Public Sector Pension Strikes – A JOKE !

Moby

The_Angry_Jock wrote: »

Only a small percentage of jobs can be considered critical, the country isn't going to grind to a halt on Wednesday. Why should you be singled out for better treatment than any other hard working individual? Absolutely selfish.

Why am I being selfish. I am trying to protect my pension rights. The ones I signed up to when I started employment. Also don't forget 1 million of us are women who are earning less than 15k a year. Its tendentious to see us as 'selfish'. The median public sector pension is £5600 a year!

I get 0% of my income "cash in hand" same as most of the poplulation. I'm also certain that there are some in the public sector who would happily do homers for an extra bit of tax free cash.

Utter tosh....don't know about you personally of course... but everyone knows there is a huge 'cash in hand' 'undelared earnings' black economy in this country.


Quote Sargazer:-

Good thing Labour didn't get in then. They were going to cut public spending as well, but without the ring fencing that the Tories have applied to health. So if Labour had won NHS spending would already have been cut.

Completely naive!

Stargazer57

Backbiter wrote: »

They did. Well, they valued the Teachers' Scheme and there is a requirement to value the other schemes, too. It's available here:
http://www.teacherspensions.co.uk/resources/pdf/TPS%20-%20financial%20note%20July%202007.pdf

The discovery of an approximate £3bn shortfall led to the changes in 2007, which upped the retirement age to 65 for new entrants and increased contributions for teachers. This was not an ANNUAL shortfall, but the difference between projected pension payments for teachers in the scheme (currently aropund 650,000) and projected contributions over the coming decades: £163bn coming in, £166 bn being paid out. The average teacher pay is around £35,000, of which 20.6% goes into the pension (6.5% teacher, 14.1% employer). So with an average of £7.5k going in from 650,000 teachers annually, the scheme is worth quite a bit - around £5billion a year, so the last valuation foresaw a £3bn shortfall over the next 35 years. The annual shortfall was £85million - not far off what Real Madrid paid for Ronaldo. Between 650,000 teachers, it took a combination of later retirements for new entrants and extra contributions for current teachers. Per head, the increase needed was £130 per year, or just under £11 a month.

Sounds great doesn't it. But the all important bit is in italics below:

The value of the assets (estimated future contributions together with the proceeds from the notional investments held at the valuation date) was £163,240 millions. The assumed real rate of return is 3.5% in excess of prices and 2% in excess of earnings. The rate of real earnings growth is assumed to be 1.5%. The assumed gross rate of return is 6.5%.

The assets are only adequate if you assume a fantasy investment return of 3.5% in excess of RPI. You haven't been able to earn this on a Government guaranteed investment since the middle of 1997. The current rate you would expect to earn, looking forward, is around 0.5%.

Hutton does reproduce calculations done by the PPI but even they understate the market cost of the benefits because they assume the return on corporate bonds can be earned on a government backed investment.

Backbiter wrote: »

The NUT contends there has been overpayment into the scheme of £48bn, which would more than make up for any temporary shortfall, but the Unions are not demanding this back.

This is another fantasy figure based on notional contributions to a notional fund in a notional world where all excess is returned to the employer. I'd be more than happy for it to repaid in notional pounds complete with notional interest.

If I, as a private saver, set out to replicate the benefits provided by a public sector pension scheme the amount I would need to save would be dictated by the returns available on government-backed investments in the market. This amount would far exceed any amount allocated to public sector pensions in their fantasy accounts, so the idea that there is a surplus in any public sector scheme is laughable.

The_Angry_Jock

Moby wrote: »

Why am I being selfish.

Moby wrote: »

above only confirms how critical the services we provide are and that we deserve better than to be treated in this way!

Because it comes across that you have an attitude of superiority and that you should be rewarded regardless of the countries (or individuals) financies because you provide a "public service". At the end of the day, you do a job just like most everyone else and most everyone else is trying to be on your side (even when they're struggling) but that's not good enough.

Moby wrote: »

Utter tosh....don't know about you personally of course... but everyone knows there is a huge 'cash in hand' 'undelared earnings' black economy in this country.

That's right, you don't my my personal situation or nearly anyone elses. If you can provide any sort of facts to back up you outrageous statement that everyone in the private sector is at it I'd be fairly impressed.

The_Angry_Jock

Moby wrote: »

Also don't forget 1 million of us are women who are earning less than 15k a year.!

I thought they weren't to be affected by increased contributions?

Moby wrote: »

The median public sector pension is £5600 a year!

Surely this figure is only meaningful if you supply a corresponding term of service and salary?

J_i_m

Koicarp wrote: »

Have I missed it J I M or have you not yet told us which union you are in?

howee wrote: »

Last time J i M mentioned working on Wednesday he was called a scab. How nice of his fellow workers to believe and think like this.

Indeed, it would seem it really doesn't matter what I do to be honest. As a public sector sector worker some will always see me as a leech to society convinced they pay for everything from my pension to the socks on my feet. If i strike then I'm seen as selfishly greedy...if I don't strike I'm labeled as a selfish greedy scab and then laughably I'm invited to take my head out of the sand and join the real world.

I suppose I should satisfy the right honourable Koicarp by stating which union I'm member of (for all the good it'll do). I'm with unison. The very same unison who inundate you with emails telling you to strike yet fail to send you a ballot paper. I joined a union on the advice of my manager approximately 9 months ago, and this had nothing to do with pensions. If you must know the unit I work at has been forced to undergo significant cuts and to significantly reduce it's number of staff. Therefore I perceived my job to be under threat. So much for the superduper job security you private folk insist we enjoy.

Ygor

Stargazer57 wrote: »

If I, as a private saver, set out to replicate the benefits provided by a public sector pension scheme the amount I would need to save would be dictated by the returns available on government-backed investments in the market. This amount would far exceed any amount allocated to public sector pensions in their fantasy accounts, so the idea that there is a surplus in any public sector scheme is laughable.

This takes the approach that the current yield would be payable on the entire fund.

Not only would the yield of past investments (including those pre-97) countinue to be paid out, but the increase in bond prices (which result in lower yields now) would increase the value of the fund.

If you set out today to set up a DB fund you would need to pay larger contributions than an established fund. Is it surprising the majority of active members of private sector db schemes belong to older schemes?

56 per cent of active
members of open DB schemes in the 2009 OPSS were in
schemes founded before 1980. It is interesting to observe that
29 per cent of active members of open DB schemes were in
schemes that were founded in 2000 and after, although some
of these new schemes may have been replacements for existing
schemes. Further analysis of the data shows that most of these

new schemes were founded between 2000 and 2004.
- Pension Trends Chapter 6

If you invested solely in Gilts, you'd have to pay larger contributions. The implication here being Teachers, NHS and civil servants should have to make larger contributions than an equivalent private sector or Local Government scheme as they are denied an open market.

dshart

real1314 wrote: »

Now, bear in mind that I'm responding just to the points you raised here. I suspect you haven't reviewed every post I've made either, so I won't make facile points againstsomething I posted on this thread a week or so ago. :cool:

As has been argued in this and several other threads there is a deficit in private sector pensions. This was published in Huttons report. There are arguments that some of the schemes are fully funded based on some notional investment and returns but the figures used for these are usually skewed to fit the argument.

In your responses you resorted to the quite frankly childish comment that if I wanted those benefits I should have joined the public sector rather than stick to the facts of the argument.

My complaint about public sector pension is not that they are better than private sector ones, but that they cost the taxpayer more as they require additional funding. If they get rid of the additional funding requirement I dont care if they are better than mine.

Your link between the public and private sector pension is wrong. Yes to an extent people may be drawn to better conditions but for a start the jobs are not there for everyone. The private sector used to have numerous DB schemes but these have been closing in droves as they become unaffordable, yet the public sector still maintain their DB schemes. By your argument there should be a rush of people to the public sector but this is not the case. The reality is that the government like many private companies has realised that the future liabilities of the DB schemes are unaffordable and they have to start making changes now.

People keep kidding themselves that it is about us and them, when in fact it is about the country's finances. Read the article I posted a couple of pages back about the Greek austerity measures and you will see the sort of hardship we all will face if this or any future government of the country does not get a hold of the rising debt.

Stargazer57

Ygor wrote: »

If you invested solely in Gilts, you'd have to pay larger contributions. The implication here being Teachers, NHS and civil servants should have to make larger contributions than an equivalent private sector or Local Government scheme as they are denied an open market.

The bond market does seem to differentiate between a sovereign guarantee and one from a corporate, so you would expect a government backed pension to be more valuable, and therefore costly, especially as the duration of the promise is so long. If the financial services industry has learnt one thing over the last twenty years it is that guarantees cost money.
Of course it would always be possible for the Unions to negotiate to give up the guarantee, but they have no incentive to do this when such deep pockets are provided at no cost at all.
You don't get many strikes in the private sector!

POPPYOSCAR

dshart wrote: »

As has been argued in this and several other threads there is a deficit in private sector pensions. This was published in Huttons report. There are arguments that some of the schemes are fully funded based on some notional investment and returns but the figures used for these are usually skewed to fit the argument.

In your responses you resorted to the quite frankly childish comment that if I wanted those benefits I should have joined the public sector rather than stick to the facts of the argument.

My complaint about public sector pension is not that they are better than private sector ones, but that they cost the taxpayer more as they require additional funding. If they get rid of the additional funding requirement I dont care if they are better than mine.

Your link between the public and private sector pension is wrong. Yes to an extent people may be drawn to better conditions but for a start the jobs are not there for everyone. The private sector used to have numerous DB schemes but these have been closing in droves as they become unaffordable, yet the public sector still maintain their DB schemes. By your argument there should be a rush of people to the public sector but this is not the case. The reality is that the government like many private companies has realised that the future liabilities of the DB schemes are unaffordable and they have to start making changes now.

People keep kidding themselves that it is about us and them, when in fact it is about the country's finances. Read the article I posted a couple of pages back about the Greek austerity measures and you will see the sort of hardship we all will face if this or any future government of the country does not get a hold of the rising debt.

Yes, this is something I just don't get about these strikes. The money has to come from some where.We can't go on spending what we can't afford, we will end up bankrupt and many more will lose their jobs.

Ygor

Stargazer57 wrote: »

The bond market does seem to differentiate between a sovereign guarantee and one from a corporate, so you would expect a government backed pension to be more valuable, and therefore costly, especially as the duration of the promise is so long. If the financial services industry has learnt one thing over the last twenty years it is that guarantees cost money.
Of course it would always be possible for the Unions to negotiate to give up the guarantee, but they have no incentive to do this when such deep pockets are provided at no cost at all.
You don't get many strikes in the private sector!

This extra value is only provided by an open market. This doesn't exist for unfunded pensions as they can't invest in corporate bonds.

Actually purchasing corporate bonds would deprive the Treasury of £17.7bn a year. So expect taxes to go up in the short term.