We are all in this together, well not if you are in a union.

marklv

bigheadxx wrote: »

If public sector pensions are funded then how do you explain the £1 trillion unfunded liability to the taxpayer of public sector pensions?
http://www.managementinpractice.com/default.asp?title=Public-sectorpensioncontributions%22outofkilter%22&page=article.display&article.id=20970

Because previous pensioners are generally living beyond the expected period. In 1980 people were expected live to around 80, but now many are alive and healthy at 95. This is where the problem lies. And also because previous governments have failed to adequately budget for the financing of the so-called 'unfunded' public sector pension schemes.

marklv

Old_Slaphead wrote: »

Public sector schemes are, in the main, not funded For example NHS, Defence, Civil Service, Teachers are a few of the unfunded schemes.

To pay out accrued liabilities ie if everyone decided to transfer their pension pots out to a private scheme would cost around £1 trillion - hence that's the sum future generations will be expected to pay out for historical pension commitments (that's in addition to the £1 trillion public sector debts and £400bn PFI commitments outstanding)

Funded schemes like LGPS should be renamed as "part-funded" because they're facing massive shortfalls - but that's a story for the next government.
Private FS schemes have to, by law, address underfunding issues - but public schemes can simply ignore them

OK, so what's your point? If the schemes are unfunded, as you claim, then the government had better fund them! This is the fault of the government, not the poor !!!!!!s who work in the civil service etc. If the schemes have to be funded through tax revenue, so be it.

Spartacus_Mills

JasonLVC wrote: »

My post was in response to the statement that every country charges income tax. No they do not.

My post was a reply to that, not to pick a fight, but because I was genuinely interested to know the reply. From your post you appear to be rather knowledgeable on this issue.

marklv

Andy_L wrote: »

You are wrong, the employer & employees contributions in the unfunded schemes (C Service, NHS, Teachers etc - everyone except LGPS, Universities & MPs AIUI) is used to pay the pensions of retired members.
Any excess/shortfall goes back into/comes out of the big treasury pot (ie the taxpayer). It is, if an excess, not invested or saved.
The employers contributions exist only to make the employing department aware of the true cost of employing staff (and obviously there's "robust debate" about what assumptions should be used to calculate that employers calculations)

In that case, the notional employer pension contribution needs to be added to the total salary in order to find the 'true salary'. This latter amount is what the government should be budgeting for, and should have budgeted for in the past. If the government hasn't done this, then they have only themselves to blame. The pension should be treated as part of the overall salary cost.

Kohoutek

marklv wrote: »

If the schemes have to be funded through tax revenue, so be it.

That's probably not going to happen though, is it? Asking for more money for public sector pensions after Brown took £5 billion every year from private pensions is borderline politically impossible. Expect a 'renegotiation' over the next few years.

marklv

chewmylegoff wrote: »

if the employee's pension contribution goes up:
(i) your net salary goes down
(ii) your pension entitlement remains exactly the same

have you been given a pay cut? to assist you with answering the question, the answer is yes.

No! The net salary might be lower, but the base salary is exactly the same. This is not what I define as a pay cut. So, by your reasoning, contributing to an AVC is giving yourself a pay cut, is it? Nonsense.

chewmylegoff wrote: »

luckily for me it only takes one brain cell to understand the difference between funded and unfunded. your brain is obviously so large and complex you are struggling with the concepts involved.

You're just playing with words to make yourself look clever when you're not.

chewmylegoff wrote: »

no, i am thinking of the civil service scheme and the other similar defined benefit public sector schemes.

there are no assets, not even "safe high interest ones". the accounting on your payslip is an academic exercise.

the liabilities will be met entirely from future tax revenues and borrowing (exactly as the schemes' current pensioners are being paid from current tax revenues and borrowing). contact your magical actuary or your pension scheme trustees if you want some confirmation of this.

Even if what you say is true, all this should have been budgeted for by the government. There is no shortfall, as the pension costs should have been factored in as part and parcel of the salary bill. Why should we consider the pension costs as something extra? They are not. They are part of the overall remuneration package - what I would call a part of the salary that is not actually paid out to the employees.

marklv

Kohoutek wrote: »

That's probably not going to happen though, is it? Asking for more money for public sector pensions after Brown took £5 billion every year from private pensions is borderline politically impossible. Expect a 'renegotiation' over the next few years.

Well, the schemes have already been made less generous as the old ones with a retirement age of 60 closed to new members. I'm sure the trend will continue and even the current schemes will soon close and be replaced by less generous ones.

JasonLVC

Spartacus_Mills wrote: »

My post was a reply to that, not to pick a fight, but because I was genuinely interested to know the reply. From your post you appear to be rather knowledgeable on this issue.

It wasn't meant to sound like a go at you, as I realised you were asking a straight question, but if it came across wrong, then my apologies.

I work within the realm of international taxation (hence my UK/Swiss location), mainly corporate. None of this "off-shore", tax dodging stuff I hasten to add, mostly compliance and law to ensure businesses are compliant in whatever jurisdictions they operate in.

dopester

marklv wrote: »

OK, so what's your point? If the schemes are unfunded, as you claim, then the government had better fund them! This is the fault of the government, not the poor !!!!!!s who work in the civil service etc. If the schemes have to be funded through tax revenue, so be it.

A bit of a turnaround from your previous intransigent posts with CMLO that most of the public sector pension money was mostly in some big fund and all hunky-dory.

So CMLO doesn't have mental illness issues after all, because you were entirely wrong about this point. Cancel the appointment with Harry's doctor yet again. It's more the person making the diagnosis who needs the appointment.

marklv wrote: »

THAT IS WHAT I HAVE BEEN SAYING! It is not invested in stock and shares, but that does not mean that it is 'unfunded'. As long as the contributions are of a certain level, the funds will be there - guaranteed by the actuaries! What the hell do you mean by 'funded' anyway? The money is put into bonds and other secure instruments decided by the actuaries to provide a FIXED INTEREST return that will meet the pension obligations. Investing in stocks and shares would be risky and not be acceptable to the actuaries. I am fully aware that defined benefit schemes run by private sector companies have invested in shares etc, but the result of this has been all too obvious: most of them have closed down because the shares did not perform as anticipated, leaving huge liabilities in pension funds. Most of the final salary schemes in the private sector are in this predicament.

PrivatisetheNHSnow

who needs the public sector? ronald reagan fired all those air traffic controllers when they went on strike - did the airports stop working? No, they just replaced them.

No-one needs the public sector, sack all 6 million of them.