Good luck to state workers picketing today

ruggedtoast

dunstonh wrote: »

I'm sorry but that is union !!!!!!!!e.

The £4000 average includes all those that spent two years working for the public sector. It does not reflect one person spending a life career in the public service. Quoting an average pension is just unethical and pathetic. It would be like the private sector quoting the average value of a personal pension (which is £19000 btw and would provide £570 a year on same basis as public sector) as a way of showing private sector gets less. The fact the person may have only been in the scheme 5 minutes or may have multiple schemes is ignored.

How it needs to be viewed is as follows:

An public sector worker earning £40k a year on a 6% contributory scheme doing their 40 years would get £20k a year pension income. A cost of around £200pm. A private sector worker using a personal pension on same basis would need to pay around £403 a month to get the same income and still would be taking investment risk. To get it closer to guaranteed, the contribution would need to be £818pm four times more than a public sector worker.

Someone working for two years on a £20k salary will get a pension of at most £500, not £4000.

I don't know if I can really be bothered to check the rest of your maths after that early clanger, I hope you're not an Independent Financial Adviser or anything. Oh.

Anyway, to paraphrase your rant, if some people in the private sector have a bad pension provision, everyone in then public sector has to have one too.

Nothing based on affordability, overall salary, the job they do, length of commitment, or God forbid raising pension standards for everybody.

No.

Great. Good work.

Mallotum_X

ruggedtoast wrote: »

Someone working for two years on a £20k salary will get a pension of at most £500, not £4000.

I don't know if I can really be bothered to check the rest of your maths after that early clanger, I hope you're not an Independent Financial Adviser or anything. Oh.

Well done on not understanding averages...

The point is the £500 will be included in the average to get £4,000. Thus the £4k figure is flawed.

Looks like Maths isnt really your strong point after all..

pwllbwdr

Unless I'm very much mistaken, rugged, you've utterly failed to understand the point dunston was making. I'll leave the corrections to him.

ruggedtoast wrote: »

or God forbid raising pension standards for everybody.

Now that would be lovely. Unfortunately the country doesn't have enough money to provide everyone even with the sort of pensions the public sector are now being offered, let alone the ones they're striking to try to keep.

ruggedtoast

Someone contributing for 20 years at an end salary of £20k will finish with a pension of around £5000 per year.

The number of people entering pension schemes in their last two years of employment are not great.

Additionally not everyone can afford to contribute at all, the proposed rises will push the contribution out of reach for many workers.

dunstonh

Someone working for two years on a £20k salary will get a pension of at most £500, not £4000.

Correct. And someone working 40 years will not get £4000 either. Yet that is how the Unions present it.

I don't know if I can really be bothered to check the rest of your maths after that early clanger, I hope you're not an Independent Financial Adviser or anything. Oh.

Would you like to google "average" or would you like it explained to you in the same way they teach 10 year olds?

Anyway, to paraphrase your rant, if some people in the private sector have a bad pension provision, everyone in then public sector has to have one too.

Bottom line is that is the reality. Or at least is that the public sector has to share some of the pain. The other option is to keep having the private sector pay more for public sector when they already have problems paying their own. Its not about finding a solution where people keep getting more and more and more. Its about finding a solution that is fair for everyone even though that means everyone is taking their share of the pain.

Nothing based on affordability, overall salary, the job they do, length of commitment, or God forbid raising pension standards for everybody.

You have to forget raising of living standards. That has gone for a while now. We are back to 70s style economics. You wait until interest rates go back up and those mortgages are back to being 3 times more than they are now. That is when the a future phase of problems start.

grizzly1911

dunstonh wrote: »

How it needs to be viewed is as follows:

A public sector worker earning £40k a year on a 6% contributory scheme doing their 40 years would get £20k a year pension income. A cost of around £200pm. A private sector worker using a personal pension on same basis would need to pay around £403 a month to get the same income and still would be taking investment risk. To get it closer to guaranteed, the contribution would need to be £818pm. Four times more than a public sector worker.

Any chance you can share the assumed growth rates and annuity rates with us?

Take it this a personal pension as opposed to being in an employer "part" funded scheme. So you are not comparing like with like.

The growth rates used 25 years ago would no doubt have been higher. They certainly were when I was given projections.

I don't dispute that the public sector scheme is well funded and not in line with that being experienced in the private sector now.

However, there are many nice personal sector pensions too that don't necessarily reflect the value of the recipient.

Perhaps if we squeeze from both sides it might make it more palatable.

dunstonh

Any chance you can share the assumed growth rates and annuity rates with us?

I didnt use annuity rates as you dont need to buy an annuity any more. However, IIRC (as i shut that piece of software down now) used an income rate of 3.5% and growth rates of 5% and 2%.

Take it this a personal pension as opposed to being in an employer "part" funded scheme. So you are not comparing like with like.

It can be what you like. The gross contribution is there and if you are lucky enough to have an employer that pays a quarter of it or whatever then good for you.

The growth rates used 25 years ago would no doubt have been higher. They certainly were when I was given projections.

Absolutely. Longevity was thought to be much lower then and investment returns were much higher too. The private sector has had to factor both of those in and it has resulted in both companies and individuals having to pay more to make up for it.

However, there are many nice personal sector pensions too that don't necessarily reflect the value of the recipient.

The difference is that the cost is paid for by that company and its workforce. Not by everyone in the country.

Perhaps if we squeeze from both sides it might make it more palatable.

The problem is that the private sector has had its squeeze. It has taken its medicine. The public sector seems far less willing to take it's medicine.

If public sector jobs were still low paid I would say they deserve the pensions. Or if the public sector hadnt ballooned during the Labour years to include all sorts of unimportant jobs that could be handled in the private sector at a lesser cost then it wouldnt be as bad as you could present it as those in public service. The squeezes need to be spread around in many areas but everyone needs to take the pain. That is except Union leaders who earn far more than the "hard working caring people" that they represent.

Intoodeep

One day in a time far away, a penny will drop and those currently intoxicated by anti-govt,anti-banker,anti-private sector successes etc etc. will finally realise that without the Private Sector there is NO Public Sector.

Wealth created in the first place by the Private Sector results in services being provided by the Public Sector and paid for by the Private Sector.

Get it....................no I thought not ,far too simple.

Chicken and Egg (or in the case of the Public sector the Egg would be a free range double yolked humdinger of an egg)

grizzly1911

dunstonh wrote: »

I didnt use annuity rates as you dont need to buy an annuity any more. However, IIRC (as i shut that piece of software down now) used an income rate of 3.5% and growth rates of 5% and 2%.

Yes back then they were quoting 7% as the lower rate.


Absolutely. Longevity was thought to be much lower then and investment returns were much higher too. The private sector has had to factor both of those in and it has resulted in both companies and individuals having to pay more to make up for it. What is to say the investment returns won't recover over the longer term (unlikley as that may seem at the moment).


The difference is that the cost is paid for by that company and its workforce. Not by everyone in the country.

As part of a balanced fair society it could be argued that they may be benefiting unequally form others too.


The problem is that the private sector has had its squeeze. It has taken its medicine. The public sector seems far less willing to take it's medicine.

If public sector jobs were still low paid I would say they deserve the pensions.

No the low paid ones have been farmed out to the private sector where they don't get a pension either.

Or if the public sector hadnt ballooned [STRIKE]during the Labour years[/STRIKE] to include all sorts of unimportant jobs that aren't required but as a result of pandering to liberal groups some of which could be handled in the private sector at a lesser cost but same price to the tax payer ....

The squeezes need to be spread around in many areas but everyone needs to take the pain. That is except Union leaders who earn far more than the "hard working caring people" that they represent. Same comment goes for the Politicians and Ministers.

I don't dispute that the public sector schemes need to be adjusted to fit the capitalist model.

Whether that capitalist model is the correct one is for anoher thread.

dunstonh

The squeezes need to be spread around in many areas but everyone needs to take the pain. That is except Union leaders who earn far more than the "hard working caring people" that they represent. Same comment goes for the Politicians and Ministers.

Whilst it is fashionable to bash a banker or MPs, the MPs did have their scheme reviewed in 2009 and it under review again. The 2009 review increased contributions. Also, the MPs scheme is funded. The average contribution from MPs is 9.1%. So, that is quite a bit higher than the average. They still have the advantage of 40ths scheme but that is understandable given the short career. But they do still need 33 years for full entitlement.

When MPs earn £65k and tube workers earn £50k then you do have to wonder if the pay for MPs is that high. Of course, we could factor Z list celebs earning hundreds of thousands or even millions for appearing in photographs in the press into the distortion of pay ......

Whether that capitalist model is the correct one is for anoher thread.

It is for another thread but I would just say that it is the right model but it has been taken to the extreme. When you have Small and medium size companies turning a profit and employing people with good benefits and offering things like canteens, a local club etc, they should not be allowed to be taken over and stripped bare just to increase the profits of a minority. Globalisation has brought benefits but it has damaged society and the damage almost certainly cannot be repaired.