some of your comments have been very good. Others quite offensive. However the above comment is a clear contradiction (not your first on this).

No doubt you've had exponential pay increases in the boom years. Way above the increases in the public sector.

Be consistent and fair. You cannot lambast "whinging public sector workers" (your words) and then complain about your poor poor life in the private sector.

Besides, you're gonna retire abroad with your cash mountain, so why'd you care?