Public sector wellcome to the real world

jamesd

grizzly1911 wrote: »

I think is also a bit misleading to say they can retire at 55 or whatever. They can't retire until state retirement age, that is when they get their state pension that they have contributed to as well.

Average Joe in the street who hasn't contributed anything to a separate pension provision will not be able to get state pension until state pension age.

So why does that stop them from retiring earlier than state pension age, as most people already do anyway?

If someone wants to retire at an earlier age all they need to do is decide to do it and make sufficient financial commitment in the form of pension or other retirement investment contributions, plus having a realistic retirement date based on the level of contributions they are making.

johnaka

you wont get any sympathy from me.
you lot have had it to good for to long and about time some thing was done.
my son's girlfriend she is on £27,000 just teaching infants.
I've never earned any where near and I was on what is considered a good paid job @£20,000 if I was lucky, in manufacturing and it was bloody hard work.

Mr_K

johnaka wrote: »

you wont get any sympathy from me.
you lot have had it to good for to long and about time some thing was done.
my son's girlfriend she is on £27,000 just teaching infants.
I've never earned any where near and I was on what is considered a good paid job @£20,000 if I was lucky, in manufacturing and it was bloody hard work.

Not half as hard as teaching a load of infants. You wouldn't survive an hour.

BusyGirl

'just teaching infants'...how patronising!!!

I've been 'just teaching infants' for the past 18 years after spending 4 years at University where I 'just' earned my teaching degree. I work bloody hard and yes the holidays are fab, if you're so jealous why didn't you train to be 'just an Infant Teacher' as it is so so easy. Oh yeah, I earn £38,000 and have 13 weeks holiday and love my job!

erimus

Whilst there may be a need for some further public sector pension reform, the fact of the matter is that not all the public sector schemes are the same. I'm a member of the Local Government scheme (LGPS) and I already contribute 6.8% of my salary per annum (not the 1.5-3% that's always quoted about the civil service).

The LGPS is a fully-funded scheme, meaning its benefits are paid from the pension fund not out of direct taxation. In fact, the LGPS is one of the biggest investment funds in the country, meaning it provides much of the share capital that allows the private sector to 'create' the wealth that people keep banging on about.

The normal retirement age in the LGPS is already 65 and has been for as long as I can remember (and I've been a member for 18 years). Whilst people can choose to retire from aged 60 onwards (not 55 unless made redundant), they have their pension actuarily reduced to reflect this fact. Therefore, presuming the actuaries are doing their jobs properly, this type of early retirement shouldn't cost any more money in the long-term.

I don't know anybody who has a problem with moving to a career average scheme. The final salary scheme clearly benefits those at the top of organisations (who give us all a bad name) at the expense of everyone else.

What I do object to is increasing my contributions by 50% (particularly when they are already higher than most of the public sector), whilst reducing the end value of my pension and increasing the age at which I can draw it still further. I also particularly resent the way in which this debate is setting public sector workers against private sector ones, when the true debate should be how we can ensure a decent standard of retirement for all.

Oh, and just finally, when the government introduces its 'flat-rate' state pension of £140 per week, this amount will be reduced by (I think) £27 per week for public sector workers to reflect their current pension provision. That's almost £1500 a year less than everbody else, but you don't read much about that in the press do you?!

atush

I know a number of firemen, and police in several different countries. One of my first jobs @ 16 was cleaning offices with them after hours (before they retired they had second jobs to fill in on days they didn't work at all).

Every one retired early, and had a new job while taking their pension. And at my kids primary school a number of teachers (Incl a dep head ) retired at 55 and then went on to teach there as temps with 2 salaries. Some part time some full.

I know things are diffent now and I do sympathise. But not to the extent in that I should pay for you to remain as you were. We just can't afford it.

CLAPTON

grizzly1911 wrote: »

The illustration isn't necessarily correct. If matched against a private sector scheme there would likely be employer contributions and a degree of compound growth over the 37 years making the pot closer to 90K. Still less than the required figure I will agree but not quite.

Also from an actuarial point of view the public sector pool is a fairly big captive one so should be "cheaper" to operate.

Also don't forget on current levels income tax will be paid out of that pension and VAT , more than likely. In addition this level pof pension will probably lift them out of potential "benefit" payment so the gap does close.

In addition by making the employee pay more in now, tax revenue will be lost on the contribution.This doesn't justify the pension it just points out that the gap isn't as wide as suggested in the post.

I made NO comparision with private sector pensions: I was showing the inputs and outputs of an final salary scheme.
(a fantastic deal)
Compound growth... did you also factor in inflation.. I don't think so but if so show the calculations.

No idea what you are talking about that involves VAT; but as always am willing to learn


the other points make no sense to me but by all means show the workings so we can see what exactly what you mean

however if you have a final salary pension scheme and think it is rubbish then give it up and make your own priavate arrangements and tell us how you fair.

Andy_L

erimus wrote: »

The LGPS is a fully-funded scheme, meaning its benefits are paid from the pension fund not out of direct taxation.

Except the original funding of that fund that fund (and any current shortfalls) are paid out of taxation

erimus wrote: »

The normal retirement age in the LGPS is already 65 and has been for as long as I can remember (and I've been a member for 18 years). Whilst people can choose to retire from aged 60 onwards (not 55 unless made redundant)

Look up the "rule of 85". Drastically simplifying, until the changes a few years ago, anyone with25+ years service could go at 60. With permission (which until recently was almost always given) anyone with 30+ years permission could go at 55 without reduction for early payment

erimus wrote: »

I don't know anybody who has a problem with moving to a career average scheme. The final salary scheme clearly benefits those at the top of organisations (who give us all a bad name) at the expense of everyone else.

Then they don't understand the system - especialy with the move to CPI indexation everyone will be worse off. Plodders/short service employees will just be less worse off than others

erimus wrote: »

What I do object to is increasing my contributions by 50% (particularly when they are already higher than most of the public sector),

6.5% is typical (NHS & teachers pay the same). The only people who pay less are the civil service (who have a carear average scheme instead) and the military (who have a formal abatement of their salary instead, reducing the final salary when it comes to working out pensions plus a few niche groups like Judges

erimus

Andy_L wrote: »

Except the original funding of that fund that fund (and any current shortfalls) are paid out of taxation

Not quite true. There is an agreement in place that any projected shortfalls will be met by an equal increase in both employer and employee contributions. Just out of interest, the LGPS currently generates a cash surplus of £4bn per annum.

Andy_L wrote: »

Look up the "rule of 85". Drastically simplifying, until the changes a few years ago, anyone with25+ years service could go at 60. With permission (which until recently was almost always given) anyone with 30+ years permission could go at 55 without reduction for early payment

I don't need to look it up thanks. It's one of the reforms that we agreed to make a few years ago, so no longer applies to those currently working in local government.

That's part of my point really. People keep quoting friends of theirs, or people in the press, who have retired early from the public sector on generous terms. Certainly within the LGPS, those kinds of anomolies have already been removed for those of us actually still working.

Andy_L wrote: »

Then they don't understand the system - especialy with the move to CPI indexation everyone will be worse off. Plodders/short service employees will just be less worse off than others

No, I disagree. People do understand that they would be worse off, but can see that the final salary scheme disproportionately benefits those at the top of the organisation. It is those very same senior managers whose pensions are then used in the media to paint a picture of all public sector pensions.

As an aside, I can't foresee too many pay rises in the future that will exceed the rate of CPI, so I don't think the difference will be that significant.

Andy_L wrote: »

6.5% is typical (NHS & teachers pay the same). The only people who pay less are the civil service (who have a carear average scheme instead) and the military (who have a formal abatement of their salary instead, reducing the final salary when it comes to working out pensions plus a few niche groups like Judges

But the NHS and teachers have a normal retirement age of 60 for existing members, not 65 as already exists in the LGPS. Also, and not that I begrudge them this, but you are wrong about the armed forces as they have a non-contributory pension, meaning that it is 100% funded from direct taxation.

I notice that you don't dispute that public sector workers will be disadvantaged under the so-called 'flat-rate' state pension? Something that should be taken into account by others on this board if we are comparing like-with-like.

My main point, without wanting to sound like I'm joining the 'us against them' debate, is that not all public sector pensions are the same. The media, however, tend to find a senior civil servant who has worked for 30+ years and retired early handsomely (only to then set up his own consultancy), and portray everyone else in the public sector as receiving the same.

Moby

As has been clearly shown there are different schemes with different entitlements but of course that won't stop the Daily Mail readers concentrating on the 'unjust' ones that they are paying for out of their hard earned cash! Let's hope they offer the same level of concentration when filling out their tax returns!