Public sector wellcome to the real world

Old_Slaphead

Ygor wrote: »

Shouldn't the be 1/60th?

Your broadbrush approach has not discounted the liability increase.

Sorry about that oversight - that reduces the annual liability somewhat.

Thicko2

Old_Slaphead wrote: »

Sorry about that oversight - that reduces the annual liability somewhat.

I think only MPs, judges and Fred the shred benefited from 40ths scheme. There's a suprise!

Gracchus_Babeuf

roysterer wrote: »

What is happening today regarding Public Sector Pensions and contributions is what has already happened in the Private Sector.
Final salary Pensions are now gone forever!!!!!!! as much as we all dislike it.

2 years ago I went from a 5% Contribution 1/60th Final Salary scheme to a 10% Contribution 1/60th Career Average Pension.
This was non negotiable take it or leave it. So I guess the proposals put forward today are not so bad after all.

The feeble argument that Public Sector workers sacraficed higher earning potential by working in the Public Sector for greater Pension benefit is complete Bulls*** . If that's the case then wellcome to the private sector for those of you who think you can command far higher salaries, I think you will get a nasty surprise?

My contribution has doubled for less benefit. I am not prepared to pay higher income tax to subsidise public sector pensions as well.

I can guarantee that you will not receive any support if you choose to strike from the vast majority of private sector workers and private sector Trade Unionist.

Give it another few years and Career average will be taken away from us all, only for Defined Contribution rip off Annuity type Pensions to be left on the table.

I guess we have all been shafted by incompetent past and present governments. I feel sorry for the young people coming out of University in 4 years time with £50 - £60,000 of debt, they have got no chance of getting any good pension provision. Did the Public Sector Unionist consider them?
Answer:- a big fat NO. The Public Sector Metropolitan Police were hell bent on dealing with them as we all witnessed.

Unlike you I don't have this feeling of schadenfreude towards the public sector. I have never begrudged them having better pension benefits - the private sector is better in lots of other ways, so it evens out in my view.

What anger I do have is directed towards the fat cats at the top of the corporate ladder, who have used the excuse of higher maintenance costs to close virtually all final salary pensions. It was simply not necessary to do this. What they could (and should) have done instead was to keep the schemes open, but share the rising costs with the employees. Instead they closed them and replaced them with insulting 'money purchase' schemes with contributions of 5-10% from the employer instead of 25% or so under the old system. Now people like myself have zero certainty of receiving anything more than a pittance in old age. The stockmarket is simply not growing any more and other investment options barely keep your money in line with inflation. The best thing would be to double the state pension as a better safety net to protect future retirees, otherwise millions will be heading towards dire poverty.
This is a very urgent situation that the government really needs to sort out.

Gracchus_Babeuf

Andy_L wrote: »

yes, both,as you say, as a political decision and because the AFPS will become more valuable than other pensions (as they become more expensive for employees) and thus be reflected in the deliberations of the pay review body

Of course it was a political decision, otherwise the tabloids (especially The Sun) would have been up in arms. And it never pays to upset 100,000 people with access to heavy weaponry, does it? :rotfl:

Old_Slaphead

Gracchus_Babeuf wrote: »

What they could (and should) have done instead was to keep the schemes open, but share the rising costs with the employees. Instead they closed them and replaced them with insulting 'money purchase' schemes with contributions of 5-10% from the employer instead of 25% or so under the old system. Now people like myself have zero certainty of receiving anything more than a pittance in old age. The stockmarket is simply not growing any more and other investment options barely keep your money in line with inflation.

The difficulty was/is that private companies are in a competitive market place and consumers, in many cases, want cheap foreign goods. You don't see too many "Buy British" banners around these days.
My company closed it's scheme several years ago because our main customer insisted on price reductions each year otherwise it would move business to China. It was not negotiable - no pension/pay rises or P45s - our choice.

The upside is that managing your own pension makes you much more aware of the financial & business world in general, retirement planning, what products are on the market, how best not to get ripped off etc etc. Unfortunately this means that one becomes, with having a vested interest, very much more pro private and anti public sector.

cyclonebri1

Old_Slaphead wrote: »

The difficulty was/is that private companies are in a competitive market place and consumers, in many cases, want cheap foreign goods. You don't see too many "Buy British" banners around these days.
My company closed it's scheme several years ago because our main customer insisted on price reductions each year otherwise it would move business to China. It was not negotiable - no pension/pay rises or P45s - our choice.

The upside is that managing your own pension makes you much more aware of the financial & business world in general, retirement planning, what products are on the market, how best not to get ripped off etc etc. Unfortunately this means that one becomes, with having a vested interest, very much more pro private and anti public sector.

And that is exactly typical of the situation we all faced in the private sector, ie, if you don't accept it your jobs a gonna, can't put it more simply.

Several folks have asked why we didn't stand up and fight?
Well, we numbered in the 10's or 100's, the thousands had died long ago.
Privately owned companies would rather simply fold and be reresurected than face the issues now confronting the rest of the economy.

I'm not anti public sector, but I trully am anti blinkered/naive government employees that think now they are being singled out, that is not the case, at least in the context of this topic ON PENSIONS, :mad: , if this was kept on topic, it would be best for all that have contributed so far

dtsazza

CLAPTON wrote: »

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

Because (to me at least), being in surplus means that the scheme has enough assets to meet its liabilities.

DB schemes can't be in surplus, simply because the liabilities are unknown (due mainly to the variable of final salary; I'm presuming the scheme purchases an annuity off an insurer to hedge the longevity risks).

DC schemes don't suffer from this at all - their liability is "we'll put some money in your pension pot" which they discharge immediately, by doing just that.

In the most straightforward sense, I consider a scheme in surplus if it could be wound up now and still meet its obligations. And there are no DB schemes for which you can definitively say that is the case.

CLAPTON

dtsazza wrote: »

Because (to me at least), being in surplus means that the scheme has enough assets to meet its liabilities.

DB schemes can't be in surplus, simply because the liabilities are unknown (due mainly to the variable of final salary; I'm presuming the scheme purchases an annuity off an insurer to hedge the longevity risks).

DC schemes don't suffer from this at all - their liability is "we'll put some money in your pension pot" which they discharge immediately, by doing just that.

In the most straightforward sense, I consider a scheme in surplus if it could be wound up now and still meet its obligations. And there are no DB schemes for which you can definitively say that is the case.

you have a made an arbitary definition to say that if you 'don't know' or 'isn't knowable' then that is equivalent to 'not being in surplus'.

It seems an abuse of logic and language to me but as we understand each other then there is no benefit in pursuing tautological issues rather than those of substance.

dtsazza

Gracchus_Babeuf wrote: »

What anger I do have is directed towards the fat cats at the top of the corporate ladder, who have used the excuse of higher maintenance costs to close virtually all final salary pensions. It was simply not necessary to do this. What they could (and should) have done instead was to keep the schemes open, but share the rising costs with the employees. Instead they closed them and replaced them with insulting 'money purchase' schemes with contributions of 5-10% from the employer instead of 25% or so under the old system. Now people like myself have zero certainty of receiving anything more than a pittance in old age.

While I appreciate the financial blow at the change of pension terms, this is not a fundamental shift - it's just a pay cut.

If you were being paid £30,000 before with a 33% contribution you were effectively getting a £40,000 salary. If under a DC scheme you get paid £30,000 with a 10% contribution you're effective salary is £33,000.

And critically if you get paid £36,500 with a 10% employer contribution your effective salary is £40,150, under which you can mirror the previous scheme by simply paying higher contributions yourself (contributing £16,500 a year to the pension still leaves you with £20,000 in the pension as £20,000 salary, just as under the initial DB example).

So granted, the pension contributions are less generous, and it's an effective pay cut. But it just changes the balance of the numbers, and doesn't give someone "zero certainty of receiving anything more than a pittance in old age" any more than a 10-20% pay cut would under a persistent DB scheme. (Especially as the reduction in pension contributions & uncertainty, all things being equal, would allow a faster rate of pay rises.)

The stockmarket is simply not growing any more and other investment options barely keep your money in line with inflation. The best thing would be to double the state pension as a better safety net to protect future retirees.

I'm not really a fan of raising the state pension as it means that no matter how profligate you were earlier on in your life, you've got a guaranteed good standard of living to fall back on. That introduces a huge amount of moral hazard, and reduces the incentive for people to take responsibility for themselves.

Along a similar line, they'd have paid the same contributions as those retiring a few years earlier but would be getting double the payout. Such an arbitrary distinction doesn't seem very fair.

(Personally I'd prefer the opposite - no state pension but individuals given a rebate equivalent to their ostensible contributions. People can then invest this money themselves however they see fit, rather than hoping that future governments will keep the scheme ticking over for long enough to be paid out from.)

cyclonebri1

Again, trying to bring this this back on target, take a look at the ITV programme on pension provisons showing at present.

OK it's a media presentation, but I've lost of the number of times "generous public sector pensions" has been mentioned,