Time to start a thread on public sector pensions

abaxas

ILW wrote: »

Where did you get that idea from?

Pensions and annuities and currently legal. That does not mean that in the future we will close the loophole that allows them.

As a democratic state, we (the tax paying populace) may decide to close the loophole hence stop payment.

Contracts live inside the law.

worldtraveller

About bloody time too! I just wish the Government would just get on with it and implement, at the very least, these recommendations, and not cave in to the unions in the way that Blair & Brown did in 2005. I'm pretty sure though that, if and when they are implemented, they won't go anything like far enough. It's ridiculous that the taxpayer continues to subsidise these current totally unsustainable and inequitable pensions and retirement ages.

lemonjelly

Lord Hutton was on bbc news this morning. He seemed to be saying that if the government adopt his proposals, it will take at least 4 years to impliment (ie by 2015).

The other thing he said was that his proposals aren't designed to be implimented retrospectively, therefore current public sector workers shouldn't be affected, but new recruits will.

I was very suprised when he said that!

Mr_Mumble

Think its outrageous how Hutton is treating private sector pensions (and by extension employees) like dirt by saying public sector workers will have a 'fairer' pension. No, private sector workers get a pension based on reality - on how much they and their employers put in (defined contribution) - during their working lives. You can argue all you want about how much the employer pays in and the fairness of that portion but to ascribe the fantasy-based ponzi scheme (aka defined benefit) as fairer is worthy of Lewis Carroll.

Some comments via the FT:

Mark Packham, pension director at PwC: “The private sector will welcome the direction of travel but may still balk at the costs of protecting benefits. Much of the savings will emerge from measures already outlined on CPI inflation matching and higher member contributions.

Ros Altmann, director-general of Saga: “Lord Hutton’s recommendations on public sector pensions have led to calls for industrial action by public sector unions, but the reality is that his proposals will still leave them with hugely generous pensions that most private sector workers could never hope to achieve.

“Lord Hutton has left most of the difficult decisions about pension funding to the government and has made broad headline recommendations with details to be filled in by the Treasury in negotiation with the unions.

“Under his broad proposals, public sector pensions will remain much more generous than those in the private sector.”

The additional burden on the general taxpayer from public sector pensions is currently running at a compound annual growth rate of 20% - that's the kind of trajectory that made Warren Buffett. The net additional cost to the general taxpayer for providing these pensions is rising from £3.1bn in 2010 to £10.3bn in 2015 - this is part of the stealth spending (along with debt interest, EU and overseas aid) that is making cuts in services a reality.

Hutton's point of view is understandable - he's a Labour politician - the problem is with Cameron for appointing him. The proposals in the report are a half-measure that will need to be re-fought in 5 to 10 years time as it becomes clear "career average" pensions are also unaffordable.

It's cowardice from the coalition when the public sector has no moral leg to stand on. The media were leading with the unions' response before the report was out - they know this'll be the largest fight since the miners strike and instead of the iron lady we've got hug-a-hoody Dave to fight on behalf of the taxpayer. Dave is already promising not to knock out the unions but make the bout go an extra round. The unions can smell the weakness and are looking to floor the Cleggerons with mass strikes.

N1AK

kabayiri wrote: »

Can I just ask.....what did we pay the Labour MPs to do for 13 years ?

Why has it taken until now for anybody to deal with the problem?

They avoided the question because electorate are a fickle bunch. Everyone knows that the pension system is in trouble, no one wants to be the one to lose out fixing it. Whichever party had the balls to fix the problem would get virtually no credit for doing what needs to be done; and all of the negativity from taking money from soldiers, police, nurses etc.

If you look at the sheer scale of critiscism of the current government for its proposed cuts you see the real problem. Everyone complained at the election, that no party would admit what they'd cut. The same people would NEVER have voted for a party that did. Why vote conservative if I'd be worse off under them? Maybe Labour (who won't admit what they'd cut) would leave me better off.

Personally, I've given up on the pension system. Pensioners and near pensionable age people are too strong a voting block to risk trying real reform. They just better hope they pop their clogs before the country defaults because I'll be fleeing the sinking ship with my taxable income when they come asking for more.

drc

It's one big pyramid scheme. It needs ever more people working at the bottom to pay for those at the top ad infinitum...

abaxas

drc wrote: »

It's one big pyramid scheme. It needs ever more people working at the bottom to pay for those at the top ad infinitum...

Which is illegal but made legal via other legislation.

There is nothing stopping us revoking it's legality.

vivatifosi

lemonjelly wrote: »

The other thing he said was that his proposals aren't designed to be implimented retrospectively, therefore current public sector workers shouldn't be affected, but new recruits will.

Sorry jelly, but is that definitely what he meant (didn't hear interview)? The reason I ask is because "not retrospective" can mean two things. It could mean that it will not apply to existing scheme members, however it could also mean - and I suspect this is likely - that the government will not tinker with the benefits that have already been accrued.

The_White_Horse

these public sector cretins should all have their pensions and pay slashed by 50%.

kabayiri

N1AK wrote: »

They avoided the question because electorate are a fickle bunch. Everyone knows that the pension system is in trouble, no one wants to be the one to lose out fixing it. Whichever party had the balls to fix the problem would get virtually no credit for doing what needs to be done; and all of the negativity from taking money from soldiers, police, nurses etc.

If you look at the sheer scale of critiscism of the current government for its proposed cuts you see the real problem. Everyone complained at the election, that no party would admit what they'd cut. The same people would NEVER have voted for a party that did. Why vote conservative if I'd be worse off under them? Maybe Labour (who won't admit what they'd cut) would leave me better off.
...

I suspect you are right.

We get populist government because we deserve populist government I guess.

I doubt anyone trusts a political party in what they say anyway.