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

Andy_L

ds9074 wrote: »

If I understand the 'career average' correctly then someone who stays at the same or similar grade of job over their career will not be much worse off than under final salary.

It depends on what accrual rate they use - which is a political decison not part of Hutton's remit. If they stick with the 1/60ths rate currently used you will be worse off (just by not as much as someone who does have career progression).

When the civil service moved to carer average to keep the value of pensions the same (as savings were made by increasing retirement age and a few other tweaks) they moved from a 1/60ths (~1.67%) accrual to 2.3% accrual

Andy_L

BoxerfanUK wrote: »

Yes Andy there are all in the PCSPS but as you know there are different versions, Classic (with reserved rights) Classic (without), Classic plus, Premium, Nuvos, Partnership, all of which are dependant on when you joined and with different benefit/contribution rates, so leaving and re-employing in a different grade or job means that the scheme you are currently in won't be the one offered in a different Civil service post.

When I looked into rejoining a few years ago, providing you didn't take a redundancy package (or choose to pay it back), you can rejoin the one you were in when you left.

BoxerfanUK

borders wrote: »

Doesnt matter if it's private or public sector. I'm firmly against changes to pensions for existing employees. It's part of the terms and conditions of your job when you started. It's a contract between you and your employer and it should be honoured. Lots of private companies shafted their staff by changing the terms of their final salary pensions. It wasnt right then and it isnt right now.

Here here :T and two wrongs don't make a right. Workers pensions should be honoured, thats what they understood when they took the job. If the gov't want to change it, then change it for NEW STAFF, who are then aware of the terms on offer at the time they take the job. Public sector pensions have already been reviewed and amended a few years ago under labour and we were all told the changes were to make public schemes affordable and sustainable. Now, just a few years later, we are being told again that they are not!!!!

ds9074

borders wrote: »

Thats my rant over. Except to remind you that there are plenty of low paid public sector workers who cant afford to retire early and who are the ones who are going to get royally screwed by this. It's not all police, teachers, etc.

Would seem to me that it is quite the opposite. That lower paid public sector workers will not notice much difference, it will be the high flyers that are hit. This is particularly true if, as I have seen suggested elsewhere, the lower paid are protected from the increase in contribution rates.

If anything this is a good thing for low paid public sector workers if it puts their pensions on a sustainable footing, rather than the schemes being undermined by big payouts to a few at the top.

BoxerfanUK

Andy_L wrote: »

When I looked into rejoining a few years ago, providing you didn't take a redundancy package (or choose to pay it back), you can rejoin the one you were in when you left.

I don't know Andy there may be a way that some people can do this, but I don't think I would keep my Classic reserved rights if I left and rejoined.

BoxerfanUK

Andy_L wrote: »

It depends on what accrual rate they use - which is a political decison not part of Hutton's remit. If they stick with the 1/60ths rate currently used you will be worse off (just by not as much as someone who does have career progression).

When the civil service moved to carer average to keep the value of pensions the same (as savings were made by increasing retirement age and a few other tweaks) they moved from a 1/60ths (~1.67%) accrual to 2.3% accrual

Yep the 2.3% accrual in Nuvos is much better than 1/80 or even 1/60 in most final salary pensions.

ds9074

Andy_L wrote: »

It depends on what accrual rate they use - which is a political decison not part of Hutton's remit. If they stick with the 1/60ths rate currently used you will be worse off (just by not as much as someone who does have career progression).

When the civil service moved to carer average to keep the value of pensions the same (as savings were made by increasing retirement age and a few other tweaks) they moved from a 1/60ths (~1.67%) accrual to 2.3% accrual

The devil will be in the detail, although I think the report does talk about making the pensions sufficient (alongside the state pension) to provide a reasonable retirement income (I think as definied by Lord Turner in his 2005 pension review).

I am guessing the government politically will not want to set the pension so low that Hutton, who they have talked up as independent, comes out against them. That would be damaging.

Dorastar

Don't really think I want to be teaching at 65 or 68 (!) and also a bit naffed off that career progression that I have worked very hard for will get a double whammy from CB cuts (I earn over the magic number) + a proposed bigger loss from a move to career average salary.

I would now advise any new teachers to strive to be 'satisfactory' in the future in case they should accidentally get promoted, take on more responsibility, work more hours and get stuffed financially as a reward.

Lets all just be average from now on and die in-service then they wont need to give us a pension at all (that might have been their real plan )

Yes we are all in it together, unless we are stonkingly rich, but it still stinks

ds9074

Dorastar wrote: »

Don't really think I want to be teaching at 65 or 68 (!) and also a bit naffed off that career progression that I have worked very hard for will get a double whammy from CB cuts (I earn over the magic number) + a proposed bigger loss from a move to career average salary.

I would now advise any new teachers to strive to be 'satisfactory' in the future in case they should accidentally get promoted, take on more responsibility, work more hours and get stuffed financially as a reward.

Lets all just be average from now on and die in-service then they wont need to give us a pension at all (that might have been their real plan )

Yes we are all in it together, unless we are stonkingly rich, but it still stinks

Presumably that career progression comes with increased pay now and of course even under a career average scheme it would still increase your final pension - just not necessarily by so much.

ds9074

BoxerfanUK wrote: »

Here here :T and two wrongs don't make a right. Workers pensions should be honoured, thats what they understood when they took the job. If the gov't want to change it, then change it for NEW STAFF, who are then aware of the terms on offer at the time they take the job. Public sector pensions have already been reviewed and amended a few years ago under labour and we were all told the changes were to make public schemes affordable and sustainable. Now, just a few years later, we are being told again that they are not!!!!

I disagree. I think an employer should be able to change terms and conditions if circumstances change. The employee can always resign their post or in this case opt out of the pension scheme if they do not like the new terms.

Also by having one scheme for new workers and one for existing workers you can end up with two people being 'paid' (ie getting a different level of benefit) for doing the same job at the same pay band.