Public Sector workers laughing all the way to the bank

Old_Slaphead

tek-monkey wrote: »

So you are saying that the employer contributes 20% of your salary to a pension scheme, when you contribute 7%? Is this right? Too late to do the maths, but for a 7% contribution I get 1/60 of my final salary as my pension. Does that add up? Although at 33 and just started I wont be reaching full pension!

FS pensions cost the equivalent of 30-34% of salary so, if anything, I'm probably understating the benefit.

baileysbattlebus

Old_Slaphead wrote: »

FS pensions cost the equivalent of 30-34% of salary so, if anything, I'm probably understating the benefit.

OH pays 7% and his employer pays 13% -

Mine was a non contributory pension - the company paid 17% it was in my pension documentation when I started work there.

I have a second one - I paid 4% and company about 13% - that one has had a shortfall - and the company have already paid in over £20 million to cover it. That one I won't take until I'm 60 - unless the scheme is starting to look a bit dodgy or if there is another large shortfall. I'm not sure how often a company will cover a shortfall - even if they are large and profit making (big US drug company).

All are fully funded final salary schemes - I took my biggest pension at 50 - OH will take his next year - when he is 56 - it will be interesting to see what the state of play is with his scheme when he gets the next annual update. It has been absolutely fine up to now, with no shortfall or losses yet. He has been there over 30 years. But if it has lost money during the last year - we might bring his retirement forward a bit.

mrstinchcombe

CLAPTON wrote: »

a police officer starting at 20 could therefore retire at 55 on half pension plus a tax free lump sum of 2 x annual salary, with the pension indexed linked for life

believe me that is gold plating...

lets say he was earning 40k in todays values

to buy that sort of pension at 55 years would cost about £1 million

if he had contributed 9.5% for 35 years even at 40k that would be £133k

not a bad return and definitely gold plated.

Please enlighten me as I genuinely don't know the answer. But assuming you put 9.5% of your income in a bog standard pension your average private sector worker gets, whats the return when you retire?

CLAPTON

mrstinchcombe wrote: »

Please enlighten me as I genuinely don't know the answer. But assuming you put 9.5% of your income in a bog standard pension your average private sector worker gets, whats the return when you retire?

It depends upon what the employer adds.... some add nothing and some may match your contribution


so on the same basis then if the employer added nothing and you retired at about 55 then you would get a pension of about 2,700 per annum i.e. about 225 per month or about 7% of his salary

and if the employer matched then it would be double that.

NB .. the new pension arrangments that come into force on 2012 will force employers to add only 4% minimum of salary


I have to say I've made very very crude assumptions but I'm just trying to show what an amazing pension deal that allows some-one with 35 years service to retire at 55 on an indexed linked pension and half his final salary

and for the avoidance of doubt, I'm not jealous as I am the beneficiary of a generous index linked final salary scheme but I'm just realistic about the true cost.

mrstinchcombe

So what makes it right and fine for you to have a gold plated pension but not Police Officers?

donaldtramp

mrstinchcombe wrote: »

So what makes it right and fine for you to have a gold plated pension but not Police Officers?

BECAUSE the company is taking the risk to cover the final salary pension.
There are very few in the private sector that have guaranteed pensions and the current government has expanded the public sector massively and quietly brushed under the carpet the fact about how much their pensions are going to cost.

mrstinchcombe

But if his company is risking paying out such a large and costly pension then the risk is it will over burden itself and go bust. The result of this is mass redundancies as the company fails leaving an unfair burden on the tax payer through benefits.

I agree that very few in the private sector have a gold plated pension but for someone to protest against such pensions whilst enjoying their own is a little hypocritical.

I'm not sure who the customers are for the company they work for but essentially they are funding his pension in the same way the taxpayer funds the pensions in the public sector. Obviously the difference being the taxpayer paying for the pensions in the public sector is compulsary and they can't vote with their feet and go elsewhere.

tonycarew

I for one think that after 30 years service a Police Officer deserves his or her so called 'Gold Plated' pension!

CLAPTON

mrstinchcombe wrote: »

So what makes it right and fine for you to have a gold plated pension but not Police Officers?

I made no judgement about the wrongs and rights of final salary schemes... I am just saying what the facts are
and they are wonderful schemes for long term employees but very expensive those that are having to pay for them.

I made no judgement about the value of police officers for society, but commented upon the cost of the schemes.

I am very grateful for the opportunity of enjoying such a scheme but recognise that it is very costly

Maybe everyone should enjoy such a pension scheme and it should be funded by the government so it's fair for everyone... it would of course mean higher taxes but it would be fair.

I'm sure you would support higher taxes so everyone could benefit in a fair way

davilown

I think I have to agree with Clapton to a certain extent as the police pension is an extremely generous pension in comparison to some other public sector pensions. Why can't they work till they are 65 as well?

Yes, they may not be as fit, but they could still provide a presence and peace of mind to the public.