Public Sector Pensions

joncheadle

Hi All,

I currently pay into a public sector pension scheme and like other people I am facing the prospect of having to pay more out with less coming in.

What I really want to do is take out the contributions I have made sofar and invest these elsewhere however everywhere I ask the question about the possibility of doing this I am met with a negative response.

Whilst I accept I optted into the scheme in the first place I don't see why I should be held to ransom about increased future payments whilst the government is quite happliy investing my contributions todate.

Can anyone help?

Thanks
Jon

CLAPTON

the public sector schemes are very good schemes which can't realistically be matched by private pensions

you can of course stop making new contributions to the scheme and lose the guarenteed taxpayer supplement and start a private pension; you would be mad to do this but it is a possibiliy if the principle of the thing is more important that your final pension

Loughton_Monkey

joncheadle wrote: »

....What I really want to do is take out the contributions I have made sofar and invest these elsewhere however everywhere I ask the question about the possibility of doing this I am met with a negative response.

The reason for a negative response is because you physically cannot do it. It is like a lot of things. Once you have agreed to pay, and have 'received' the benefits, you cannot undo it. This is specifically strict in pension payments where tax relief is concerned. Once you contribute, it is not 'your' money any more.

joncheadle wrote: »

Whilst I accept I optted into the scheme in the first place I don't see why I should be held to ransom about increased future payments whilst the government is quite happliy investing my contributions todate.

Can anyone help?

Thanks
Jon

What do you mean 'held to ransom'?

You can opt in, or your can opt out. Since you joined the scheme, several things have happened.

1. The cost to the taxpayer of providing the pension benefits has escalated by a huge amount [all the while your contributions were a static small percentage].

2. In view of this, the amount you are being asked to pay has increased a bit, and the inflation costs of the benefits has been controlled a bit more. These bring the cost to the taxpayer back to 'acceptable' figures again.

All you can do, if you don't like it, is to opt out.

After that, by all means 'invest' your own contribution (which is a mere fraction of what your accrued benefits are costing). Provided your investment skills are up to scratch, then you can safely assume that your ultimate pension will be that same small fraction of what it would have been if you had stayed in.

As taxpayers, the more people who leave the scheme, the more we benefit.

If someone had an arrangement with me whereby I gave him £20 every month, and he put £50 into a bank account for me, I would bite his hand off. If he later told me this is costing too much, and that he could only put in £45, I would not call that being 'held to ransom'.

laurel7172

You would be mental to leave your public sector pension.

I started a stakeholder around the same time I joined LGPS. At the last statement dates they were projecting roughly equal benefits (though the stakeholder ones will have crashed with the stock market as I still have 20+ years to retirement.) But the stakeholder costs me roughly four times as much every month.

I've had my pension cut more savagely than just about anybody (a full time contract switched to a term time contract *purely* to reduce the pension rights of lower paid school staff), but it's still the best deal going.

Honestly. In the nicest possible way. Mental.

atush

You should NOT do this. You cannot better the rates you will be getting, even with the increase in contributions.

dunstonh

What I really want to do is take out the contributions I have made sofar and invest these elsewhere however everywhere I ask the question about the possibility of doing this I am met with a negative response.

The negative responses could be for two reasons

1 - you cant do it
2 - you would be daft to do it.

Whilst I accept I optted into the scheme in the first place I don't see why I should be held to ransom about increased future payments whilst the government is quite happliy investing my contributions todate.

I suggest you understand what you have before you start making rash and foolish decisions.

Out of interest, what investment elsewhere do you have in mind that you think would provide better returns?

jem16

Be prepared for a lot of posts similar to this one.

In my staffroom the headline poster from the union reads;

Work Longer!
Pay 3% more!
Get 15% less!

No other explanation.

Spirit_2

I have a public sector pension. If preserving this costs me more than I will do this. The present arrangements are not fair on younger generations in that we place a disproportionate burden on them.

There needs to be a recognition of equality across generations as the young struggle to afford education, homes and pensions themselves.

I do belong to a 'trade union' and do not want to see them represent a wholly self interested protection of status quo concerning their current memberships positions.

jamesd

The last line on that poster should be ... and still get a way better pension deal than the private sector.

Should really be scrapping the defined benefit schemes and switching to private sector type defined contribution to improve comparability and mobility of workers between the public and private sectors, including agencies and contractors doing work for the public sector. That would also help to solve some of the gender inequality and retirement age issues.

caledonia84

I work in the public sector, and I'm also in the same boat as you, I feel held to ransom aswell. I need to make a decission on what I'm going to do and I really don't know.

We may get a better deal than in the private sector but that was sold as a perk of the Job, if I was to work as an equivelant private sector employee I would be making more money.

I actually feel I have been miss sold a pension, I can see this coming out in the wash in years to come, such as people being miss sold ppi is now.

It is frustrating to say the least that the majority of the taxpayers dont fully understand how our pensions work, and how much we pay in to our own pensions, yet are very quick to point out how good a deal we get.

There was a fund put in place to allow our pension to be self perpetuating (or at least much more sustainable) but Margaret Thatcher decided to spend it and then never put the money back.

:(:(:(

dunstonh

I actually feel I have been miss sold a pension, I can see this coming out in the wash in years to come, such as people being miss sold ppi is now.

Not even close in comparison. Mainly as no alternative to the pension even comes close to matching the benefits, either pre or post changes.

It is frustrating to say the least that the majority of the taxpayers dont fully understand how our pensions work, and how much we pay in to our own pensions, yet are very quick to point out how good a deal we get.

You do get a very good deal. You get a pension that would cost around 25% of your salary if you wanted to match it in the private sector. In the past, public service meant lower pay but a reward in a decent pension. When Labour increased public sector pay faster than private sector, then some of that goodwill has gone away. You cant have both things.