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

borders

ds9074 wrote: »

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.

I admit I havent looked at it in detail. If the lower paid are protected then thats a fair point. If they honour the new pension and dont change it again in a few years. But who really believes there wont be changes again in the future? Breaking contracts doesnt seem to matter to some people.

I actually agree that career average pensions are fairer. But I still disagree with employers breaking employment contracts. Which is what changing pension terms amounts to.

borders

ds9074 wrote: »

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.

Why is it ok for the employer to change terms and conditions? The employee cant. A contract should be honoured by all parties. Thats the whole point of having them.

Opting out of the pension doesnt help the problem. The pension funds need more income, not less. A mass opting out would not help anyone.

Plenty of companies run more than one scheme. There were 3 different schemes at my last job, dependant on when you started.

ds9074

borders wrote: »

Why is it ok for the employer to change terms and conditions? The employee cant. A contract should be honoured by all parties. Thats the whole point of having them.

Opting out of the pension doesnt help the problem. The pension funds need more income, not less. A mass opting out would not help anyone.

Plenty of companies run more than one scheme. There were 3 different schemes at my last job, dependant on when you started.

Most employees have the right to end their contact and hand in their notice if they are no longer happy with the terms on offer.

As these changes are to take several years to come in that gives people plenty of time to look for alternative employment if they really feel the pension changes are make and break.

The only case where I could agree with your arguement is if the employee was somehow tied into the employment contract for an extended period and could not resign within that period.

I know lots of workplaces do run multiple pension schemes, the NHS is one, but I am not keen on the idea because it undermines the principle of equal rewards for equal work.

bilbo51

ds9074 wrote: »

I know lots of workplaces do run multiple pension schemes, the NHS is one, but I am not keen on the idea because it undermines the principle of equal rewards for equal work.

How does it do this? Do you think that this equality principle you cite is active within the NHS?

mjm3346

borders wrote: »

Why is it ok for the employer to change terms and conditions? The employee cant. A contract should be honoured by all parties. Thats the whole point of having them.


Opting out of the pension doesnt help the problem. The pension funds need more income, not less. A mass opting out would not help anyone.

Plenty of companies run more than one scheme. There were 3 different schemes at my last job, dependant on when you started.

The changes so far have never altered service already "earned" so the contract has been honoured and if it is changed you have always been given enough time to resign so never having to work under the terms of a new contract---as part of the contract you are probably supposed to work a certain number of hours, striking (for pay etc) does not honour the contract anyway.

Opting out (and asap) does help the problem as the proposed changes still do not cover the cost of the scheme never mind clawing any of the shortfall back so the fewer pensions that have to be paid out the better.


Plenty of companies do run more than one scheme, that maybe true, but if it is fair to match what is going on elsewhere then maybe the civil service pension schemes with the biggest deficits should be allowed to go under.

ds9074

bilbo51 wrote: »

How does it do this? Do you think that this equality principle you cite is active within the NHS?

There is a 1995 scheme with a normal retirement age of 60 with lump sum and a 2008 scheme with a normal retirement age of 65 without (built in) lump sum.

If you joined the NHS after April 2008 you can only be in the 2008 scheme. You could therefore have 2 people doing the same job but getting different pension benefits.

jamesd

BoxerfanUK wrote: »

Workers pensions should be honoured, thats what they understood when they took the job.

Agreed. People should get the same pension deal they signed up for, including having the pension paid out for the same number of years as implied by life expectancy when they joined. If they want the pension for a later life expectancy they should have to either take it later, have it actuarially reduced or buy the extra years. Unfortunately Hutton didn't go for keeping the value the same, he's suggested letting the employees keep the increases for already accrued years.

BoxerfanUK wrote: »

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!!!!

You don't really expect a Labour government with lots of public sector union funding to do a good job of that?

There's surely more to come. It's not really going to be future proofed until public sector pensions follow what the private businesses are doing, switching to defined contribution schemes.

Fairzo

Where a pension scheme has been changed from a normal pension age of 60 to one with a NPA of 65 (i.e the LGPS changed in 2008) is it possible to take an (unreduced) pension based under the original scheme at 60, with the further pension based on years accrued under the 2008 scheme payable at 65 (or whatever the NPA becomes)? Although there is reference to rights being "protected" it is unclear whether this extends to the terms of eligibility for payment.

To put this into context I am currently 53 with 35 years accrued pre-2008 and ongoing service post-2008.

In anticipation of the traditional anti-public sector comments I agree there are morons in the public sector but they also exist in private industry. I made a choice in 1975 and have accepted that contemporaries in the private sector have earned more, received bonuses etc. The choice of where to work was, generally speaking, available to all.

bilbo51

ds9074 wrote: »

There is a 1995 scheme with a normal retirement age of 60 with lump sum and a 2008 scheme with a normal retirement age of 65 without (built in) lump sum.

If you joined the NHS after April 2008 you can only be in the 2008 scheme. You could therefore have 2 people doing the same job but getting different pension benefits.

That's just nonsense. At the time the benefits accrue the current scheme is available to all scheme members.

Andy_L

Fairzo wrote: »

Where a pension scheme has been changed from a normal pension age of 60 to one with a NPA of 65 (i.e the LGPS changed in 2008) is it possible to take an (unreduced) pension based under the original scheme at 60, with the further pension based on years accrued under the 2008 scheme payable at 65 (or whatever the NPA becomes)?

Yes. Or take the 2008 scheme part early & suffer the reduction in pension