Teacher and public sector pension

DCodd

CannySaver wrote: »

They do from a pension perspective

Really? many private schools offer pension contributions at 15%, I believe public sector teachers get 14%?

CannySaver_2

DCodd wrote: »

Really? many private schools offer pension contributions at 15%, I believe public sector teachers get 14%?

I can't really comment on the difference between public and private schools, although I don't think I would be moaning too much if I only got an employer contribution of 14%! However what I do know is that teachers in the public sector get:

1. guaranteed pensions
2. with no investment risk
3. the pensions rise each year in payment (yes, I know it will be in line with CPI and not RPI)
4. lump sum death benefits
5. widows pensions

Most people working in the private sector (in jobs other than teaching) would love to be in such a scheme.

As we all know private sector pensions have suffered significantly from the economic downturn in recent years, many schemes have switched from FS / DB to DC, annuity rates are at all time lows and the final pension is based on investment performance.

Most people I know believe that teacher's pensions are superior to those of the majority of workers in the private sector.

The Canny Saver

lindsaygalaxy

It's not just about the pensions or only effect teachers. No teacher works 9-5 or a 40 hour week - its much much more! The job takes over your life and you never get a proper break from it. Everything you do has to fit around term time, and holidays have to be at the most expensive times. The figures the papers keep giving out are not a fair comparison as they are based on you working 8 more years. Parents want the best education for their children, but they are happy to let a 68 year old do that teaching! Really?!?! It is an exhausting job, as is nursing, fireman etc and the pay does not match the time, effort or stress.

DCodd

CannySaver wrote: »

I can't really comment on the difference between public and private schools, although I don't think I would be moaning too much if I only got an employer contribution of 14%! However what I do know is that teachers in the public sector get:

1. guaranteed pensions
2. with no investment risk
3. the pensions rise each year in payment (yes, I know it will be in line with CPI and not RPI)
4. lump sum death benefits
5. widows pensions

Most people working in the private sector (in jobs other than teaching) would love to be in such a scheme.

As we all know private sector pensions have suffered significantly from the economic downturn in recent years, many schemes have switched from FS / DB to DC, annuity rates are at all time lows and the final pension is based on investment performance.

Most people I know believe that teacher's pensions are superior to those of the majority of workers in the private sector.

The Canny Saver

This is all true but as I said on the other "strike" thread, it is all well and good making comparisons but they have to be equal and fair comparisons.

When the private pensions were returning 10% yearly, were there any call from private sector workers for the public sector to benefit from their gains?

Old_Slaphead

DCodd wrote: »

Really? many private schools offer pension contributions at 15%, I believe public sector teachers get 14%?

The 14% is only a notional amount that comes out of the education budget. If there is any further shortfall that too is covered by the taxpayer.

There is absolutely no way that the total cost of providing FS schemes to teachers is 20.5% (ie employees and notional employers contributions) - it's more than that.

Old_Slaphead

DCodd wrote: »

When the private pensions were returning 10% yearly, were there any call from private sector workers for the public sector to benefit from their gains?

Those years have long gone - and there weren't too many of them either.

Anyway the public sector DID benefit - better returns required lower employer funding which in turn generated more taxable profit for the Treasury to spend on the public sector!!


Returns over the past 10 years have averaged just 4% pa - not much reward for all the risk, stress etc.

Private sector funds have, unlike the public sector, to be stretched to accomodate increasing longevity - so even the meagre returns have been further dissipated.

atush

DCodd wrote: »

This is all true but as I said on the other "strike" thread, it is all well and good making comparisons but they have to be equal and fair comparisons.

When the private pensions were returning 10% yearly, were there any call from private sector workers for the public sector to benefit from their gains?

Yes, back then and even now public service pensions (ie the pot of money the govt spends on it) has benefitted from private pensions.

Mainly by the tax on divends paid to pensions, and also by the increased income that is taxed when pensions were doing rather better than just now.

DCodd

Old_Slaphead wrote: »

The 14% is only a notional amount that comes out of the education budget. If there is any further shortfall that too is covered by the taxpayer.

There is absolutely no way that the total cost of providing FS schemes to teachers is 20.5% (ie employees and notional employers contributions) - it's more than that.

Yes it is more than that but so is the pay in the private sector equivalent. There is a balance here.

Yes it is generous but the package has to at least match the private sector packages and despite these "fabulous pensions" very many teachers are leaving for the private sector schools or leaving the profession completely.

Old_Slaphead wrote: »

Those years have long gone - and there weren't too many of them either.

Anyway the public sector DID benefit - better returns required lower employer funding which in turn generated more taxable profit for the Treasury to spend on the public sector!!


Returns over the past 10 years have averaged just 4% pa - not much reward for all the risk, stress etc.

Private sector funds have, unlike the public sector, to be stretched to accomodate increasing longevity - so even the meagre returns have been further dissipated.

But this just highlights that the private sector worker and the private sector company are "lazy" when it comes to pension provision.

I saw an article a few years ago (I think it was from the OECD) that calculated the average return on private pension funds fron the early 80's to 2005. It suggested that the average return in the UK private pension funds was 10.1% over that 10 - 15 year period. Personaly, I don't believe it but it does show how headline figures are so very misleading.

DCodd

atush wrote: »

Yes, back then and even now public service pensions (ie the pot of money the govt spends on it) has benefitted from private pensions.

Mainly by the tax on divends paid to pensions, and also by the increased income that is taxed when pensions were doing rather better than just now.

By that token, the public pensions benefit the private pensions as those pensioners are spending in the economy, thus creating better profits for the companies that they spend with and providing better returns for the private pension funds that have invested in them.

The_Angry_Jock

lindsaygalaxy wrote: »

No teacher works 9-5 or a 40 hour week - its much much more!.

Just like much of the population working in the private sector.

lindsaygalaxy wrote: »

The job takes over your life and you never get a proper break from it. Everything you do has to fit around term time, and holidays have to be at the most expensive times.

Funnily enough, that's also the time families have to take their holidays, it's just as expensive for them. Except most working parents only get 4 weeks + bank holidays a year to cover 10 weeks + bank holidays + inservice days.

lindsaygalaxy wrote: »

The figures the papers keep giving out are not a fair comparison as they are based on you working 8 more years. Parents want the best education for their children, but they are happy to let a 68 year old do that teaching! Really?!?! It is an exhausting job, as is nursing, fireman etc and the pay does not match the time, effort or stress.

And people who don't work in these sectors should work til they drop because their jobs are far easier? 68 year olds cannot be teachers...surely that's ageism?