Public Sector Pensions

CLAPTON

in the 80 the government decided that final salary schemes were 'overfunded' which reduced the government tax take

so they changed the rules and forced companies to reduce the FS scheme funding so increasing the government tax take from those companies

in the 80s the government deregulated financial services without creating effective alternative regulation; this lead to massive pension mis-selling which cheated many many people of a decent pension

in the late 90s the government changed the taxation rules on dividends which effectively reduce pension fund didvidend income


that's how it was.

Bigmoney2

moonrakerz wrote: »

Please don't try and persuade these [STRIKE]idiots[/STRIKE] clever people from pulling out of their publicly funded pensions - less for the rest of us to contribute to their "gold plated" pensions in years to come

Good point, only thing is if they don't make enough provision for themselves, and they seem to object to paying more than 5% of their salaries, they could end up with little other than the state pension. They then end up on benefits such as pension credit , council tax benefit, which is payed for by quess who, us the tax payer.

[Deleted User]

OP - please don't be dragged into the public sector v private sector debate or the "whose fault is it that pensions are a problem" - you did not create the problem; you did not draw up the scheme - you are an employee of an organisation that has a good pension scheme and you are entitled to be a member of it.

You came to the site looking for help/advice and in my view you are entitled to do that in the same way as anyone else. Before you do anything please remember that public sector pensions are at the moment related to your salary and length of service - NOT the performance of the stock market. You would need to be absolutely sure that any other form of investment could guarantee to out-perform the scheme you are in, and if it could be easily done, everyone would be doing it.

Just look at it this way - if private sector pensions were as good as, or better than, the pension entitlement that you have many of these comments would never have been made. That means you will struggle to find as good a deal outwith the scheme you are in. That is what makes some people angry - but it is NOT your fault - their anger should be directed at those responsible for the "system".

Everyone's pension contributions are going up and the payouts/retirement ages changing but you still have a very good deal.

All the best.

WR

caledonia84

To give an example of how much a final salary scheme costs, one of my clients has members paying between 5 & 10% contributions. The employer then puts in between 31 & 36% PLUS a monthly deficit payment of £750,000. They are not cheap and rare & getting rarer in the private sector. There are many & varied reasons for this, but perhaps it gives you some idea of the benefit you have, how much you'd have to pay if there were no taxpayer guarantee & why such threads get short shrift from those who no longer have access to them.

Just to avoid any confusion I'm on a new public sector pension scheme where I don't get a final salary pension, and I fully understand why that system could not go on.

Yours insisting WE don't know about the true cost of PS pensions was very derogatory.

If you read what I said I didn't direct that at anyone in this thread, there are people I have spoken to who were under the impression that we were getting a free pension and that we contributed nothing.

If you want to know more about politics, the world and how money works then start reading something like The Economist.

I felt like I had strolled into a gunfight with a penknife after the my initial post, This is helpfull and something I will start doing.

1. How much do you currently contribute?
2. How much do you think you will be asked to contribute when the changes are made?
3. What do you think the final salary pension is changing to?
4. How will that affect you?
5. In what way do you feel you are being walked all over?

1.I currently pay on the new scheme 8.5%, our employer contributes 13.5% to the new scheme over 40 years I don't know what they contributed on the old system but the guys pay 13%. This would

2.It's not certain how much exactley it will change but it looks like 11.5% and an increased retirment age while recieving less of a pension at the end

3.I'm not on a final salary pension.

4. It affects me because my contributions are going up, while we are on a pay freeze and also the cost of living is going up, which means I'm effectively taking a pay cut and recieving a smaller pension at the end.

5. I assumed the terms of my pension which I signed was a contract, and having it changed or scrapped alltogether makes me feel like I'm being walked over.

caledonia84

Wild_Rover wrote: »

OP - please don't be dragged into the public sector v private sector debate or the "whose fault is it that pensions are a problem" - you did not create the problem; you did not draw up the scheme - you are an employee of an organisation that has a good pension scheme and you are entitled to be a member of it.

You came to the site looking for help/advice and in my view you are entitled to do that in the same way as anyone else. Before you do anything please remember that public sector pensions are at the moment related to your salary and length of service - NOT the performance of the stock market. You would need to be absolutely sure that any other form of investment could guarantee to out-perform the scheme you are in, and if it could be easily done, everyone would be doing it.

Just look at it this way - if private sector pensions were as good as, or better than, the pension entitlement that you have many of these comments would never have been made. That means you will struggle to find as good a deal outwith the scheme you are in. That is what makes some people angry - but it is NOT your fault - their anger should be directed at those responsible for the "system".

Everyone's pension contributions are going up and the payouts/retirement ages changing but you still have a very good deal.

All the best.

WR

Thank you very much for this response, this coupled with some of the other posts have definately opened my eyes a bit, I won't be coming out of my pension scheme, I'll fight the changes instead

Soubrette

CLAPTON wrote: »

in the 80 the government decided that final salary schemes were 'overfunded' which reduced the government tax take

so they changed the rules and forced companies to reduce the FS scheme funding so increasing the government tax take from those companies

in the 80s the government deregulated financial services without creating effective alternative regulation; this lead to massive pension mis-selling which cheated many many people of a decent pension

in the late 90s the government changed the taxation rules on dividends which effectively reduce pension fund didvidend income


that's how it was.

That's exactly how I remember it - Conservative and Labour Governments have plundered the our pensions - short termism rubbish for which the pigeons will be coming in to roost.

I have said before - I have several small pensions including a 3 year non contributory final salary pension from a bank from the late 80s and a 5 year NHS pension which I finished recently. The non contributory (that's right, I made no contributions at all) is about double the NHS one (to which I have contributed). This is despite earning approx £4000 pa in the 80s compared to about £7000pa in the 2000s.

OP you would be mad to stop contributing to the public sector pension, it is a very good deal compared to what is now on offer by the private sector.

chucknorris

joncheadle wrote: »

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

Hopefully one day you will be wise enough to realize how silly this thread is, if only I could legally buy your pension benefits for what you have paid (plus inflation) I would jump at the chance, in fact I would gladly pay well over that amount down to the value of the revised pension scheme.

By the way I just started in the public sector last year and the revised scheme will still represent fantastic value.

jem16

caledonia84 wrote: »

1.I currently pay on the new scheme 8.5%, our employer contributes 13.5% to the new scheme over 40 years I don't know what they contributed on the old system but the guys pay 13%. This would

2.It's not certain how much exactley it will change but it looks like 11.5% and an increased retirment age while recieving less of a pension at the end

3.I'm not on a final salary pension.

Which scheme are you a member of? NHS Practitioner?

caledonia84

jem16 wrote: »

Which scheme are you a member of? NHS Practitioner?

Firefighter

jem16

caledonia84 wrote: »

Firefighter

So is the NFPS not a final salary scheme?