Public Sector Pension Strikes – A JOKE !

DCodd

dshart wrote: »

I find it amazing that people are using figures of current salary and contributions and plugging those figures into calculators and coming up with figures that give pensions better than they are getting in the public sector schemes and then using this as an argument for things to remain the same.

The fact is people usually start on lower salaries at the start of their career and thus their contributions are lower. Over the years wages generally rise so contributions rise with it, although inflation eats into that a bit. People also get promotions and earn bigger salaries so they contribute more. So you cannot use a salary of say £30000 and work the figures out for 40 years as this in no way approximates reality.

What they also fail to take into account is that if those sums of money were invested in a private pension there are also management charges that eat heavily into profits with the overall effect of reducing returns. So just applying a return of 5% over inflation is wrong.

If the figures were as stated then I am sure you would have seen a push by public sector workers and the unions for the money to be invested in private pensions. The simple fact remains that public sector pensions have been and will still remain good value for money even after the changes and no one giving correct advice would ever advise someone to opt out of a public sector pension.

People are just using £30k as a like for like value, calculating the potential benefits on an all things being equal basis. It is not a pension statement.

Why would Public sector workers and unions push for private pension fund investment? They have a defined benefit pension so investment returns make no difference to them. However it has been argued that contributions should be invested in some way.

CLAPTON

dshart wrote: »

I find it amazing that people are using figures of current salary and contributions and plugging those figures into calculators and coming up with figures that give pensions better than they are getting in the public sector schemes and then using this as an argument for things to remain the same.

The fact is people usually start on lower salaries at the start of their career and thus their contributions are lower. Over the years wages generally rise so contributions rise with it, although inflation eats into that a bit. People also get promotions and earn bigger salaries so they contribute more. So you cannot use a salary of say £30000 and work the figures out for 40 years as this in no way approximates reality.

What they also fail to take into account is that if those sums of money were invested in a private pension there are also management charges that eat heavily into profits with the overall effect of reducing returns. So just applying a return of 5% over inflation is wrong.

If the figures were as stated then I am sure you would have seen a push by public sector workers and the unions for the money to be invested in private pensions. The simple fact remains that public sector pensions have been and will still remain good value for money even after the changes and no one giving correct advice would ever advise someone to opt out of a public sector pension.

increasingly public sector pensions are/will be based on career average so such comparisions are quite reasonable

dshart

DCodd wrote: »

People are just using £30k as a like for like value, calculating the potential benefits on an all things being equal basis. It is not a pension statement.

Why would Public sector workers and unions push for private pension fund investment? They have a defined benefit pension so investment returns make no difference to them. However it has been argued that contributions should be invested in some way.

Well people were using the figures to produce pension pots over £600k and using the annuity that could be obtained with said pension pot to compare with their current scheme and point out how worse off they were in the public sector scheme. Hence the comment about, if that was the case then they would be pushing for private pensions.

dshart

CLAPTON wrote: »

increasingly public sector pensions are/will be based on career average so such comparisions are quite reasonable

Career average schemes have nothing to do with what I was talking about. I was pointing out that the figures that they were using to build notional pension pots to compare with private pensions are wrong. How many people even including employers contributions are contributing £7.5k per anum to a pension at the start of their working life? They would need to be earning £37k and have a total of 20% employer and employee contributions to have that much going into their pension.

CLAPTON

dshart wrote: »

Well people were using the figures to produce pension pots over £600k and using the annuity that could be obtained with said pension pot to compare with their current scheme and point out how worse off they were in the public sector scheme. Hence the comment about, if that was the case then they would be pushing for private pensions.

The point here is whether the combined contributions of 6% plus 14% employer contribution is grossly underfunding of public schemes ie.. the total 'unaffordably' argument.

what I'm trying to show that if indeed these monies had really been invested then the pensions provided would give or take 25%, then they would be broadly in line with commercial pension.

Obviously there are other benefits i.e certainty rather than the vagaries of the stock market.
However with the constant government meddling this may well be less of a benefit.
Also of course as mentioned several times, the government has a statuary duty to publish figures for the notional values of the pension funds, that it refuses repeated to actually publish
Why would that be ?

CLAPTON

dshart wrote: »

Career average schemes have nothing to do with what I was talking about. I was pointing out that the figures that they were using to build notional pension pots to compare with private pensions are wrong. How many people even including employers contributions are contributing £7.5k per anum to a pension at the start of their working life? They would need to be earning £37k and have a total of 20% employer and employee contributions to have that much going into their pension.

The final salary scheme was based on final salary.
So indeed it was true that one got the fulls 40 years benefit at the final high salary but paid a lot of contributions at the low early years salary.
However when career average comes in that is now taken into account and the pension for the high flyers will now be less.. in line with normal funded schemes

dshart

CLAPTON wrote: »

The point here is whether the combined contributions of 6% plus 14% employer contribution is grossly underfunding of public schemes ie.. the total 'unaffordably' argument.

what I'm trying to show that if indeed these monies had really been invested then the pensions provided would give or take 25%, then they would be broadly in line with commercial pension.

Obviously there are other benefits i.e certainty rather than the vagaries of the stock market.
However with the constant government meddling this may well be less of a benefit.
Also of course as mentioned several times, the government has a statuary duty to publish figures for the notional values of the pension funds, that it refuses repeated to actually publish
Why would that be ?

Well the simple way to see if your pension is funded or underfunded in comparison to a private pension would be to calculate what your actual contributions would have been over the course of 40 years based on wages over the period and then work out what sort of pension pot that would have built up. I can assure you it would not give you a pension anywhere near what is offerred in the public sector scheme. This is even without considering that the 14% employers contribution is a lot more generous than most private sector employer contributions.

Just the fact that they are using the final salary to calculate contributions over 40 years and using that to compare with private pension, should in itself indicate how beneficial the public sector final salary schemes are and why at a minimum it should change to career average.

Koicarp

pauletruth wrote: »

you have missed the two year pay freeze so equal to roughly a 10% cut.
it would be very nice to see a 2 % above inflation rise.

your band five staff nurse will now start with a student loan now that they have played about with the nhs bursary.
so the student nurse gives roughly 75 weeks of unpaid work and is now expected to live on less and pay most of it back.

the wife being old time finished with a hnd and had to pay for her own degree. she is now faced with another two years study to become a district nurse so at the end of her training she will have a masters degree but unless they open up posts then she will be stuck on 25k . for 7 years study.

you want and need highly trained and motivated staff keep treating them like dirt and you will one day regret it.

so if you were a 18 year old and wanted to choose a career whatr would you choose a job that will hurt you. ask and look at a nurse nearing retirement and most will have work related injuries. the often are the victims of assults the wife twice in the last year.

you are required to undertake regular training which is now not planned in the off duty so has to be done in their own time. you don't get payed for overtime which is nearly every day. the wife works 12hour shifts plus nights. they often don't get there meal breaks because they are too busy.

and now they want to make them work another 8 years pay a lot more and get less back in pensions.

when someone leaves they are never replaced. yet there aways seems to be money for stupid ideas and of course more managers.
tell me would you not be a little annoyed.

The nhs is not safe in there hands in fact they are very close to killing it off. and you wonder why lots of staff nurses are leaving to go abroad or even into tesco. less stress and after all the deductions not much diffrence in pay.

I didn't miss any pay freeze- I used the starting rate from 2004 and the starting rate from 2011- so it takes the pay freeze into account. Some on here may benefit from a lecture on nursing, but I'm not one of them.

CLAPTON

dshart wrote: »

Well the simple way to see if your pension is funded or underfunded in comparison to a private pension would be to calculate what your actual contributions would have been over the course of 40 years based on wages over the period and then work out what sort of pension pot that would have built up. I can assure you it would not give you a pension anywhere near what is offerred in the public sector scheme. This is even without considering that the 14% employers contribution is a lot more generous than most private sector employer contributions.

Just the fact that they are using the final salary to calculate contributions over 40 years and using that to compare with private pension, should in itself indicate how beneficial the public sector final salary schemes are and why at a minimum it should change to career average.

do you know what a career average salary scheme is?

dshart

CLAPTON wrote: »

do you know what a career average salary scheme is?

yes I know what one is.