Incensed again

atush

Just look at Italy. They've all shorted Greece to the brink and Italy is in their sights (ie the 'shorters').

Just you wait this keeps on and it will be us in their sights. They are already selling GBP which is down a few cents in the last few days.

cvd

Although what index of earnings will they be using? & will they retroactively change that indexs if it's to high?

It should be this:

http://data.gov.uk/dataset/average_weekly_earnings

However, your last point is a very good one. I used to be a fan of career average schemes - but the current government has shown that they are prepared to lie about inflation indices and that has caused me to change my mind.

Pensions are long term investments but politicians (of all parties) take only short term decisions.

Thicko2

dshart wrote: »

Well from what you all say there is nothing wrong with the systems, the government are telling lies, there in no deficit and maybe even the amount of the country debt is just fictitious.

But if the schemes are so well funded how come there is general acceptance that a private sector worker would have to save a lot more to get an equivalent pension?

I am only speaking for the NHS scheme as identified above. Not the armed forces where i do believe a signifcant problems exists now and going forwards etc.

I understand teaching colleagues are still awaiting a delayed valuation of their scheme and are saying how can we have an informed sensible discusion based on facts specific to their scheme.

Yes the government has lied, look at the discussion between maude and humphries on the today programme a few months ago - i will look it up. Hutton actually showed costs declining as % of GDP and the government said it was unaffordable.

The hard copper bottomed facts is that the original (and i think fair) challange that you offered was that the government should cap their current levels of contributions into the schemes. This has already been agreed as a % of earnings 5years ago. Being parochial and my scheme specific currently there is no need to increase members contributions and reduce benefits in the short term.

I will repeat, to be fair to the government over the long term (and i think this is included in the Hutton analysis) the cap may well come into play. Rules are unclear how this will operate and we need to be clear and agree on how this should work. This is what we should be negoitating within the NHS scheme.

What is very clear over the next 3 years my increased contributions from 7.5% to 13% will not provide any benefits to the NHS pension scheme in year funding. They will flow back to the government for defecit reduction.

I struggle to believe Danny Alexandar's view that this is a 25 year settlement based on current broader government policy. If, and a big if, they are in place for more than 1 term, the policy of privatisation of public services will return harder and faster, (fair deal proposals will be abolishing the same pensions terms for service transfers), will lead to the pay as you go current system having less members paying in, and signficant amounts still to pay out.

Similarly i think the governments assessment of opt outs from the schemes is too low versus the current economic environment. This will lead to less members paying in as well.

The net results of these will mean that the NHS pension scheme rather than paying back to the treasury will be demanding more from it.

Thicko2

Here you go, transcript here from guardian site.


ED: I want to just ask about your credibility. The prime minister said the other day [that the pension system is in danger of going broke]. Do you stand by that claim?
FM: Well, I'll just quote what Lord Hutton said, the former Labour pensions secretary, when he did his report. He said very clearly the status quo is not tenable.
ED: That's not a quote, is it. Because I did my little control f key search on the word tenable [ie, a word search] on his report [and] couldn't find it in his report.
FM: He has said that the system is not tenable.
ED: Did you say that it was going broke if nothing was done. Because I can only find that graph which shows the cost falling in terms of GDP. It has been repeated so often that it's unaffordable, it's out of control. I just can't see it in his report. He doesn't say it's unaffordable. He says it's not fair. And that's a very different justification for reforming pensions than it's unaffordable.
FM: And he said that if we want the system of defined benefit pensions, which few people elsewhere have, to be sustained into the future, long-term reform is needed.
ED: Is it unaffordable?
FM: It will be unless we make these changes.
ED: That's not what he says.
FM: Well it will be. The cost to taxpayers of supporting public sector pensions has gone up by a third. It's £32bn a year. What Lord Hutton said in his report is that the extra costs of people living longer – because the average 60-year-old today is living 10 years longer than they did in the 1960s.
ED: Have you read the report?
FM: Yes, of course I've read the report.
ED: Can you tell us why does it show the cost falling over the decades in terms of the proportion of GDP going to public sector pension recipients? Just explain why it's going down, because if you've read the report you will know the answer.
FM: The answer is that the expenditure on pensions by the taxpayer has increased by a third.
ED: Why is it going down? In his report, the big picture is it's going down. Why is that? Just explain to the public why the cost is going down.
FM: Well, the cost to the taxpayer is going up. That's the point.
ED: As a proportion of GDP?
FM: The cost of the increase, the cost of paying pensions to people who are living longer, which is obviously good news – you cannot continue to have more and more people in retirement being supported by fewer and fewer people in work. That's why it's so important that we're going to ask people, if you want to continue to have very good pension schemes which are a guaranteed level of pensions available to few others, that's got to be paid for by higher contributions by those who are going to have those pensions, and to ask them to draw those pensions later.
ED: I'm going to read you a line and ask you whether you think the account you've given is the same as the one he gives. "There have been significant reforms to public sector pension schemes over the last decade. Some of these changes have reduced projected benefit payments" - blah, blah, blah - "Projected benefit payments fall gradually to around 1.4% of GDP after peaking in 2010-11 at 1.9%." That's just saying it's not unaffordable, we don't want to afford it. It's cheaper. It's going to be 25% cheaper in the next few decades in terms of the burden on GDP than it is at the moment.
FM: What he's saying is that long-term reform is needed.
ED: Absolutely. For different reasons.
FM: The point is, there's been widespread pension reform across the economy. People in the private sector have seen old, defined benefit schemes disappear. What John Hutton has said - and we've totally agreed with - is we do not want to see a race to the bottom.

dizzie

I'd like to see an annual cap (in monetary terms - not %age terms) on the taxpayer contribution into each individual PS pension scheme. Or, alternatively, a decreasing sliding scale of taxpayer contribution (as a percentage of salary) which means that higher earners contribute a bigger percentage into their own pensions.

Why should the British taxpayer subsidise the pension of a hospital consultant on a £120k final salary to the tune of 10 x the amount that they subsidise the pot of a public sector worker on £12k per annum? Surely the hospital consultant can afford to contribute more into their pension scheme if they really want to retire on a huge pension.

Cuts affect everyone. Look at the students now having to pay three times the level of fees for higher education and saddling themselves with a lifetime of graduate debt. I'm afraid I have very little sympathy with the public sector workers for striking. Gordon Brown raided the private sector pensions and the economy did the rest to bring these into shocking decline. What power did private sector workers have to prevent this? On the other hand, it seems that the public sector feel that they DO have the power to force the government to spare them from the sorts of cuts seen elsewhere in the economy, by striking and bringing public sector services to a halt.

After the reforms, public sector pensions will still be unrivalled. Private sector pensions will not come close to matching them! I think it is time for people to be a little less self-centred and think about what is fair and just.

BobQ

dshart wrote: »

It has already being mentioned on one of these threads by someone in the health service that they could earn 30% more in the private sector, but when you look into it a bit more closely that 30% extra wages include the fact that it is short term irregular work, with no sick benefits, pension payments, holiday pay etc. The days of public sector workers not getting market rates has gone apart from maybe the top bosses in comparison to top executives in private companies. The public sector has joined the real world wage wise and now need to do the same with pensions.

Re the nursing example, certainly from the employers point of view they do not mind paying 30% more for temporary workers but this is true of a lot of areas for the reasons you say. But another factor is that they do not have to pay training costs either. But the same applies to nurses on a full timecontract in the private sector who also get paid more (not 30%) than NHS nurses. The point is that when you do a "like for like" comparison salaries are to varying degrees not the same. T(he average salaries that the government quote disguise the fact that the public sector has contracted out much of its unskilled jobs and employs proportionately more highly skilled people which means average salaries are not the same.) This means that the different pension contribution rates across the public sector mask a different approach to reward. Some have higher contributions and more comparable salaries, others have lower contributions and pay lower salaries than in comparable jobs.

Andy_L

dizzie wrote: »

I'd like to see an annual cap (in monetary terms - not %age terms) on the taxpayer contribution into each individual PS pension scheme.

Like the ones that were introduced when the schemes were revised ~5 years ago?

dizzie wrote: »

or, alternatively, a decreasing sliding scale of taxpayer contribution (as a percentage of salary) which means that higher earners contribute a bigger percentage into their own pensions

This already happens in the NHS & (IIRC) LGPS

Old_Slaphead

Andy_L wrote: »

Like the ones that were introduced when the schemes were revised ~5 years ago?

Given that LGP Schemes are more underfunded than 3 years ago and employers contributions have increased to compensate - why therefore haven't employee contributions incresased too ?

Generally across the public sector - if there was a 'cap' on employer contributions and most parties acknowledge that the cost of pension provision has increased, why are the unions making such a hoo-ha about future employee contribution rises

Andy_L

There are 2 different "types" of employers contributions. Contributions for pension service accrued in year & contributions to rectify funding shortfalls caused by poor investment returns/increased longevity/past contribution holidays etc.
The cap only applies to the in year contributions and is a %age of salary (~20% rings a bell but don't quote me on that). As with most pension changes legislation stops it being back dated - not to mention that a lot of the deficit would be due to obligations to retired/deferred members

"why are the unions making such a hoo-ha about future employee contribution rises"

I'd say 2 reasons,
1. any increase due to the cap would be in addition to the current +3.5%
2. A lack of true negation on options, (eg contributions, benefit levels, NRAs, pensionable salary definitions) whilst separating pensions reform from pay reform when the 2 are inextricably linked

paulrn_2

I would like to throw my hat in the ring here, I cannot go into vast amounts of figures but can give some insight into how I and my other half feel about the pensions. As my tag suggests I was in the RN I joined and did 37 years and I am now on pension. When I joined I did not think about the pension but as time progressed it became the major fact for me staying, It was part of the package and promised to me by the various governments of the day. My friends in the 80's / 90's and 00's were on better equivilant pay and raved about their pension pots they made their choices I made mine. My partner is a Civil Servant still working and made the same choices we would work and in many cases do the jobs that others would not do and put up with conditions others would not.
It takes a certain type of person to be shot at, deal with angry violent customers in Job Centres and tax offices and to put up with violent drunks in emergency and casualty wards. In the main they do not moan and get on with it expecting promises to be upheld.
It is fair in the present climate that contributions be raised but not at the same time as reducing the amount paid out and the age it is collected, it is also fair to change the rules for those joining now as they will be able to make an informed decision.
The Government and press have whipped this up into a frenzy which give people who are struggling a target to become emotional about, we keep hearing its not fair, never once did anybody say to me when they were collecting good wages and bonuses and their pension pots were growing at silly rates fueled by the stock market, would you have offered to give up some of that.
Remove the emotion the country has made a commitment and there is little point in becoming vitriolic about this put the mail and express to one side and move on.