Good luck to state workers picketing today

chewmylegoff

dunstonh wrote: »

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.

i think MPs have to contribute 11.9% if they are accruing in 40ths but may be wrong.

whilst i think that all MPs should be on money purchase schemes, and don't wish to endorse their scheme at all, i was wondering the other day whether changing the MPs scheme to a career average in line with the changes they are proposing would actually make it better rather than worse.

i) MPs are all paid a flat rate, but are paid more for being ministers

ii) (i am guessing that) MPs don't tend to retire and leave the MPs pension schemes whilst they are ministers.

iii) therefore, assuming that the flat rate that MPs are paid rises in line with inflation, a career average will be the same for any MP who has never been a minister, and better for any MP that has been a minister.

a) say you did 10 years on the back benches, 10 years as a cabinet minister (£130k), then another 10 years on the back benches, you would receive a pension of 30/40 x your final salary of £65k.

b) if you did 30 years on the back benches, currently you would receive the same pension as a) above.

under a career average scheme the first would get 30/40 x £87k, and the second would still get £65k.

also, under the current system the minister would pay in the equivalent of an extra 10 years of contributions at the £65k level.

anyway, i've probably missed something and got this all wrong, but i don't think there is much point enforcing a career average scheme on MPs. shove them all on money purchase.

the prime minister's pension is another matter entirely, and there is no way the PM should get £100kpa index linked pension regardless of time served.

martinjade

grizzly1911 wrote: »

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.

I think a very important point is being missed here. The public sector pensions are "guaranteed". They do not reflect the individual's own level of contributions. There is no investment performance to consider.

As far as "good luck" to the strikers, I don't think so. You are damning your own children to a lifetime of debt repaying, ask the Greeks

grizzly1911

martinjade wrote: »

I think a very important point is being missed here. The public sector pensions are "guaranteed". They do not reflect the individual's own level of contributions. There is no investment performance to consider.

The comparison dunstonh and I were making took that into account.

As far as "good luck" to the strikers, I don't think so. You are damning your own children to a lifetime of debt repaying, ask the Greeks

As for the last comment no different than letting them do a degree either but don't start me.

The pensions are just a symptom not the disease.

kabayiri

I think the MPs should get more basic salary as Dunston points out, but then have to fund their pension via the private pension providers, like many self employed and employed people do.

This way they would have a vested interest in the performance of pension funds, changing annuity rates, etc. Why shouldn't they experience the reality of the economic climate they are instrumental in creating ?

grizzly1911

kabayiri wrote: »

I think the MPs should get more basic salary as Dunston points out, but then have to fund their pension via the private pension providers, like many self employed and employed people do.

This way they would have a vested interest in the performance of pension funds, changing annuity rates, etc. Why shouldn't they experience the reality of the economic climate they are instrumental in creating ?

Why an increase then they can experience reality.

Of course many don't really need "our" pension and wouldn't know reality if it bit them on the bum.

martinjade

grizzly1911 wrote: »

As for the last comment no different than letting them do a degree either but don't start me.

The pensions are just a symptom not the disease.

You assume that we have control over them chosing to do a degree, their choice, their debt.

We chose to carry on letting final salary schemes (most private sector schemes have halted) prevail, our greed, their debt. Ask any Greek 30 year old who hates the elder generation, what he thinks his propspect of prosperity is.

grizzly1911

martinjade wrote: »

You assume that we have control over them chosing to do a degree, their choice, their debt.

Not really that easy - the majority of any meaningful jobs require a degree to open the door. I don't agree with that but it is the way of the work place.

We chose to carry on letting final salary schemes (most private sector schemes have halted) prevail, our greed, their debt. Ask any Greek 30 year old who hates the elder generation, what he thinks his propspect of prosperity is.

Don't have to ask a Greek I can ask someone from the UK.

I don't think the average Jo made a conscious choice between continuing a generous pension scheme and inflicting hardship on the next generation.

I would suspect the majority didn't and still don't appreciate the position that the country has been allowed to fall into. For others the realistion that our demise started in the 70s was more visible.