public sector pension worries

LittleMissAspie

Old_Slaphead wrote: »

With a life expectancy of 25 year

Age 90? I think 75-80 is more realistic.

Old_Slaphead

LittleMissAspie wrote: »

Age 90? I think 75-80 is more realistic.

The vast majority of public sector workers currently "in the system" have retirement at 60, some 55, some 50.

Life expectancy for a healthy 60 year old is M 22yrs F 24 yrs.

It'll probably increase a little in future so 25yrs drawing a pension, as used in my comments, doesn't seem to be a wild exaggeration

Primrose

You say you have estimated that to date you've paid about £68,000 into your pension scheme. At current annuity rates, i.e. the rate which people in the private sector have to buy pensions from their money purchase schemes, I think this would buy you at age 60, an annual pension of approximately of £6000 on your own life only, with no annual increases.

Old_Slaphead

Primrose wrote: »

You say you have estimated that to date you've paid about £68,000 into your pension scheme. At current annuity rates, i.e. the rate which people in the private sector have to buy pensions from their money purchase schemes, I think this would buy you at age 60, an annual pension of approximately of £6000 on your own life only, with no annual increases.

If it were comparable to public sector schemes ie inflation linked, 50% widows pension than I guess £68000 would give a pension of around £2500pa.

mikeb222, I suspect, will be expecting at least 5x that figure.

markr007

I believe that lies and deceit are being used to scaremonger the public so that radical cuts can be made to every pension scheme (apart from the MP's own pension of course)

A lot of the time this is about lack of understanding rather than lies and deceit.

I have paid 11% into my scheme for 20 years and I am jolly well entitled to a decent pension.

This is part of the misunderstanding. 11% of salary for 20 years "jolly well entitles" you to a pension worth 11% of 20 years salary. Just because you've paid some contributions doesn't mean you should have a generous pension. You are entitled to the pension set out in your contract as the salary + pension represents your overall compensation. If the pension has increased in cost and value then there is nothing wrong with changing the terms going forward such that either your pension or salary is lower to reflect it. Your overall compensation package can still have gone up and be at the right level for the job you are doing.

I simply don't understand why the tax payer thinks I do a decent enough job to give me a wage but not a pension. Something is very wrong with our society!

The tax payer doesn't really. The tax payer just thinks that the 2 together is much too generous because the pension element has gone up drastically in cost.

It's also not my fault that the banks were bailed out by the taxpayer for £850 billion just because they gambled their-sorry-our money away.

It's not mine either. Are you suggesting that if this hadn't happened the tax payer would be happy to provide large pensions because there was enough tax income to do it?

Similar to a PONZI scheme really.

This is very unhelpful language. Unfunded pensions are not ponzi schemes.

my point is that the whole article is meaningless as it just posts a random selection of odd 'facts'

Very typical of anything pensions related - not just public sector ones.

Andy_L

markr007 wrote: »

This is part of the misunderstanding. 11% of salary for 20 years "jolly well entitles" you to a pension worth 11% of 20 years salary.

Just because you've paid some contributions doesn't mean you should have a generous pension.

You are entitled to the pension set out in your contract as the salary + pension represents your overall compensation.

A bit contradictory? 11% contributions for 20 years entitles you to "the pension set out in your contract" not a pension "worth 11% of 20 years salary", which may or may not be generous depending on those contractual terms (now public sector pensions are generous, 20 odd years ago they were fairly run-of-the-mill compared to large private sector schemes)

markr007 wrote: »

If the pension has increased in cost and value then there is nothing wrong with changing the terms going forward such that either your pension or salary is lower to reflect it

Couldn't agree more however:
1. the change to CPI is (arguably) a change to accrued rights rather than "terms going forward"
2. Its very tricky to value a FS pension as its very sensitive to the assumptions you make about longevity, investment returns, carear progression etc

TREVORCOLMAN

Perhaps papers like the Daily Mail should give us figures for paying pensions to the work shy who have contributed nothing.

markr007

A bit contradictory? 11% contributions for 20 years entitles you to "the pension set out in your contract" not a pension "worth 11% of 20 years salary", which may or may not be generous depending on those contractual terms (now public sector pensions are generous, 20 odd years ago they were fairly run-of-the-mill compared to large private sector schemes)

I see what you are saying. The point I was making is that the fact he paid 11% is irrelevant. If contributions were what drive entitlement then that would be all he was entitled to. It's actually driven by his contract and what he pays is utterly irrelevant.

exil

The change to CPI is without doubt a change to accrued rights, in respect of service already built up. However public sector pension scheme members are not the only ones affected by this change - it also applies to SERPS/S2P so probably affects 90% of the working population.

markr007

The change to CPI is without doubt a change to accrued rights, in respect of service already built up. However public sector pension scheme members are not the only ones affected by this change - it also applies to SERPS/S2P so probably affects 90% of the working population.

It also applies to the private sector although exactly how is still to be clarified.