Public sector wellcome to the real world

Thicko2

cyclonebri1 wrote: »

You know the 1 thing you guys are prooving is that as per the original post, you are alien to to the real world. Wake up and smell the

Freedom of speech is wonderful - right up there with the freedom not to listen

cyclonebri - how ironic is your strapline, a selectivity that seems to apply only one way! Perhaps you need some help with thinking and critical analysis?

Your point in your other message above was the relevance to the original post.

A large element of this was the assertion that he/she did not want to pay extra taxes to pay for public sector pensions. Many of us here have identified as backed up with Hutton report, PAC report that based on the current arrangements this is not and will not be the case. The agreements from 2008ish protected this principle. You do not seem to understand this.

The other element of the OP was about the reduction of benefits, increase in costs in his scheme and whether the public sector should have the same impacts upon them. Many of us have had this in 2008, and more are planned.

The point which i have been raising (in line with the OP message) is why are armed forces staff excluded from additional employee contributions as they are the ones who are leading to the big unfunded/costs increases talked about by the government. This again is entirely in line with the OP post. He asked I have paid more why dont the public sector.


Your argument then is about a race to the bottom and percieved fairness, not this lie of unaffordability (unless we say this proportion of GDP on public sector pensions is too much?). Scheme members such as of the NHS scheme which has for 62 years paid back to the government more in receipts than expenditure find this untenable and irrelevant!

Yes most rational people can see this country is in the poo as you so eloquently put it. The bigger question to ask is how did we get into this position and the plans to get out of it. i struggle for some public sector schemes that are in surplus should have an extra tax on them to raise extra revenue to get us out of the poo. It is unfair.

try to keep up.

CFC

Koicarp wrote: »

Koicarp wrote: »

Unfortunately the "I pay your wages" brigade seem to think it easier to drag us into the !!!! with them, than to do something about the poor state of their own pensions.

What, like paying in 30% of our wages every month because our pension isn't backed by the government?
Great idea from the gold plated brigade.

dtsazza

Thicko2 wrote: »

I struggle for some public sector schemes that are in surplus should have an extra tax on them to raise extra revenue to get us out of the poo. It is unfair.

As has been pointed out before, there are no public sector schemes that are "in surplus" in any sensible meaning of the term. Being "in surplus" just means that the Ponzi scheme is currently able to pay out on its promises from decades past.

What we're discussing is whether the current promises can be paid out in future, and/or how they should be changed. In that context public pension schemes aren't in surplus; if everyone stopped paying in they would almost certainly* not be able to meet their current commitments in 20, 30, 40 years.


* (In fact to my mind that's the worst part about DB schemes - it's impossible to say for sure whether this is the case or not.)

CLAPTON

dtsazza wrote: »

* (In fact to my mind that's the worst part about DB schemes - it's impossible to say for sure whether this is the case or not.)

if this is so, why are you so absolutely positive that there are no schemes in surplus.. surely it's impossible to say

Zelazny

CLAPTON wrote: »

if this is so, why are you so absolutely positive that there are no schemes in surplus.. surely it's impossible to say

dtsazza's referring to public sector schemes, and most of them have no assets so they can't be in surplus.

If everyone left the scheme tomorrow, they'd have to stop paying pensions the day after (barring small amounts they have put aside for the next few pension payments)

Old_Slaphead

Zelazny wrote: »

If everyone left the scheme tomorrow, they'd have to stop paying pensions the day after (barring small amounts they have put aside for the next few pension payments)

Except for LGPS which is funded and could theoretically meet 75-80% of it's commitments. Perhaps more or less depending upon, inter alia, investment fund performance.

Thicko2

dtsazza wrote: »

As has been pointed out before, there are no public sector schemes that are "in surplus" in any sensible meaning of the term. Being "in surplus" just means that the Ponzi scheme is currently able to pay out on its promises from decades past.

What we're discussing is whether the current promises can be paid out in future, and/or how they should be changed. In that context public pension schemes aren't in surplus; if everyone stopped paying in they would almost certainly* not be able to meet their current commitments in 20, 30, 40 years.


* (In fact to my mind that's the worst part about DB schemes - it's impossible to say for sure whether this is the case or not.)

We need to look at the evidence, the best is Hutton, its assessment is that these schemes have peaked as a % of GDP and are declining thanks to the changes from 2008 and the RPI to CPI debacle. This is what answers to the best of our knowledge whether current promises can be paid out.

Can you dissenters or unbelievables of the Hutton report give me any evidence to the contrary.

The hard facts here and now is that the NHS scheme, pays back £2bn back to the treasury from the latest figures. The extra member contributions raised from next year will not go into the scheme for future years, they are being used for defecit reduction - its in the budget statement. Interestingly the NHS pension scheme has been in this version of suplus for all of its 62 year life. 2008 changes gave an agreement that this would not change, extra costs would fall on members, not employers (or default on taxpayers). Why is this not assurance for you?

You make a very valid point that if all current members left the scheme it would cause a tremendous financial catastrophe for the government. We need to be wary. They have estimated a 1% decline in membership due to the incresed contributions? a right or wrong assumption. i peronally thinks it is too low. This could be the law of unintended consequences.

I was chatting to a GP the other day, as wealthy people they currently pay 8.5% employee contributions. and as small business they also pay the 14% employer contribution. Their 8.5 is likely to go up to 14% I recall. This is getting close to a breaking point 28% where they could take their money elsewhere, 40k per year in pension contributions can buy a a signficant fund over 30 years plus. With the benefits of SIPP an further tax relief on business expenses.

A nuclear option from the GP community could be an en masse withdrawl and ask to be paid at CETV level. That would soon reduce the surplus back to the treasury.

Old_Slaphead

Thicko2,

The NHS employs approx 1.4m people and the average pay is around £25,000 giving a paybill of around £35bn pa.

Total pension receipts are (according to one of your earlier posts) £7.78bn which equates to a little over 20% of pay (incidentally around 2/3rds of which is paid for by the taxpayer).

Each year the pension liability goes up by (and ok I realise this is broadbrush).....

Payroll £35bn x 1/40th x 20 (years life expectancy for a retiree) = £17.5bn.

Despite the fact that a large number of current employees are paying for a (relatively) small number of current pensioners and leaving a surplus, it appears that their current contributions are covering less half the cost of future benefits.

I fail to understand you logic in insisting that the scheme is in surplus (other than it's a reiteration of what appears in many NHS staff journals - which are not exactly unbiased) in a way that a ponzi scheme isn't. Other than the ponzi scheme doesn't have some poor young taxpayer to bail them out.

As regards Hutton - my views are that his growth figures are optimistic and, although the costs (according to his figures) are falling, they still remain highish for the next 30 years. Not particularly an issue to me but maybe it is to anyone around 20-30 who will end up footing most of the bill.


Maybe the way forward is not to increase employee contribution but to reduce accruals to sat 1/100ths or 1/120ths

Ygor

Old_Slaphead wrote: »

Thicko2,
Each year the pension liability goes up by (and ok I realise this is broadbrush).....

Payroll £35bn x 1/40th x 20 (years life expectancy for a retiree) = £17.5bn.

Shouldn't the be 1/60th?

Your broadbrush approach has not discounted the liability increase.

In a funded scheme, the full liability increase would not have to be met solely by contributions. e.g. £7.78bn of contributions could be invested and grow to £17.5bn (probably more accounting for earnings growth) by the time pensions are paid out.

In an unfunded scheme there is a similar approach. There is a notional fund (the SCAPE account) but no freedom to invest in anything other than the government. The size of this fund is used to set total contribution rates.

It would be unfair to expect an unfunded scheme to have higher contributions than an otherwise identical funded scheme over the long term.

Koicarp

NHS 2008 scheme is 1/60th, 1995 scheme which most are on is 1/80th.

It seems that most contributors haven't read Hutton and base their arguments around the idea that their own pensions have been screwed so they want to see others go through the same process. Those who intimate that they have read Hutton seem to believe the report is flawed, which makes me wonder why our great leaders haven't yet noticed, have any of you thought about contacting Mr Cameron?