Pension tax relief per year

kidmugsy

Orwell wrote: »

No wonder the country is nearly bankrupt when they are re-indexing the NHS pensions at CPI + 1.5% every year.

I wouldn't mind that if I thought it was a cost-effective way of attracting and retaining staff. But I'll bet it isn't.

Maelwys

kidmugsy wrote: »

I wouldn't mind that if I thought it was a cost-effective way of attracting and retaining staff. But I'll bet it isn't.

Considering they recently changed the date it pays out from 65 to your SPA, and the amount paid out from x/60ths of your "final salary" to x/54ths of your "career average salary"... and salaries have been frozen for the past 5 years...

kidmugsy

Maelwys wrote: »

Considering they recently changed the date it pays out from 65 to your SPA, and the amount paid out from x/60ths of your "final salary" to x/54ths of your "career average salary"... and salaries have been frozen for the past 5 years...

But what has that got to do with whether it's cost-effective?

Maelwys

kidmugsy wrote: »

But what has that got to do with whether it's cost-effective?

I was agreeing with your previous comment being a fairly safe bet - my point was that it's not currently as great a "way of attracting and retaining staff" because the benefits it provides to scheme members have been cut back so much

(RE cost-effectiveness, presumably the Powers That Be in charge of the scheme thought it was going to be cheaper for them if they swapped things around? Previous years might track CPI + 1.5%, but that doesn't mean much if the scheme terms have effectively been changed to pay out a lower DB at a higher age!)

Orwell

The point of the scheme changes were to reduce the astronomical (and soaring) cost of these schemes to the taxpayer. They clearly have not done enough in this respect and our children will be paying ever higher taxes to fund this "ponzi" scheme whilst trying to save for their own retirement.

Public sector workers have this distorted sense of entitlement and think that nothing should ever change in their terms. All their existing service is protected, but that's still not good enough for them. The taxpayer liability for this is over £1.2 TRILLION.

atush

Maelwys wrote: »

I was agreeing with your previous comment being a fairly safe bet - my point was that it's not currently as great a "way of attracting and retaining staff" because the benefits it provides to scheme members have been cut back so much

(RE cost-effectiveness, presumably the Powers That Be in charge of the scheme thought it was going to be cheaper for them if they swapped things around? Previous years might track CPI + 1.5%, but that doesn't mean much if the scheme terms have effectively been changed to pay out a lower DB at a higher age!)

It isn't working for retention of staff, because the members dont understand their pensions, and what they cost the taxpayer and how great they still are. Even if not as great as before.

Sure, you've been asked to pay more of the cost, and sure like the rest of us are being asked to work longer before receiving benefits.

But that is only right and fair. The alternative would be to see the schemes close. Surely you dont want that?

jamesd

Orwell wrote: »

Public sector workers have this distorted sense of entitlement and think that nothing should ever change in their terms. All their existing service is protected, but that's still not good enough for them. The taxpayer liability for this is over £1.2 TRILLION.

In a lot of cases the solution to this is to remove the public sector jobs and replace them with private sector jobs that pay some of the pension cost saving directly to the employees in their pay. The higher pay can make the jobs more attractive and many won't realise what they have lost on the pension side. The employees would also have the benefit of being able to choose how much money to use for retirement income, instead of it being a fixed amount. A nurse married to a doctor might find it pointless to make high pension contributions when his husband has a very high pension and large life insurance.

xylophone

A nurse married to a doctor might find it pointless to make high pension contributions when his husband has a very high pension and large life insurance.

Very PC, James...:)

Maelwys

atush wrote: »

It isn't working for retention of staff, because the members dont understand their pensions, and what they cost the taxpayer and how great they still are. Even if not as great as before.

Sure, you've been asked to pay more of the cost, and sure like the rest of us are being asked to work longer before receiving benefits.

But that is only right and fair. The alternative would be to see the schemes close. Surely you dont want that?

We're sidetracking the original topic a bit here, but I'll bite

Consider that the only thing many of the Joe Average staff on the ground see is their "take home pay" declining and declining (due to Wage Freezes versus Inflation and Cost of Living increases); and if they look at their pension pot they see the benefits of it getting lower (1995->2008 scheme) and lower (2008->2015 scheme) because the past schemes are all they've had to compare it to.

Next year they're going to be hit with more NI Contributions because they can't contract out of the Second State Pension any more. I can hear the whinging already.

Yes, those of us who look at the NHS's current DB pension more objectively in the context of the wider private pension market can see that it's still a very good deal. The old model simply wasn't sustainable, and you can't argue otherwise given the state of the economy. But that doesn't stop staff members feeling envious when they see corporate-sector pay starting to rise again. And it does very little to ease the posterior-hurt of many younger staff looking at older staff retiring early with Final Salary benefits.

Personally I quite like my job and I value the pension fairly highly - it's the main (monetary) reason why I'm choosing to stay in my current job at the moment. I've coped with the wage freeze by investing savings and lowering my mortgage rate, and I've a plan in place for retiring before my SPA. But I'm in a tiny minority in my department...

atush

No, you sidetracked the thread. I just couldn't leave your waffle on PS pensions stand.