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

bigheadxx

marklv wrote: »

Money purchase, more properly called 'defined contribution' schemes, will almost certainly be brought in for all new joiners to public sector jobs. I don't personally agree with this move, but it's a 99% certainty that this will happen regardless of who wins the general election. However, moving existing contributors by ending their existing pension arrangements would be hugely controversial, and I doubt that even Cameron would do this. What is more likely is that the employee contribution rates on pensionable salary will increase.

.

http://www.ft.com/cms/s/0/7accaee4-40db-11df-94c2-00144feabdc0.html?ftcamp=rss
The present system is “unsustainable”, with a total liability to pay out public service pensions that already stands at more than £1,000bn – up from £915bn in 2008 – the CBI said . The current methodology used by government to calculate future pension costs is opaque, it said, difficult to understand and inconsistent with that used by private sector employers.
The employers’ body renewed its call for the creation of an independent public sector pensions commission to design the scheme.
While saying that it does not wish to pre-empt any decision to be made by that independent commission, the CBI urged that public sector workers be switched to a retirement arrangement known as “notional defined contribution”, in which contributions are put into a fund which is not invested in stocks or bonds, unlike most defined contribution plans.
Instead, contributions placed in a fund would be used to pay benefits for current pensioners. When today’s workers retire, they would receive a lump sum which is a percentage of pay for each year worked and uprated annually in line with economic indicators, such as national average earnings or inflation. Moreover, the CBI is urging that retirement ages for public sector workers, which still stand at 60 for many staff, be raised to match the increases planned in state pension age.
The CBI says that its proposed scheme is likely to be much less generous than the existing final salary or career average pensions used in the civil service, local government and other parts of the public sector.
David Cameron, the Conservative party leader, has said he would like to switch public sector workers to defined contribution pensions, although he has not made a commitment to do so. The Conservatives echoed support on Monday for the CBI proposals, but stopped short of urging a switch to a defined contribution system for the public sector.
“We agree with the CBI that an important first step in public sector pension reform is transparency, so taxpayers understand the true costs and public sector workers understand just what the value of their retirement benefits is,” said Philip Hammond, shadow chief secretary to the Treasury.

I like the idea of "Notional Defined Benefit" as a first step to reforming public sector pensions. It means that the pension received will be based on actual contributions/ salary and is therefore sustainable. Public sector workers will be aware of the true value of their individual pension rather than the current situation where it is seen as an absolute right to receive more than the rest of us.

I have no doubt that something along these lines will be introduced in the next parliament as the current situation is unsustainable.

PrivatisetheNHSnow

ninky wrote: »

would you count the armed forces in this? now as something like the 4th biggest spender on defence in the world that is certainly one area the uk could massively cut back on. but strangely the republican minded don't seem to care about taxpayers spending out on anything military related.

we don't need to be in the middle east.

the worse offender is the NHS. 1.6 million employees:

125,000 doctors
250,000 nurses
200,000 cleaners, porters etc

what do all the others do??? managers, admin staff - how on earth are there that many? you could probably cut 200,000 jobs from the NHS bureaucrats and no-one would notice.

ninky_2

PrivatisetheNHSnow wrote: »

we don't need to be in the middle east.

the worse offender is the NHS. 1.6 million employees:

125,000 doctors
250,000 nurses
200,000 cleaners, porters etc

what do all the others do??? managers, admin staff - how on earth are there that many? you could probably cut 200,000 jobs from the NHS bureaucrats and no-one would notice.

okay so maybe you can't trust americans with statistics but according to this 30 percent of the nhs workforce is made up of nurses. so doesn't tally with your figure. some other interesting facts here too...like 77 percent of the nhs workforce is female.

Nurses make up nearly 30% of the NHS workforce: This represents the largest portion of the National Health Service workforce. Nurses are quite important to the NHS.

http://mastersinhealthadministration.org/2010/25-little-known-facts-about-the-national-health-service-nhs-in-britian/

bigheadxx

ninky wrote: »

would you count the armed forces in this? now as something like the 4th biggest spender on defence in the world that is certainly one area the uk could massively cut back on. but strangely the republican minded don't seem to care about taxpayers spending out on anything military related.

Defence exports are very important to the UK economy. Cutting back our own defence budget would damage UK firms with an interest in defence and reduce money spent on R & D. The long term effect of this would be UK defence firms falling behind and losing their competitive edge. Therefore their products would be less attractive than their competitors leading to reduced demand from overseas and ultimately less export earnings.

chewmylegoff

marklv wrote: »

You're just playing with numbers and terminology. None of this matters. The govenrment isn't a company that can go broke - the money can always be raised through taxation, and besides, the pension requirements shoud have been factored in to start with. It's just playing with figures in the way that accountants like to do. Meaningless.

if you think a country cannot go bust, they you have fewer brain cells than me, and as you have pointed out i only have one.

money cannot always be raised from taxation. taxation is a finite source of funds for the government, not an unlimited pot it can increase at will. it has very little scope to increase too much further, we're already running at a tax burden well above 40% of GDP.

i am not "playing with numbers". you said it wouldn't matter if the civil service schemes had been funded, because they would all be in deficit like the private sector schemes were. that would only be true if 100% of the money invested was lost.

having a deficit means the liabilities outweigh the assets. if, for instance, the schemes were 50% funded (i.e. having a 50% deficit of assets to liabilities), it would be better (i.e. less costly in the future) than the schemes being 0% funded.

you must be able to see that having a 50% deficit (£500 billion liability) would be better than having a 100% deficit (£1 trillion liability).

the government should have factored pension requirements in to start off with, but they didn't. it's a bit late to change that now, and you can't just dismiss the problem by saying that they should have!

any quite why you think a country cannot go bust is beyond me.

chewmylegoff

marklv wrote: »

Money purchase, more properly called 'defined contribution' schemes, will almost certainly be brought in for all new joiners to public sector jobs. I don't personally agree with this move, but it's a 99% certainty that this will happen regardless of who wins the general election. However, moving existing contributors by ending their existing pension arrangements would be hugely controversial, and I doubt that even Cameron would do this. What is more likely is that the employee contribution rates on pensionable salary will increase.

you accuse me of playing with numbers, and then you want to have a lesson in semantics over the name of a pension scheme? nice.

in my view the first thing that will happen is that all new joiners will be on money purchase. the next thing that will happen, a few years down the line, is that the existing defined benefit schemes will be closed and people will cease to accrue benefit going forward. the two steps won't be taken together as it would be too politically sensitive.

What do you mean by 'free money' to those who don't work? When you lose your job you are entitled to JSA for up to 6 months on the basis of your own NI contributions - it certainly isn't free money as you claim. It could be argued that means tested social benefits are 'free', but would you rather see thousands of people begging on the streets? Do you want to bring us back to the Victorian age? Some kind of Dickensian slum society? If you do you are an even bigger idiot than I take you for - and that's already pretty big, pal.

just realism. if we continue to pay out more in benefits than we raise in income tax, then there is very little we can do to close the budget deficit, pay off our debts, and finance the govt's off balance sheet liabilities (chiefly pension liabilities). i suppose the other option is to privatise the health service. which would you prefer?

you don't seem to understand the size of the govt's liabilities, and think that we can just raise more money from taxes and never go bust. the trouble is that tax revenue is finite, whilst the govt is seemingly able to make unlimited promises to pay money to people. sorry if you don't understand this. if it makes you feel better to call me an idiot go ahead, at least i have the one brain cell i need to be able to see the bigger picture outside the tiny world of my own civil service pay grade.

Andy_L

ninky wrote: »

okay so maybe you can't trust americans with statistics but according to this 30 percent of the nhs workforce is made up of nurses. so doesn't tally with your figure. some other interesting facts here too...like 77 percent of the nhs workforce is female.

Nurses make up nearly 30% of the NHS workforce: This represents the largest portion of the National Health Service workforce. Nurses are quite important to the NHS.

http://mastersinhealthadministration.org/2010/25-little-known-facts-about-the-national-health-service-nhs-in-britian/

or the official stats, in 2009 (rounding errors mean they don't add up)

1.4mill staff

140k Doctors
417k Nurses
150k scientific, therapeutic & technical staff
18k Ambulance staff
377k Support to clinical staff
236k infrastructure support (which includes 45k Managers & senior managers)
92k GP practice staff

http://www.ic.nhs.uk/statistics-and-data-collections/workforce/nhs-staff-numbers/nhs-staff-1999--2009-overview

Andy_L

chewmylegoff wrote: »

in my view the first thing that will happen is that all new joiners will be on money purchase. the next thing that will happen, a few years down the line, is that the existing defined benefit schemes will be closed and people will cease to accrue benefit going forward. the two steps won't be taken together as it would be too politically sensitive.

Thats what should happen but won't because of the short term pain of moving from unfunded to funded (the same reason the state pension won't move to funded). I'd expect gradual salami slicing of the benefits (eg accrual rates, dependants benefits, carear average rather than final salary etc). and an increased use of the Civil Services scheme of paying payrises as non-pensionable "bonuses" rather than an actual payrise

bigheadxx

Andy_L wrote: »

Thats what should happen but won't because of the short term pain of moving from unfunded to funded (the same reason the state pension won't move to funded). I'd expect gradual salami slicing of the benefits (eg accrual rates, dependants benefits, carear average rather than final salary etc). and an increased use of the Civil Services scheme of paying payrises as non-pensionable "bonuses" rather than an actual payrise

This is why the Notional Defined Benefit, put forward by the CBI is the most likely first step. A straight switch to defined benefit means the government of the day would effectively have to pay twice for a long period of time which would increase tax and borrowing and therefore be unpopular.

Notional defined benefit means that each employee gets a lump sum on retirement to buy an annuity. The lump sum is based on your salary each year. It is far less generous than the current system and shows the employee the true value of their pension.

kabayiri

I wonder how many here have experienced the harsh side of this recession.

I know I have. I have had time out of work totalling perhaps a year, and the income I currently receive is a good 40% down on pre-recession levels.

I feel I would have just cause to do a 'marklv' ; post on here about how unfair it all is ; how I should demand that lost 40% from a bunch of bankers, etc.

But you know what? Life is not even and fair. I believe nobody has an automatic right to an income. You have to keep justifying why people should employ you and your skills.

The recession has been a reality check in some ways. I, like others, will adjust my lifestyle and move on.

This is why it feels all the more insulting to hear someone bleat on about how derisory a 1% increase in pay is.
(emphasised in marklv bold for good measure ).