Incensed again

Old_Slaphead

So the 'cap' doesn't apply to investment performance (ie general economic conditions?).
What about the future lower growth projections (which have recently been revised downwards) and increaseing longevity - do current members cop for either of those?

Basically, given what's happened to pension scheme funding since 2008, members don't seem to have been asked for any extra despite the 'cap'. My LA now provides around 18% as employer contribution and this is planned to increase over coming years.

Andy_L

Old_Slaphead wrote: »

So the 'cap' doesn't apply to investment performance (ie general economic conditions?). What about the future lower growth projections (which have recently been revised downwards)

I believe it would indirectly apply as it the predicted investment returns used to calculate employers contributions would be based on general economic conditions.

Old_Slaphead wrote: »

increaseing longevity - do current members cop for either of those?

Yes as that would increase the employers contributions for current members so the cap would be hit earlier.

cyclonebri1

paulrn wrote: »

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.

I'd like to say that your input is valued :T
but I have a few issues

The red bit, thats the way it affects us all, hence the real issue

The purple bit. The only folks that raved about their pension pots were not in the private sector

The blue bit,
With the exception of the being shot at, a slant I find dificult to stomach today of all days, so please leave it out, do you think that private sector workers are exempy/bypassed by these problems, Jueeess chap it's the same for all of us

The green bit;

Chap, this didn'nt happen and your view of this beggers belief.
Our companies milked us of those returns, something you have been shielded from, ? yeah

MoreOn

cyclonebri1 wrote: »

I'd like to say that your input is valued :T
but I have a few issues

The red bit, thats the way it affects us all, hence the real issue


The blue bit,
With the exception of the being shot at, a slant I find dificult to stomach today of all days, so please leave it out, do you think that private sector workers are exempy/bypassed by these problems, Jueeess chap it's the same for all of us

The green bit;

Chap, this didn'nt happen and your view of this beggers belief.
Our companies milked us of those returns, something you have been shielded from, ? yeah

Red bit: So they shouldn't have taken out a pension and just received a low income.? You're statement is rediculous...

Blue bit: Why the public sector? is it really about some areas of the public sector which the government has failed to discuss and many in the private sector who have enriched and gauged themselves... no it's not the same for all... you fail to compare..

Pale Green Some companies milked some of the private sector, is rather different from a whole sector being milked..

At the end of it Paulm is right, informed choice should be the way.. As it is the governments self imposed changes with some arbatory classification date is a spurious offer designed to split the ranks with an "im now alright jack mentality" ....

Backbiter

There is a painful amount of misinformation surrounding this dispute, and much of it is reflected in this thread. To take an example:

You are utterly and catastrophically wrong about both the value of your pension and the amount you would have to put into it if you were in a private sector defined contribution scheme and wanted the same benefits. On the new deal being offered you have something that most private sector workers would snap your hand off to get. It really genuinely isn't possible to generate the benefits you get from your contributions without someone else contributing massive subsidies, and that someone is the private sector.

This is what frustrates me about the level of this debate and the way the unions have lied to their members about the sustainability of the scheme and who pays for it. It's pure fantasy to claim that the scheme would have been sustainable had the government not appropriated contributions: if that were true all defined benefit schemes would be sustainable. They're not.

That may be true about some public sector schemes. In fact, it is undeniably so for the armed forces, for example, as theirs is a non-contributory scheme. So is this Government planning to 'reform' it so that it becomes sustainable? Obviously not.

This Government has lied about the issues, as the transcript (quoted earlier in the thread) of Francis Maude's interview on Radio 4 makes clear. Another Government spokesman lied on Question Time, claiming that Hutton's graphs (showing a projected fall in the cost of public sector pensions over the coming decades, as a share of GDP, from 1.9% to 1.4%) were based on the proposed changes. In fact, they were based on changes made in 2007, which did make the schemes more affordable.

The media coverage frequently highlights the discrepancy between public and private pensions, but seems to ignore the vast gulf in contributions. As has been pointed out above, a teacher on £37k pays about £7.5k a year in contributions (over 20%), adding together the employer contribution and their 6.5% salary deduction. At today's rates, those contributions would yield a vast pension pot if invested for some 40 years. And yet many people seem to think teachers pensions mean they get something for nothing. It's just not true. The average private sector employee does not put anything like as much into a pension scheme, and this alone would account for the huge 'pension divide.' Two thirds of private sector employees do not put anything at all into their pension, according to this article:
http://www.telegraph.co.uk/finance/personalfinance/pensions/8673672/Millions-face-pension-poverty-as-golden-era-ends.html
And it is worth pointing out that it costs the Government £39 billion a year in tax relief to subsidise pensions, most going to private pension contributions, and it goes disproportionately to the wealthiest 10%.

In reality, there is no investment of these teachers' contributions. There is no pension pot, as it is a scheme in which the contributions pay the pensions of those in retirement. The Teachers Unions have been repeatedly asking the Government to carry out a valuation - as they are legally required to do - to see if the scheme is viable. Agreement was reached in 2007 that, if the valuation showed that it wasn't affordable, teachers would have to contribute more than 6.5%. This Government has refused to carry out this valuation, and the unions have mounted a legal challenge to try and force them to do so.

Why is the Government refusing to carry out this valuation? If it is so sure of its figures, what is it hiding from, when there is an agreement from the unions that contributions will go up if necessary?

Backbiter

Backbiter wrote: »

The media coverage frequently highlights the discrepancy between public and private pensions, but seems to ignore the vast gulf in contributions. As has been pointed out above, a teacher on £37k pays about £7.5k a year in contributions (over 20%), adding together the employer contribution and their 6.5% salary deduction. At today's rates, those contributions would yield a vast pension pot if invested for some 40 years. And yet many people seem to think teachers pensions mean they get something for nothing. It's just not true.

Put them into this pensions calculator and see what comes out:
http://www.hl.co.uk/pensions/interactive-calculators/pension-calculator

Click on 'Today's terms', enter a retirement age of 65, and a current age of 25, and those contributions would give a pension of £26k a year. The Government's 'reforms' would give a pension of around £24000.

Moby

Quote Paulrn

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.

Excellent balanced view IMO!:T

dshart wrote: »

The thing you fail to realise is that if something is not done now about the national debt and balancing the books then this human misery will be 10 times worse when the country goes bankrupt. Why do you think the Euro zone have been pumping money into failing economies frantically trying to prop them up? It is because they realise if any of these countries have a disorderly default on their debts then there will be chaos and the knock on effect within the Euro zone including UK will have far reaching consequences.

What will happen when the country can no longer borrow money to pay wages and pensions and benefits? Money doesn't grow on trees, it has to come from somewhere. I have lived in third world countries and I know what the people there have to put up with where there is no social security system. In those countries they do not talk about unemployment numbers the way we do because if you don't work you don't get any money. There is no talk of minimum wage as people have to take whatever money they can or they starve. Public sector workers in those countries regularly don't have their wages paid and their pensions are a joke. The reason I mention all this is that there is now a real fear that a western nation, Greece, may default and become no better off than a third world nation. This will have a knock on effect and several other nations are likely to follow suit.

No problem with any of this and I did already know it but the question is how you decide who pays the costs ie how you spread the misery! Many of us fear that those who hold the levers of power make the decisions in such a way that their own interests are protected. The system itself needs radical reform....starting with a Robin Hood tax!

I see Francis Maude now says we can have a little strike for 15 mins without losing any pay........another cynical attempt to divide and rule and it just shows where they are coming from....exploiting dissension to weaken resolve....a cynical Govmt lacking principle!

atush

Don't use Pale Green, it is hard to read lol.

The_Angry_Jock

Backbiter wrote: »

a teacher on £37k pays about £7.5k a year in contributions (over 20%), adding together the employer contribution and their 6.5% salary deduction. At today's rates, those contributions would yield a vast pension pot if invested for some 40 years. And yet many people seem to think teachers pensions mean they get something for nothing. It's just not true. The average private sector employee does not put anything like as much into a pension scheme,

In order for me to have 20% pension contributions I'd have to put in 14% of my salary as maximum employer contributions are capped at 6%.

hugheskevi

In order for me to have 20% pension contributions I'd have to put in 14% of my salary as maximum employer contributions are capped at 6%.

Assuming you are in a contracted-in scheme , you would need to add about 3.5% (contracted out employer rebate is 3.7% of a band of earnings) to the employer contribution to compare to a contracted-out public service scheme to adjust for the loss of State Second Pension.

So 20%-6%-3.5%=10.5%

Which is not dissimilar to a lot of proposed public service contribution rates after the planned 3.2% increase.