Public sector pensions - cpi instead of rpi

real1314

roysterer wrote: »

PUBLIC SECTOR GRAVY TRAIN
R.I.P.

It won't be long now, you will soon be entering the real world like the private sector already has!!!!!!
The taxpayer can no longer support the Public Sector Final Salary Pension Scheme with early retirement at 55. This is nonsense. Only a small number of public sector employees get this option - typically those in jobs like the Police and Fire Brigade (although don't quote me on those I may be wrong) it does not apply to council workers or civil servants.
Many people have complained to there MPs stating their concerns about the Public Sector waste of money. You will find that there is very little support for Public Sector Workers (with the exception of Nurses). Yea if you reakon you can earn higher salaries in the Private Sector you will soon have your chance!!!!!!!! I think you are in for a shock.
You certainly are not going to get a Final Salary Scheme pension with a 6% contribution.(you wont get a FS Pension with a 15% contribution).
Also you will not get your yearly grade rise once a year for long service. This certanly does not happen in the civil service.
Not forgetting the 60 days a year sick pay through stress. Nice attempt at a gross exaggeration - shows you for what you are. The highest sick absence rate for any large employer is in a private sector compamy.
Theres a big tough world out there and its not particularly very nice. You would be shocked if you knew how badly many employees are treated in the private sector. I have friend with a small/medium sized business - i know how his employees are treated and it's generally far better than anyone I know in the public sector.

You should at least stick to reality if you are going to attempt too criticise something.
I might as well point out that a bank, amongst other private sector companies has used corporate hospitality at wimbledon, and at many other hgh profile sporting events costing hundreds of thousands; The public sector might get a paid lunch for £4-£5.

Private sector bonuses can be 40-50% of salary; Public sector might be 1%.

Some private sector pension schemes pay 66% of final salary; public sector is only 50% after 40 years of work.

Old_Slaphead

real1314 wrote: »

Some private sector pension schemes pay 66% of final salary; public sector is only 50% after 40 years of work.

Private sector schemes are all but extinct - less than 10% of firms now offer them and virtually none are available for new recruits (I think it's 2 or 3 of the top 100 UK companies)

Some public sector schemes offer better schemes that you quote (ie police, fireservice to name but 2). Also many public schemes offer pensions from age 60 (which gives an extra 5 years of pension) and 3x annual pension as a tax free lump sum (which effectively increases your 50% to around 60% based on longevity of around 20 years).
I think you undersell the benefits of public schemes which is why unions & staff will fight tooth & nail to keep them!

Old_Slaphead

afc80 wrote: »

there seems to be a myth going on here that public sector employees are receiving higher wages than private sector employees. I cant speak for where you live but in Aberdeen wages in the private sector far outpace public sector wages. A receptionist in an oil company can be on £26,00 pa, a middle manager at Aberdeen City Council would be on that wage. I also know of a purchase ledger clerk in Aberdeen who is on £42,000 pa.

As for pensions, public servants are on very low wages, get very little thanks for the job they do and get no perks. My friend has been to the British open 4 times, the Belgian Grand Prix in the pit lane and to numerous Scotland games, all freebies, he also receives a 10% bonus in june and december, that is 10% of his annual salary. Aberdeen may be unique, i dont know? but a public sector job in this part of the world is hardly a gravy train.

Wow - £42k for a PL clerk - but it is the oil industry. Presumably there aren't many PL clerks in Aberdeen.

A quick check around the recruiting agencies reveals £16-18k to be the going rate.

I don't think your example is representitive.

I could give an example of one public servant getting up to £6million spent on his security but again, that's not the 'norm' is it ?

afc80

Agency staff in Aberdeen are very poorly paid, my brother started working at his current job , firstly as an agency worker. He was earning £17k a year.

He got offered a full time job with another company at £24k a year. He advised the company he worked for of this and that afternoon they offered him a full time job at £28k a year, he now earns over £45k.

the purchase ledger clerk on £42k is a one off, the purchase ledger people at my brothers are on £22k, but they do get 2 10% bonuses per year which boosts their salaries to nearly £27k.

On pensions, I agree, the final salary Local Authority pension is fantastic and the employers/tax payer are putting large sums of money into the pot, £4500 a year in my case, in essence this sum is part of your salary.

If this coalition try to muck about with peoples pensions their will be strikes, In Scotland the scheme was just changed last year, there will be real anger if they change it again.

darich

The problem is that many people think that public sector employees get a great deal with a final salary pension. I'm not denying it's good.....but we pay for it in many ways.
Firstly, in my job (structural civil engineering) the typical wage is no more than £34k. The bridges engineer earns just over £40k. He's responsible for a budget (before economic downtrun) of around £1m.
On the first site I found structural engineer vacancies the wages are £36-43k. Another was advertising £35 per hour....that's waaaaay more than I earn.
Here's another advertising £32-51k http://www.ukengineeringrecruitment.net/jobfull.php?a=16301

Secondly, as part of my normal every day duties, I'm the Quality Assurance Rep. That means I'm responsibile for ensuring we do our work to the correct standard and I deal with the external auditor who audits us twice a year. Like I said - it's part of my job that I need to do on top of looking after all the bridges we have. But in the private sector I could earn £16-18k doing Quality Assurance as my job http://www.careerjet.co.uk/job/5d4be3013207ea76474a4e09a594814a.html

Effectively my local authority gets two jobs out of me.....yet i receive only one salary with no bonuses or perks.

Now, if many posters had their way, all final salary schemes would be abolished. Well if that's what's to happen, the public sector wages would have to increase massively to compensate.
If the public sector is such a massive inefficient mass of beaurocracy, how come staff like me (I'm far from unique) get one salary but do two jobs? Does anyone in the private sector do that?
Surely doing a £16k QA job on top of my own is worth a pension contribution a quarter of that salary?

It's always the same posters who argue that fs pensions are unsustainable without knowing the whole story - it's cheaper for the council to make contributions to my fs pension than to employ a new member of staff on 16k to do QA.

patchwork_cat

Old_Slaphead wrote: »

Private sector schemes are all but extinct - less than 10% of firms now offer them and virtually none are available for new recruits (I think it's 2 or 3 of the top 100 UK companies)

Some public sector schemes offer better schemes that you quote (ie police, fireservice to name but 2). Also many public schemes offer pensions from age 60 (which gives an extra 5 years of pension) and 3x annual pension as a tax free lump sum (which effectively increases your 50% to around 60% based on longevity of around 20 years).
I think you undersell the benefits of public schemes which is why unions & staff will fight tooth & nail to keep them!

I think you will find that your public sector pensions info is out of date. Certainly my DH will not receive a lump sum, that was discontinued about 4 years ago. ( I do note your many, but it is already ending and has for many!)

2 people have quoted 4 examples of public sector employees on less than private sector, how many do you want? I suspect a lot more as I doubt we will change your entrenched, brainwashed attitude.

Yes the public sector does not some reform certainly in local govt. There are some weird and wonderful initiatives often attracting funding outside the norm. My DH has been waiting for a review of pay for nearly 5 years, doubt that will happen positively now!

The one thing that does bother me is the round of enhanced pensions that did happen about 10 years ago that have taken money out of the pension pot - which in fact Local govt do have, unlike the police.

Old_Slaphead

patchwork_cat wrote: »

I think you will find that your public sector pensions info is out of date. Certainly my DH will not receive a lump sum, that was discontinued about 4 years ago. ( I do note your many, but it is already ending and has for many!)

2 people have quoted 4 examples of public sector employees on less than private sector, how many do you want? I suspect a lot more as I doubt we will change your entrenched, brainwashed attitude.

Re. public sector info - there are many different schemes and I'm not sure which you use for illustration.
If it's the Local Authority one - accruals were 1/80th + 3x pension as a tax free lump sum up to 2007 (with retirement at 60). From 2007 it was 1/60th accruals with retirement at 65. Anyone employed before 2007 will have 2 seperate contribution 'pots'.
Either way, if you are using the LA scheme as your example, you are underdeclaring the benefits.

Anyone can 'cherry pick' examples that's why I asked for 'across the board' examples. Across the public/private sector, lots of jobs are not directly comparable and you can use examples to fit your argument. Often the T&Cs, working conditions etc are completely different.....t's not all down to headline salary. My partner works for LG and she readily admits that she couldn't earn a similar figure in the private sector in her local area (ok maybe more in a big city but that would involve other costs).....adding in other benefits, flexitime, holidays, pension, sick pay, car allowance, paid overtime - she recognises that the overall package isn't really that bad!! My sister, the most scatterbrain person you could come across - tried for years without to get a job in private sector - ended up in NHS admin......quite handy really as she spends most of her time off sick

Old_Slaphead

darich wrote: »

Effectively my local authority gets two jobs out of me.....yet i receive only one salary with no bonuses or perks.

Do you do 2 full time jobs ie 80 hour a week but only get paid paid for 40 ?

Another point of interest - over the last couple of years my company has been losing workers to the Local Authority/NHS as we've not been able to compete on overall salary package.

artha

If it's the Local Authority one - accruals were 1/80th + 3x pension as a tax free lump sum up to 2007 (with retirement at 60). From 2007 it was 1/60th accruals with retirement at 65. Anyone employed before 2007 will have 2 seperate contribution 'pots'.

Sorry to digress slightly but I could do with some clarification on this for OH situation. OH has been teaching in FE for many years but only joined the TPS in 2004. Does what you say mean that OH effectively has two pension schemes? i.e. one available at 60 and the other available at 65.
We don't recall getting any communication that the changes in 2007 would have an affect on those already in the pre-2007 TPscheme. Or is the TPS not affected in the way the LA one?

cvd

Some public sector schemes allow members to make Additional Voluntary Contributions. My understanding is that these involved no contribution from the employer and were priced by the actuary to be cost neutral to the fund. The benefits were advertised to go up with RPI. It will now be CPI. Can anyone explain the justification for this retrospective rewriting of an investment contract?

If it is acceptable, then presumably it is OK for the government to decide to uprate index-linked savings certificates by CPI rather than RPI for those who have already bought them.

I know of one private sector pension scheme which uprates benefits according to RPI as determined by the act which the government is proposing to change. They are currently consulting lawyers as they do now know what uprating to use in future.

One further point: the CPI is calculated by using a geometric mean; the RPI is calculated by using an arithmetic mean. If the CPI measured the same quantities as at present but was calculated by using an arithmetic mean then it would be about 0.5% higher per year. There is a reason for using the geometric mean - but anyone who understands the reason will also know that it is a very inappropriate measure of inflation for people who are poor.

One should always start from the premise that politicians are incredibly stupid and innumerate - and Osborne has already shown that.