Average civil servant earns less than a private sector worker

andykn

princeofpounds wrote: »

6% IS tiny relative to the benefits (which is the important measure) otherwise the council plans wouldn't be £60bn in the red.

Your sloppieness with facts and figures weakens your argument considerably; how big is the shortfall as a percentage of the overall funds? How much would the contributions have had to be to make up that shortfall? 10% or 6.2%. Whatever way round, 6% cannot be considered "tiny".

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.

Possibly so, but I was disputing your completely erroneous accusation that council workers had been contributing only tiny amounts and onyl recently. My father had been contributing at that level for as long as I can remember, at least back to the 70s and I'm fairly sure since he started in the 50s.

The difference is that private salary schemes are defined contribution,

Read my post agian, I specifically said private final salary schemes.

princeofpounds

Your sloppieness with facts and figures weakens your argument considerably; how big is the shortfall as a percentage of the overall funds? How much would the contributions have had to be to make up that shortfall? 10% or 6.2%. Whatever way round, 6% cannot be considered "tiny".

Not really, council pensions form about 6% of my concerns. You seem to be focused on them because you are a local goverment worker, but it's just the tip of the iceberg.

The total value of assets in council pension funds in England is about £100bn. Assuming they are roughly 70% of the deficit then the deficit plans are probably about one-third underfunded.

I don't know what level of contributions from employees would be required to fill the hole - I might go look for some numbers to figure it out later, but I believe that this level of assets is roughly equivalent to an entire year of English council revenue, which is the alternative source of funding.

So that is pretty big. Remember it's the absolute number that has to get paid somehow.

Possibly so, but I was disputing your completely erroneous accusation that council workers had been contributing only tiny amounts and onyl recently. My father had been contributing at that level for as long as I can remember, at least back to the 70s and I'm fairly sure since he started in the 50s.

It was wrong to suggest that paying contributions in local government was a totally new thing, although the levels have only started to make sense thanks to relatively recent changes, which I mistakenly recalled as being the institution of contribitions. But as I keep saying, I haven't spent too much time looking into councils as they are the best of a bad bunch. In my original post, I only mention them to point out that compared to national government pensions they are better off.

Read my post agian, I specifically said private final salary schemes.

Fair enough - I'm only posting on my tea breaks so have to read quickly and sometimes I don't pick things up. My point that private final salary schemes are dying out precisely because they are unrealistic is an interesting parallel.

princeofpounds

Actually sorry, I have better figures here from the DCLG for the councils. So the council deficit at around £60bn is about equal to one year of council revenue or two and a half years of council tax receipts.

So if we pay that off over 20 years, council tax levels would have to rise by about 12% for those decades.*

http://www.local.communities.gov.uk/finance/ctax/data/ctax0910t3.pdf

* Edit to add: ex-growth, not that Britain is a storming economy these days anyway.

robin_banks

Civil Servants don't work for councils, they work for govt departments.

I've worked for councils, govt depts, charities, and the private sector. I've no idea what the average is.

Neither does anyone else.

Old_Slaphead

andykn wrote: »

Your sloppieness with facts and figures weakens your argument considerably; how big is the shortfall as a percentage of the overall funds? How much would the contributions have had to be to make up that shortfall? 10% or 6.2%. Whatever way round, 6% cannot be considered "tiny".

At the last valuation in March 2007 LA pensions were underfunded by around 15-20%. Given that many of the funds are invested in equities & property (and they are both currently trading lower that March 2007 - for example the FTSE100 is down 16%) and life expectancy and staffing levels have gone up I reckon that the underfunding will now be closer to 30%. Current liabilities will be around £190bn as against funds of £130bn.

Current contributions are approx 6% (average) for staff and around 17% (average) by employer. I would guess that several percentage points on increased contribution would be needed over several years to clawback the current large shortfall.

Politically, in the current economic climate, a large increase in LA employer (taxpayer) support will only further highlight (in the media) the huge cost of unfunded public sector pension liabilities - which are now thought to exceed the national debt at £1.1 trillion.

I have read somewhere future contribution increases will be split more evenly between employer and employee so, at the next pension review, it would seem an extra 2 or 3% from the employee may be required to maintain existing arrangements.

These figures are guestimates based on figures gleaned from newspapers, pension fund accounts etc.

Here's a report in a local Cumbrian newspaper which highlights the issues...

http://www.nwemail.co.uk/cumbrian_councils_face_800m_pensions_shortfall_1_602523?referrerPath=raiders/news

andykn

princeofpounds wrote: »

Not really, council pensions form about 6% of my concerns. You seem to be focused on them because you are a local government worker, but it's just the tip of the iceberg.

I'm not a local govt worker, I just focussed on that because I knew you were wrong in your assertions about local govt pensions and didn't want others to be fooled.

The total value of assets in council pension funds in England is about £100bn. Assuming they are roughly 70% of the deficit then the deficit plans are probably about one-third underfunded.
Fair enough - I'm only posting on my tea breaks so have to read quickly and sometimes I don't pick things up. My point that private final salary schemes are dying out precisely because they are unrealistic is an interesting parallel.

Like the civil service final salary scheme that has been closed to new employees also. Salary levels haven't gone up though.

Goldenyears

Mozette wrote: »

By low paid you mean those on minimum wage topped up with tax credits do you?

Not necessarily. I was merely abbreviating the CS basic grades sometimes called administrative officer (£13K-£19K) and executive officer (£18K-£28K) to "lower paid" where it often happens that they don't advance beyond this, so they would benefit from Career Average relative to Classic, provided the scheme continued to exist unchanged. Nothing to do with tax credits that they may or may not receive.

Old_Slaphead

Mozette wrote: »

I work (and I do mean work before you make another 'smart' remark) in the civil service and it is a fact that when minimum wage goes up, so does the pay of the lowest grade to keep up with it.

I hope you're not accusing me of making 'smart' remarks (if so, would you quote me)

CSs are not on minimum wage - the fact that their pay goes up in line with it is to maintain differentials. My original statement still stands that many in private sector are struggling along on minimum wage but no-one in the public sector is - unless someone knows different and can enlighten us.

Goldenyears

Mozette wrote: »

The basic grade is an AA. AO is one up. Just so you can have your facts right.

Some departments merged AO and AA into one pay band. Remember the CS is not one monolithic entity any more - only in respect of pensions is that true.

Old_Slaphead

Mozette wrote: »

The lowest grade Civil Servants ARE on minimum wage; whenever the minimum wage goes up, the pay of the lowest CS grade goes up so that they are not being paid below the legal minimum. When the minimum wage first came in, the lowest grade got quite an increase.
I am a Civil Servant so I know for a fact.

Which Department are you referring to that gets minimum wage ?

For the DWP (as an example) the lowest pay in 2009 for grade AA was £13100 which equates to around £6.80 per hour (if a 37 hour week is worked)....which is £1.00/hour above minimum wage of £5.80.

http://www.pcs.org.uk/en/department_for_work_and_pensions_group/pay_campaign/pay-offer-letter-2007--2009/appendices/appendix-1/


Some depts ie HMRC get more - I'd be surprised if any get less....perhaps you can enlighten me?