MSE News: Public sector pension benefits should be cut – report

markeymark

DuffMeister wrote: »

Markeymark, you seem to have forgotten that most criminals nowadays are in for very short periods of time and if Ken Clarke has hs way there will be fewer in and those who do receive a custodial sentences will be there for a matter of weeks. We deal with the same people time and again and no sooner do we lock them up than they are out again committing the same old crimes.

They are granted days out in the community, serve half of the sentence given and get released even earlier if they are out on tag; which a considerable number of them breach.

Only this week my colleagues located a suspect wanted on warrant for previous offences, placed that suspect before the court who immediately bailed them. They then went to the local Boots store and shoplifted a load of goods. Had that person been locked up by the court, that offence would not have occurred. If the public knew the half of what went on, they would be up in arms.

If this government really wants to save some money, I suggest they lock them up for longer. If they are inside, they can't commit crime. Moreover, for those of them that can afford it, why don't we charge them the real cost of the prosecution? I'm sick of hearing prosecutors asking for costs of £45 at court when we all know the real cost is anything from hundreds of pounds to tens of thousands!

I can only speak for Scotland, i work in a long term prison so havent dealt with short term prisoners, but i can say that there are no shortage of long term prisoners, re-offending rate is around 60-80%, prisons do not work, no matter what courses you make them do, prisons are a necessary evil,will never be a vote winner

the dregs of society won't change, why should they? in prison they get everything for free

maybe government should look at tackling addiction a different way, my suggestion de-criminalising of drugs, but controling the way they are issued, this would take away the criminality of them,therefore petty crime should eventually fall

markeymark

DuffMeister wrote: »

If this government really wants to save some money, I suggest they lock them up for longer. If they are inside, they can't commit crime. Moreover, for those of them that can afford it, why don't we charge them the real cost of the prosecution? I'm sick of hearing prosecutors asking for costs of £45 at court when we all know the real cost is anything from hundreds of pounds to tens of thousands!

and are you that nieve to think they can't commit crime whilst in prison??

JamesU

Stargazer57 wrote: »

35% is only enough to play for police pensions in the fantasy world (perpetuated by the Labour governement when it was in office) where you can earn 3.5% interest, in excess of RPI inflation, on a government guaranteed investment. As the true rate is below 1%, the true value of police pensions is around 50% of salary of which the member pays 11%.

If the true value of the pension is around 50%, or around 40% when the employee contribution is taken off, how does this subsidy on a public sector pension compare with the 40% tax relief given to higher earners on their pension provision? Is this 40% tax relief any more affordable to the taxpayer right now? Perhaps there is justification for the Government to reduce this tax relief to a more affordable 20% for higher rate tax payers aswell?

JamesU

Andy_L

DuffMeister wrote: »

You are missing the point somewhat. I entered into a contract in which both sides agreed the terms.

You did, however that contract only extends into the future indefinatly for past service. The contract does not bind them to provide the same benefits for future service.

Stargazer57

JamesU wrote: »

If the true value of the pension is around 50%, or around 40% when the employee contribution is taken off, how does this subsidy on a public sector pension compare with the 40% tax relief given to higher earners on their pension provision? Is this 40% tax relief any more affordable to the taxpayer right now? Perhaps there is justification for the Government to reduce this tax relief to a more affordable 20% for higher rate tax payers aswell?

JamesU

This 'comparison' suggests that only private sector employees pay higher rate tax. i can think of plenty who get a public sector pension, with the hidden subsidy, and higher rate tax relief.
In any case the cost often ascribed to higher rate tax relief is overstated. If someone pays higher rate tax in employment and in retirement the 'cost' is a deferral except for the lump sum. And even those, who are more numerous, who will only pay basic rate tax in retirement could be put in the same position as they are today merely by reducing their pay whilst they are working and then being promised a pension at retirement.

JamesU

Andy_L wrote: »

You did, however that contract only extends into the future indefinatly for past service. The contract does not bind them to provide the same benefits for future service.

There seems to be a bit of an anomaly here though. CETV values for divorce settlements based on RPI values were suspended last year and started again when lower transfer values according to CPI were available. And yet on another thread, it seems that AVCs purchased right now will be indexed by RPI whereas in the new FY they will be indexed by CPI. Both are changing in relation to the uprating order to CPI, but the CETV change has been introduced earlier and retrospectively whereas the change to AVCs has not. Any idea why there is such a contradition, or am I overlooking something obvious here?

JamesU

Old_Slaphead

JamesU wrote: »

If the true value of the pension is around 50%, or around 40% when the employee contribution is taken off, how does this subsidy on a public sector pension compare with the 40% tax relief given to higher earners on their pension provision? Is this 40% tax relief any more affordable to the taxpayer right now? Perhaps there is justification for the Government to reduce this tax relief to a more affordable 20% for higher rate tax payers aswell?

JamesU

The 40% public sector cost is 40% of the employee's salary (or approx 80% of the actual pension cost).

The 40% HR tax relief is 40% of the individual's pension contribution. Tax relief is only a tax deferral as it will be returned when the pension is paid out.

Public sector staff are also entitled to the 20/40% tax relief in addition to the circa 80% taxpayer funding.

I do agree that pension tax relief should be restricted to the standard rate.

JamesU

Old_Slaphead wrote: »

I do agree that pension tax relief should be restricted to the standard rate.

No idea how much the annual Government budget for 40% tax relief on pensions is relative to the budget for 20% tax relief. But guess best to keep quiet about this favourable additional relief for high earners that taxpayers may not be able to afford right now, just in case anybody is reading this and looking for ideas with the budget looming.

JamesU

Andy_L

JamesU wrote: »

There seems to be a bit of an anomaly here though. CETV values for divorce settlements based on RPI values were suspended last year and started again when lower transfer values according to CPI were available. And yet on another thread, it seems that AVCs purchased right now will be indexed by RPI whereas in the new FY they will be indexed by CPI. Both are changing in relation to the uprating order to CPI, but the CETV change has been introduced earlier and retrospectively whereas the change to AVCs has not. Any idea why there is such a contradition, or am I overlooking something obvious here?

JamesU

The pension contract (ie the scheme rules) don't actually say RPI indexation they say words to the effect off "a rate determined by the Secretary of State". A separate piece of legislation then specifies that rate. It was this secondary piece of legislation that was changed from RPI to CPI and thus allows back dated changes without a change to the scheme rules (which generally say changes to accrued rights require members consent).

AIUI the current legal challanges being prepared by the TUs hinge on this being a change to accrued rights (and thus illegal under other bits of pension legislation) and that all the other scheme documentation says RPI & leading to the reasonable belief that it was a scheme rule.

If the change does stand it sets up the "interesting" situation where the employee can have no faith in the indexation of the pension scheme & so should discount the value of indexation based on the likelyhood of further reduction in the rate used (eg going to 75% of CPI)

Old_Slaphead

JamesU wrote: »

No idea how much the annual Government budget for 40% tax relief on pensions is relative to the budget for 20% tax relief. But guess best to keep quiet about this favourable additional relief for high earners that taxpayers may not be able to afford right now, just in case anybody is reading this and looking for ideas with the budget looming.
JamesU

Restriction of HR tax relief on pensions has been mooted many times.

Rather than restrict it Gordon Brown expanded it up to £250k pa (Tories have brought it down to £50k pa)