Average civil servant earns less than a private sector worker

Goldenyears

Mozette wrote: »

Well if you join the Civil Service now - if they were taking on rather than getting rid - you'd find that the pension scheme is rather different now for new joiners.

Yes career average is different but actually even more generous to low paid Civil Servants who don't advance much in their career since the acrual rate is 2.3% per year. In fact pension has to be capped at 75% of best final salary to stop the absurd situation of being paid more in retirement (even with the cap basic state pension would take it over 100%).

On the other hand this is decades in the future when who knows what cuts will be made.

Edit: should have added that career average is equally generous for higher paid civil servants entering the CS at say SCS Band 1 and staying in the same pay band for 30-40 years, just an extremely unlikely circumstance.

sjaypink

princeofpounds wrote: »

Well yes actually. To be honest, the annuity rates might have changed by that point so the details might not match exactly (and the amount will probably be lower), but think about it - you will get an income for life without having to do anything. That has to be paid for somehow, it doesn't come from nowhere.

Thought it came from me? I pay nearly a whole £10 a week :cool:

I'll happily exchange that for half a million at retirement though :A *hey, wheres the sarcasm smiley gone?!*

zappahey

Old_Slaphead wrote: »

There are more lower paid workers in the private sector (over a million are on minimum wage - no public sector worker is being paid that little!)

Wrong. There are plenty of public sector workers on minimum wage. The last time there was a minimum wage increase, some people got automatic pay rises to get back up to the minimum.

This argument also ignores the fact that most minimum wage type jobs have been contracted out and thus removed from the public sector average. This can only skew the public sector average upwards.

Old_Slaphead

zappahey wrote: »

Wrong. There are plenty of public sector workers on minimum wage. The last time there was a minimum wage increase, some people got automatic pay rises to get back up to the minimum.

Rather than just making a bland statement that I'm incorrect please give me some evidence to support your assertion of a public sector worker on £5.80 per hour because I've not managed to find any. Even the lowest job grades earn well over £6ph - for example Nortumberland CC is currently advertising for cleaners at £6.30ph

Old_Slaphead

Mozette wrote: »

Not so many really. So you think if you take a job with one of the terms being a final salary pension, that a few years before you get it, when you've had no time to make provision for anything else that it should be withdrawn do you? Then I suppose you'd moan about paying benefits to people with no pension?

No, all benefits accrued to date should be preserved - only arrangements going forward should be subject to review.

BTW my nephew aged 27 is in CSP scheme with retirement age of 60 - so there's up to 33 years worth of employees with lower retirement age still 'in the pipeline'

andykn

princeofpounds wrote: »

Rubbish? No.

Yes, because this is what you said:

princeofpounds wrote: »

some councils at least now ask for a tiny contribution to pension plans now, it's a scratch on the surface and only a recent development.

6% is not tiny and has always been the case, not just "now".

Seriously, it might sound like I'm attacking your hard-working parents, but once you actually understand a little actuarial maths and read into these arrangements it's a really shocking situation. Journalists don't call it the public sector pension timebomb just because it sounds snappy, there really really is a problem here.

I can understand the actuarial maths, thanks, that's how I know that a 6% contribution rate gives a much bigger pension pot (real or virtual) than the 4% common in most private final salary schemes.

treliac

Old_Slaphead wrote: »

BTW my nephew aged 27 is in CSP scheme with retirement age of 60 - so there's up to 33 years worth of employees with lower retirement age still 'in the pipeline'

Why can't that be changed? Local government retirement age has been raised from 60 to 65 and will probably go higher - in line with future govt plans.

princeofpounds

6% is not tiny and has always been the case, not just "now".

6% IS tiny relative to the benefits (which is the important measure) otherwise the council plans wouldn't be £60bn in the red. Looking back it does seem that the councils have asked for contributions for some time, something I wasn't aware of, but a lot of the increases to semi-sensible levels are relatively recent. But do read my last paragraph; it's not the councils that are the main problem, it's the other £940bn of unfunded liabilities.

I can understand the actuarial maths, thanks, that's how I know that a 6% contribution rate gives a much bigger pension pot (real or virtual) than the 4% common in most private final salary schemes.

The difference is that private salary schemes are defined contribution, so the benefits are directly related to the contributions and not an arbitrary promise. There are some defined benefits private schemes still, but they have largely died a death for new entrants precisely because they are so unaffordable.

The combined FTSE 100 pension deficit is about £70bn, comparable in size to the councils alone, let alone the rest of the £trillion. That's pretty crazy..

But to be honest, the councils really aren't the worst offenders. At least they have some funding, unlike the main body of the public sector pensions schemes which have nothing except treasury guarantees.

Andy_L

treliac wrote: »

Why can't that be changed? Local government retirement age has been raised from 60 to 65 and will probably go higher - in line with future govt plans.

Local gov always had a wierd way of calculating earliest retirement age (the rule of 85) which gave long servcie staff a retirement age of 65 which was abolished for future service, past service still kept the right to go at 60.

RobertoMoir

dandy-candy wrote: »

Is the civil service obliged to offer pensions? Why don't they make it so that new staff who want a pension just arrange it themselves privately with a company and not through their employer? Would that work?

Well they could (lets leave aside the wailing from the unions for the moment), they certainly could... however its not as easy as all that.

I am an IT professional, who works in the local government (Actually education) sector. My salary is actually fairly generous compared to the average local govt. wage (actually pretty darn good however you slice it). I'm very lucky to have a decent and secure job in this current financial climate. I do wish more people who worked for central and local govt. had experience in the real world and realised how lucky we are in a lot of respects.

HOWEVER... I could earn a lot more in IT out there in the "real world" should I choose to do so. I know IT is one of the areas which has had a battering in this recession but (with all due modesty) I'm reasonably good at what I do, I don't mind hard work, and people like me are in reasonable demand. The skills I use in the public sector job I have now are very easily transferable to the private sector and I have frequent contact with recruiters trying to pull me away from my current job. So why don't I?

The salary (as decent as it is) is probably about 75% of what I could earn in the "real world", but the pension and holiday allowances I get on top of that make the job's "overall value" very competitive with the private sector indeed. As I say, I do wish more people in the professional levels of the public sector realised how lucky we are in a lot of ways compared to private sector.

So if the govt. were to abolish the very good pension schemes and the like, they'd either recruit a much lower level of employee for the same base salary they pay for many of their jobs, or they would have to increase the salary quite substantially to retain and attract people of the same level they currently have in jobs with skills that transfer to the private sector.