Public sector wellcome to the real world

roysterer

Real
Apollogies I stand corrected. Just started looking at the report via shortcut by Poster who made reference to it, apollogies to him to, my fault I miss-read his post.

Engineer in Aerospace Industry.
Currently contribute 10% in Career Average Pension.
1/60th Scheme per year, Inflation up to 2.5% max per year)
£27500 Annual Salary non overtime.
*** Pensionable salary= £22500 - LEL (about £5000 I think this years figure) contracted out of S2P.
therefore =£375 per year + inflation up to 2.5% for each additional year I work untill retirement.

( was 5% contribution 1/60 Final Salary up until 2008 now Frozen / Deffered)
Frozen deferred = £10145 + Inflation up to (2.5% per yr max) payable at NRD 65.

Moby

ffacoffipawb wrote: »

Because for 13 of the last 14 years we had a Labour government, and the way they left the economy should answer that question for you.

Ah yes the same Labour Government that reduced hospital waiting lists dramatically, that rebuilt schools that were falling apart, that introduced a minimum wage. Ah yes of course I should have realised all you care about though by your signature is how much of your money they take....typical!

This economic crisis was not caused by the last Government....it happened all over the world. Look at the USA, look at Greece, look at Spain, Look at Ireland. The last Labour government was to blame for not regulating the financial services industry but that was because they were bending over to be bigger capitalists than the real capitalists!

Nobody is denying change has to happen but a lot of inaccurate rubbish about 'gold plated pensions' is being spouted on here. I haven't had a pay rise for three years either, I've also lost my car allowance and three days leave over the last year. I'm 3k per annum down on a salary which was pretty bad anyway and have never had a bonus. Wearside's situation is a total exception from the general norm. The average pension by people on the LGPS is about 4-5k per annum. Of course go on many of the threads on this site and you'll see people talking about their investments and their pension pots and they'll be mentioning numbers I can only dream of but that won't stop some of these very same people pontificating about public sector workers!

My scheme the LGPS has also already been through significant changes under the last Government and is now fully funded and by the way the Government negotiaing team has not to date been able to come up with accurate figures as to the health of the other schemes and the level of their liabilities but of course that gets lost in the rhetoric. It is no suprise that this issue suddenly 'blew up' when Danny Alexander decided to pre-empt the situation and make a statement about the Governments intentions during the midst of ONGOING negotiations. Cliff1805 is totally right about this Government's tactics of divide and rule and many are just falling for it hook, line and sinker!

dunstonh

Ah yes the same Labour Government that reduced hospital waiting lists dramatically, that rebuilt schools that were falling apart, that introduced a minimum wage. Ah yes of course I should have realised all you care about though by your signature is how much of your money they take....typical!

The same Govt that set up the financing for those that will end up costing many times more than the actual cost and see two generations from now still paying for the work.

Yes, there was a need for improvement but mortgaging our future, our children's future and their children's future to pay for it was extreme financial mismanagement.

beecher2

Can someone explain to me why they would want final salary pensions retained? Aren't average salaries far fairer to those who earn average wages?

I work in local government and my pension is fully funded. I pay 6% and am fully aware that this will probably have to go up. I don't expect to retire until 66 at the very earlierst, and I have to admit that it annoys me to hear other public sector workers say that they couldn't possibly work til they were over 60. Many people need to get real.

Zelazny

bigfreddiel wrote: »

well of course they don't apply to us - we're so lowly paid for a start (no pay rise for two years and when we do get one its a measly 4-5%), what with 30 days leave a year, flexi time,extra days off for the queens birthday, maundy thursday, christmas shopping day and a bonus as well - its no wonder we feel ripped off

Just reading through this thread and had to comment. A measly 4-5%? This year I got 1.3%, despite excellent appraisal. Last year I got no pay rise at all. 4-5% is bloody good going (although if inflation kicks off, we'll all need more than that to stay still).

cvd

The same Govt that set up the financing for those that will end up costing many times more than the actual cost and see two generations from now still paying for the work.

Perfectly true.

Of course George Osborne has progressed 61 PFI schemes worth £6.9 billion in his first year as Chancellor.

So absolutely nothing has changed there.
One set of incompetent !!!!!! has been replaced by another set of incompetent !!!!!!. That is the inevitable consequence of the primitive tribal nature of British politics.

Zelazny

swanny65 wrote:

The Government brought in average salary for all new entrants to the Civil Service pension scheme a few years ago. Now apparently that isn't enough and we will all have to pay more and wait longer.

Since 30 July 2007, new entrants to the civil service have been able to join the Nuvos scheme. When they first brought this scheme out I had a look and was astonished at how generous it was.

The scheme requires a contribution of 3.5% of your pensionable earnings (which is basically your salary, but doesn't include things like bonuses if I'm reading it right). Normal Pension Age is 65. Each year, a pension amount of 2.3% of your pensionable earnings is accrued, and this is increased in line with inflation until you retire.

Example: Joe has a salary of £20,000. He pays in £700 in contributions, and that gets him a benefit of £460 per year when he reaches 65 (with attaching spouse's pension and increases). To purchase an annuity of £460 per year (for a 65 year old male) would cost somewhere in the region of £15,000.

We do need to bear in mind that generally speaking, investment returns would be higher than inflation, but the thing is that the government doesn't invest money to pay for these pensions - they just pay out of general taxation. So the actual cost to provide Joe's benefits is around 70% of his salary.

The Nuvos scheme information is based on the scheme booklet: http://www.civilservice.gov.uk/Assets/NPS_booklet_with_insert0112_tcm6-1866.pdf (pdf warning)

property.advert wrote:

Fundamentally I believe final salary pensions are a good thing but their funding is horrendous. Firms should never have been allowed to take pension fund holidays but Gordon "Robber" Brown killed it all off with his stealth dividend reclaim tax theft.

I don't really see the problem with pension holidays. If you're doing well financially, you might pay a bit more towards your mortgage, then when times are tough you don't need to pay as much. As long as the pension funds are fully funded, why not take a break?

The problems arose when limits were placed on how fully funded a scheme was allowed to be. Initially they were going to value the benefits based on the cost of providing annuities equivalent to the benefits that the scheme is required to pay, but this would have meant that a lot of schemes were underfunded, so there was a lot of lobbying to change this. The actual funding ratio is based on whether or not the scheme can continue as a valid concern.

This sounds reasonable enough, but if something happens and a scheme goes bust, there's not enough money to buy out all of the benefits, as annuities cost a lot more if you're paying someone else to provide them.

The real problem came in when they restricted how much money a scheme was allowed to have to just over the amount it needed to keep running. This meant that if anything happened to the sponsoring employer, the scheme was guaranteed to be unable to afford to provide everyone's pensions.

grizzly1911 wrote:

The American model is pants IMO.

From what I have read the US government pay more per head, than the NHS costs, just to top up their system. So many people just can't get affordable cover. Is that really what we want?

Thing is, we're headed for the French model, rather than the American. The government will still be paying for all the health care (except for those who choose to go private) and we won't have to have our own insurance policies, but there will be competition between clinics, hospitals, etc.

You know, the French system that's widely regarded as probably the best in the world... http://news.bbc.co.uk/2/hi/health/799444.stm

beecher2 wrote:

Can someone explain to me why they would want final salary pensions retained? Aren't average salaries far fairer to those who earn average wages?

One of the big problems Final Salary schemes had even before the annuity rates went way up was that if someone was steadily earning £20k each year then suddenly got a payrise to £40k just before retiring, you doubled the cost of the pension provision (and you'd only put aside enough to cover the benefits at £20k). Average salary schemes fix this, so they're a lot better in terms of managing risk, and strike me as a lot fairer.

Andy_L

fted wrote: »

Just wanted to say that people currently employed will still have final salary pensions the new regulations only effect new members - so the final salary pensions still exist and are a LOT better than anything you guy have.

AIUI the plan is that future service for all employees, not just new entrants, will move to worse terms

Andy_L

Zelazny wrote: »

Since 30 July 2007, new entrants to the civil service have been able to join the Nuvos scheme. When they first brought this scheme out I had a look and was astonished at how generous it was.

When it was introduced it was planned to be the same value as the 1/60ths final salary scheme it replaced, carear average just shares the money out differently (eg it doesn't favour those with career progression over "plodders").
It seems likely that the planned move to careear average will use the same 1/60ths (1.67%) accrual rate rather than the increased rate thjat Nuvos uses.

Andy_L

beecher2 wrote: »

Can someone explain to me why they would want final salary pensions retained? Aren't average salaries far fairer to those who earn average wages?

The devil is in the detail, assuming they keep the same accrual rate as the final salary scheme then career average is only as good as final salary if pay rises only keep up with the inflation indexation rate used (CPI or RPI) if they exceed this then final salary is better (and vice versa).