Public sector wellcome to the real world

cyclonebri1

jackyann wrote: »

My point, though, is not whether I like it or not. My question is: what is fair?

Had the taxpayers paid me 10% more throughout my working life, then I could have decided to invest that in a pension: would you think that was unfair?
That I had been paid 10% more than I was worth?
That would have meant my final salary as a senior nurse with 40 years' experience, would have been £35.2k.
This is not a rhetorical question, it is a genuine one, as we have to decide what public sector employees are worth.

Note: close friend has paid 20% of salary into a pension scheme for a similar amount of time in order to end up with 50% of final salary, so it is a close approximation.

PS: NAR - the point (of course) was that front-line public sector workers can't individually negotiate - that was why I put that bit in - wish I could do nice emoticons too - cheers!!!!!!

Too dam true I/we would

My final salary as a the chief engineer of a packaging company was just £30k and that was after 38 years, we have fought far harder than you guys but still got nowhere:o

The fact that you are negotiating together is your major strength, we were divided and conquered,

dtsazza

jackyann wrote: »

My point, though, is not whether I like it or not. My question is: what is fair?

Had the taxpayers paid me 10% more throughout my working life, then I could have decided to invest that in a pension: would you think that was unfair?
That I had been paid 10% more than I was worth?

My view on all of this is that defined benefits pensions make very little sense from a sustainability perspective because the pension provider is taking on liabilities with no accurate value (even actuarial techniques fall short because you'd need to look at actuarial tables of what will happen in half a century's time). And descriptions of certain DB pension schemes being fully funded confuse me, since by definition you can't fully account for the future payments.

I have nothing against public sector pensions being generally more generous that private sector per se, but I'd be a lot happier about it if they were all moved to defined contribution arrangements instead (presumably with a very high employer contribution).

Fundamentally this increases transparency - it's a pot of money, it's fully funded by definition and it's clear both what the transfer value would be, and what the benefits that the employees receive are. If your job pays £24k with a 25% employer pension contribution, it's easier to compare that against other positions in both the public and private sector.

And finally, the point where I have "skin in the game", it moves the burden of paying, and the investment risks, away from future governments. All of their pension-related obligations are discharged as soon as the payslip goes out, so there's no worries of a shortfall in the pot. And if demographics shift, then rightly it's the insurance companies that are subject to those risks instead of the Treasury. (Plus it means you're not in a situation where Government A makes promises that Government B has to keep in 50 years!).


I suspect one of the major problems with this is that for a transitionary decade or two, the government would have to pay out for the pensions of both retired people on DB schemes, and current employees (putting money into the DC pots).

But if it did happen, as a taxpayer I'd be very happy indeed.

This is not a rhetorical question, it is a genuine one, as we have to decide what public sector employees are worth.

I agree - but still, as above, it's much easier to say "£30k" (or "24k with 25% contributions") than it is to say "£24k with employee paying 3.6% for a 1/80ths final salary pension" - just how much is that latter one?

How much is a nurse worth on the free market

It's an interesting question, though the first major difference is that there'd be no concept of pay grades (if that's the term). You would be paid what you negotiated with the employer based on your performance and value to them. So a good nurse would be worth a lot more than £24k, and a mediocre nurse probably a lot less.

Still, that depends to some extent on a monetisation of healthcare in general - it's very difficult to judge what a nurse's job is worth (in a monetary sense) when there's no strict monetary values attached to the results. Which may have been your point.

patchwork_cat

jem16 wrote: »

Not quite sure what you're getting at here. Teachers and NHS staff currently pay 6.4%/6.5%. The top unpromoted teacher will rise to 7.6% as will a similar waged NHS worker.

LGPS workers on a similar wage are at 6.5%/6.8% so actually going to be less than the 7.6% proposed.

I am basing this on the data on the link I provided from the BBC website. My link provided earlier has been changed and now says what you are saying, but earlier it detailed civil services at 5.5% and a seperate link to NHS which said 6.5%, I see they have now changed that and indeed NHS says the 7.7% you quoted, typical! Sorry, now I look nuts!

jem16

patchwork_cat wrote: »

I am basing this on the data on the link I provided from the BBC website.

So am I which is why I am asking.

Dr_Wu

Just noticed (again on the BBC website) that the proposed pension changes for the NHS only apply to England and Wales.

Does anyone have any idea what's happening re pension negotiations for Scottish NHS workers like myself?

Surely it can't be separate, I know we have our own pensions agency but the terms and conditions are the same across the UK. I'm guessing that Scotland will just fall into line with whatever is agreed/imposed in England/Wales?

jem16

Dr_Wu wrote: »

I'm guessing that Scotland will just fall into line with whatever is agreed/imposed in England/Wales?

I'm in the same position as a Scottish teacher. Like you I'm going along with it usually turns out to be the same.

WaxiesDargle

some people need to have a word with themselves....i would have thought that the majority of people that come on this moneysaving website are not the wealthiest...well not on the forums I go on anyhow...

yet here are some saying to the nurse, firefighter, copper...i haven't got it so neither should you....instead of bringing up the standard of living of everyone, its a race to the bottom....while the rich bankers who put us in this mess and who we bailed out are raking in the bonuses...

the rich elite must be loving it....

see you all at the bottom

cyclonebri1

WaxiesDargle wrote: »

some people need to have a word with themselves....i would have thought that the majority of people that come on this moneysaving website are not the wealthiest...well not on the forums I go on anyhow...

yet here are some saying to the nurse, firefighter, copper...i haven't got it so neither should you....instead of bringing up the standard of living of everyone, its a race to the bottom....while the rich bankers who put us in this mess and who we bailed out are raking in the bonuses...

the rich elite must be loving it....

see you all at the bottom

I agree with the sentiment of your post but don't be misled about who lurks around on here.

There are some pretty well informed and no doubt well paid proffessional types posting here, remember most posts are offering advise rather than asking for it.

Plus there's no one more concerned about saving money than the chap that's "made a few bob";)

NAR

jackyann wrote: »

My point, though, is not whether I like it or not. My question is: what is fair?

Had the taxpayers paid me 10% more throughout my working life, then I could have decided to invest that in a pension: would you think that was unfair?
That I had been paid 10% more than I was worth?
That would have meant my final salary as a senior nurse with 40 years' experience, would have been £35.2k.
This is not a rhetorical question, it is a genuine one, as we have to decide what public sector employees are worth.

Note: close friend has paid 20% of salary into a pension scheme for a similar amount of time in order to end up with 50% of final salary, so it is a close approximation.

PS: NAR - the point (of course) was that front-line public sector workers can't individually negotiate - that was why I put that bit in - wish I could do nice emoticons too - cheers!!!!!!

I was just having a bit of fun earlier. I am two years from retirement and am glad that these additional contributions will only affect me for a short time; also I will be lucky enough to retire at 60.

I do feel sorry for my colleagues who will have to work until 66 (at least) and will have to make considerable additional contributions.

How short the private sector memories are. Those who retired 20+ years ago retired with very healthy pensions - don't hear any of them complaining about their lot!

I accept changes are needed - they have already started with average earning instead of final salary to determine pension. I also accept that 65(6) should be the retirement age, although I will avoid this myself. Successful private companies pay good bonuses to staff - Sports Direct being a fine recent example. No such bonuses get paid to public servants (with the odd exception to individuals). Private company salaries are now closer to public sector salaries, but that is not the fault of the public sector - it is down to the failure of the private sector themselves!

Old_Slaphead

NAR wrote: »

.

How short the private sector memories are. Those who retired 20+ years ago retired with very healthy pensions - don't hear any of them complaining about their lot!

Perhaps that's because you don't get too many 85+ year olds on MSE

I accept changes are needed - they have already started with average earning instead of final salary to determine pension. I also accept that 65(6) should be the retirement age, although I will avoid this myself. Successful private companies pay good bonuses to staff - Sports Direct being a fine recent example. No such bonuses get paid to public servants (with the odd exception to individuals). Private company salaries are now closer to public sector salaries, but that is not the fault of the public sector - it is down to the failure of the private sector themselves!

Maybe it's the fact that the private sector has to compete with countries with cheaper labour supplies.