Public Sector Pension Strikes – A JOKE !

Backbiter

Stargazer57 wrote: »

M

A figure has been written down for contributions each year, but it could have been twice as much and the present economic result would have been the same and the NUT could then claim the "surplus" was several times as large.

Alternatively contributions could have been set to exactly equal to the benefits each year. Then the NUT would have to say there is now no surplus, but all past tax bills would have been exactly the same.

I take your point, but it is stretching it a bit to say no contributions have been paid. I know £247 goes out of my pay packet each month, but equally it's true it doesn't go into a pot as such, it simply gets paid out to existing retired teachers. I accept that the 14.1% employer contribution doesn't actually get paid either (but is also used to pay teachers' pensions) but it IS part of teachers' total 'remuneration', which they won't see until they retire.

A (theoretical) figure of £7.5k a year goes into my theoretical pension pot. Based on current average 5% returns, that would over 40 years give a retirement fund more than enough to pay the pension under current arrangements (a 1/80ths final salary scheme for most current teachers, but changed to new entrants in 2007). In reality, it isn't a scheme that depends on growth, as it merely needs to cover the pensions of those in retirement, as - according to the NUT figures - it always has done.

The revised scheme being proposed would cost teachers £100+ a month more (for 8 years' longer service), and would result in a hugely devalued (theoretical) pension pot, even without the RPI>CPI change, which will lower pensions by some 15%.

Moby

howee wrote: »

Yes your right very narrow, what I do know is if I worked in a job and my colleagues decided to strike and I didn't agree with it I would not strike.

Does this new legislation commit all workers to do what the ballot union says then lol. No need for the scab term then.

Maybe a ballot to see if any who voted for action were in favor of taking their heads out of the sand would be appropriate?

I so wish I was young or daft enough to listen to unions and take in the carp they throw out.

Alas I live in the real world.

I take that to mean the real world of the 19th century:rotfl:

cyclonebri1

michelle1506 wrote: »

I think that all the people on this forum who consistently slag off public sector workers are a joke...

Then the essence of this and similar threads has gone way over your head.,

It's nothing at all to do with the value or calibre of a public v private sector worker, it's quite simply the attitude to change and realising that we all have to live within our means or maybe you feel it's only the private sector worker that got us into this mess?

Stargazer57

Backbiter wrote: »

I take your point

Thank you

Backbiter wrote: »

A (theoretical) figure of £7.5k a year goes into my theoretical pension pot. Based on current average 5% returns, that would over 40 years give a retirement fund more than enough to pay the pension under current arrangements (a 1/80ths final salary scheme for most current teachers, but changed to new entrants in 2007). In reality, it isn't a scheme that depends on growth, as it merely needs to cover the pensions of those in retirement, as - according to the NUT figures - it always has done.

You have put your figure on the most important factor in this dispute. You can't earn 5% above inflation on an investment guaranteed by the the Government. In fact you never been able to. Such returns peaked at just over 4% in the 1980s. However they have since fallen sharply and this is the factor that the private sector, which has the tiresome obligation of needing to demonstrate that its pension promises are affordable, has had to adjust to. Since 1998 the rates of return, that you slickly refer to as a "current average 5%" have never been above 2%. In recent years they have fallen below 1% and now hover somewhere around 0.5%. If you look at the contributions that are required on that basis you will see why even the new pension package you are being offered is a bargain for the members and a ripoff for the taxpayer.

You might be able to earn higher returns by taken a punt on investments not guaranteed by the Government, but I haven't heard any of the unions suggest they are wanting to give up that guarantee.

Old_Slaphead

Yorkie1 wrote: »

Wish Francis Maude would make his mind up what his message is.

Earlier today: "Don't strike, come back to the negotiating table, a further compromise is almost there"

Now on the news: "This is as good as it gets, don't strike".

Either there is scope for further negotiations, or there isn't.

I thought negotiations were a 2 way thing.

What's the Unions opening position & what have they so far offered as a concession ?

In my opinion what the government have currently offered is far too generous and I can't see any way they can make the terms offered stick for 25 years.

Old_Slaphead

Backbiter wrote: »

The revised scheme being proposed would cost teachers £100+ a month more (for 8 years' longer service), and would result in a hugely devalued (theoretical) pension pot, even without the RPI>CPI change, which will lower pensions by some 15%.

Would you explain that 15% figure?

Based on current average 5% returns

Please tell me where I can get consistent returns of 5% above inflation. Even if/when I can simply match inflation, long term interest rates have decimated my pension (thanks mainly to QE). Seems I'm paying much more for the banking/public spending mess than public sector pensioners and I definitely didn't cause it!

DCodd

The_Angry_Jock wrote: »

Percentage-wise I'm struggling to find information, from memory a year ago the figure was roughly 0.6% of public sector and 0.4% of private...but as I say I'm struggling to find that document. This I beleive is because of the ratio of highly paid (and highly skilled) jobs such as GPs, surgeons and head teachers.

The problem with these figures is what you consider to be public sector employees aren't necessarily what are included within the "public sector figures".

RBS plc, Lloyds Banking Group plc, Northern Rock and all the privately funded 6th form colleges are now "Public sector".

The headline figure of pay comparisions include the pensions provisions from both sides i.e. the figure includes the defined salary pension liability.

Data manipulation comes to mind.

Tammer

Here's an article called "Eight Myths about Public Sector pensions". Might be worth a read here...

http://www.scottishlife.co.uk/scotlife/web/site/Adviser/TechnicalCentralArea/Blog/Posts/20111018EightMyths.asp

Zelazny

I go away for two days and this goes from a 3 page thread to a 10 page monster :-)

Backbiter wrote: »

Teacher on 30k pays 3k into a scheme, with an additional 14% employer contribution paid, making 6.2k in total, over 46 years until new retirement age of 68.
Put those figures into a pensions calculator, adjusted for inflation, allowing for spouse's benefit.
http://www.aviva-pensioncalculator.co.uk/
It gives a pension of 112% of the salary, or over £33000 a year. Compared to the 'very good deal' of £20k.
Is it really so strange why so many public sector workers are striking?


Presumably Aviva plan to make some profit out of those contributions, whereas the present teachers' scheme is a non-profit scheme, far cheaper to administer.

That calculator doesn't detail assumptions, and looking at the numbers they have to be assuming something funny. Putting £6.2k into the scheme each year for 46 years is a total of 285k. Adding investment returns at 5% over inflation gives ~£1m. The calculator gave a total of over £7m, which would require investment returns of ~11% more than inflation per year.

What's more likely is that they're assuming 11% and not taking inflation into account, which makes the results rather meaningless.

Whether or not you should include Employers contributions when calculating benefits is another question. Do you have the option to instead take that amount as pay? No. 14% is a heck of a lot, and could be considered part of the problem - the private sector workers don't want to pay for this sort of thing, when they're lucky to get 5% from their employer.

I'd also take issue with your statement that a not-for-profit is cheaper to administer than a for-profit. If the not-for-profit has all the money it can justify, then there's no reason to ever try to cut costs, or bring expenditure down. A for-profit has to reduce costs as much as it can so it can be more profitable, so in this case, I could easily see a for-profit as offering a better deal than a not-for-profit.

Zelazny

Lady_Aga wrote: »

Can anyone do the sums for a more average civil servant than the previous calculations?

Salary = £18,500
Years in post = 20
Contributions by employee = 1.5%

Thanks

All depends when you retire. For the time that you're in the scheme, conts of 1.5% are fairly small. With investment returns of 5% over inflation, you'll have a fund of a little over £9k when you leave. If you immediately retire (at age 65 or so) then you'd be looking at a pension of ~£350 (with attaching spouse's benefit and increases in line with inflation).

If instead you worked 20 years from age 20 to age 40, then kept the fund for another 25 years (and it continued to benefit from investment returns at 5% over inflation), you'd have a total fund of around £31k, and that would provide a pension of £1,200 per year, or thereabouts.