Makes my blood boil

uk1

http://www.telegraph.co.uk/finance/personalfinance/pensions/11152840/Public-vs-private-sector-pay-gap-is-5000-or-a-fifth-of-earnings.html

Jeff

qwert_yuiop

Muscle750 wrote: »

I wont mention doctors in hospitals either I know one who if off duty and has to go in and sign a death certificate gets paid very well for doing so.

You just have mentioned them, and I don't think this is right. I've a brother who's a hospital doctor and I know he gets a fee for a cremation authorisation but I've never heard anything about getting paid for death certs. His hours, by the way, are wild. He gets out of the place when he's finished, not at any set time.

BobQ

uk1 wrote: »

http://www.telegraph.co.uk/finance/personalfinance/pensions/11152840/Public-vs-private-sector-pay-gap-is-5000-or-a-fifth-of-earnings.html

Jeff

This claims that most public sector workers are on FS pensions which is now incorrect. CARE schemes were being introduced at that time.

The DT and DM keep trotting out this claim based on "average salaries". This is meaningless. Its like saying the average pay in ASDA is £18000, it might be true but most staff are on NMW and a small proportion are earning £50K plus. What matters is pay of equivalent jobs.

Average public sector pay is generally higher because outsourcing now means that a greater proportion of jobs require higher qualifications and skills than in the private sector.

uk1

I knew for absolute certain that a "rational" explanation would be forthcoming.



Jeff

agarnett

I must admit having been away from the keyboard for a few hours I am heartened in that we do seem to have sparked a little more debate on the scale of the problem, but there seems precious little acknowledgement by those who are benefiting or expecting to benefit. I do hope Muscle750 doesn't mind the way I have attempted to steer his thread a bit on the macro scale of things?

One of you accused me of spin to my arguments - like most in the thread with one or two exceptions who will be wise enough to know who they are, I am not immune to that, but could you please stick to the problem at hand and stop trying to knock us down as individuals. Could you not say something objective about the big problem of funding such generous pensions, which is actually incidental to Muscle750's personal circumstances and anecdotes and my subjective views, although obviously has a major bearing on how fair we think things have become.

Forgive me not acknowledging by name, but another of you implored that some of the public service employees are now contributing 10% of salary to their own pensions. I have to point out that it is like a finger in the dyke! I think some of them might have to contribute 50% of their salaries in order to pay for their own pensions as they stand.

I think the same person also rather casually suggested that the public pensions liability figure, which I think is probably £1,000,000,000,000 if measured on some kind of insurance buy-out basis (which is just one of several possible alternate methods of valuing a pension scheme), is reducing because of actions such as employees now contributing. I'd like to see the actual trend of that £1T on a graph. I suspect its trend is a little like the £1.6T (other) National Debt - whilst remembering that neither of them together represet the actual debt picture which is deliberately obfuscated by dodgy treatments by none other than civil servants we might reasonably suppose!

I will admit that by introducing a number of the £153BN annual pension spend I found somewhere on the ONS or OBR websites, and by arguing that it was more than 3x the spending on Defence, I did hope some kind soul would jump in and correct me by explaining which bit of the £153BN was simple State Pension for all, and which was public service pension payments.

So we now have a suggestion that actual annual public service pension payments to existing public sector pensioners might be around £10BN - can anyone confirm that?

Someone else thought my referendum question wasn't neutral - can someone suggest a rewrite that would be?

Someone else has wittered about longevity and discount rates as if they are unique features of calculation of public sector pension liability. They are the common jargon employed for all DB pension schemes, albeit they are all tweaked (spun) to suit the separate scheme agendas.

Private sector does it too, but not the entire private sector. Where a sponsoring employer is

(a) doing well making good profits and growth, and
(b) heavily influenced and reliant upon keeping its pension scheme workers happy and not jumping ship to competitors and probably there is strong union representation

then you can expect the DB pension scheme valuation to be transparent and the scheme to be relatively well funded.

Conversely, where there are serious questions on the viability of the employer, or the employer's future is not reliant upon keeping existing staff, or perhaps due to takeovers and redundancy the majority of the members have left employ and have become deferred in bulk, the pension scheme is most likely to have been manipulated and undervalued in order to kid everybody that the employer need not contribute as much as is actually needed to keep it funded healthily.

In the case of public service pensions, it is far worse than the second scenario. Despite witterings to the contrary by some, the government has thus far not messed much with public service pensions (other than by slowly introducing soft employee contributory requirements twenty years behind trends in the private sector and by using CPI instead of RPI and playing with CARE).

There are surely far more ills befalling private sector pensions after recent reforms, especially regarding abdication of contracting out promises, from which public service pensions remain insulated.

It is spin to suggest that somehow public service pensions have been reeled in to anywhere near the extent that has occurred in the private sector. In the private sector, reorganisations and takeovers have been rife, and a myriad of exploitative outcomes has befallen an absolutely massive pool of poorly represented individual employees, and even existing pensioners.

In public service I think it is probably true to say that when TUPE into private sector has occurred, there has been a much more standardised and insulative approach to continuing with robust pensions provisions for those affected. This is perhaps part due to strong union representation.

Look at what happened in Air Traffic Services who were once part of the civil service. Their non-contributory pensions were even maintained as part of the CS scheme I think for quite a long period after they were floated off and started calling themselves private starting around 2002 I think? And there are I think some enormous salaries being paid to old stagers coming up to retirement in NATS. Goodness knows what kind of hybrid funding is behind them and whether any of it still shows up as UK government pensions liability. I suppose that some transfers of large dollops of government cash must have been made at some stage to buy NATS pensions for them or to kick off their scheme separately. One figure I read some time ago suggested their pension scheme assets were worth £3BN and their annual income as a business was only £150M. Or put another way, they had become a massive pension scheme for the boys which happened to run an air traffic control service! Maybe that's also why their computer systems have failed more than once - some things just don't add up right, especially when emphasis is on achieving something else entirely! Fascinating anomalies abound around public service accounting!

I have seen no-one here tell us that they have lost what public sector DB pension entitlement they had built up prior to any transfer into private sector. I guess that's because deferred public service pensions have never been wound up, have they? They can't be, because there's nothing to wind up except Muscle750 and me every time we think of the thick gravy that leaks from them more like milk and honey to sustain the chosen angels! The public service schemes are more or less still almost entirely unfunded as far as I can make out. That isn't the case in private sector where in my own case I can state I've been a member of no less than four DB schemes, and that now there's just one left that has not been wound up! The surviving one is wobbly because the sponsoring company is no longer one I'd bet on - however I am more or less stuck with it (or PPF in the worst instance)!

I guess the corollary to "wind up" in public service pensions would simply be a retrospective change of the pensions promise. That is exactly what a DB wind up effectively does too! Why should public servants be immune from broken promises? Private sector endured a lot of grooming type rumour and bluster around 15 to 20 years ago that private sector DB pensions were never contractual (so there was nothing to complain about if they were stopped or messed with!). New laws around 2004 kerbed opportunist wind ups, but almost all the horses had bolted long since.

Do public servants really think their pensions are contractual and can't be messed with? I don't blame them trying to assert it (I tried for a while in the private sector and it may have cost me a job around 2000), but in the light of what happened in the private sector, what's going to save the public sector from a similar fate?

bowlhead99

agarnett wrote: »

MPD wrote: »

agarnett wrote: »

There should be a national referendum on this question. No doubt about it.

It could be in the form "Do you agree that public service pensions payments should now start to be subject to a special additional rate of income tax in order to offset the unexpected windfall effects of outdated "for life" pension promises made when pensioners lived on average only half as long in retirement?"

Referendum questions are supposed to be neutral then it is up to the different campaigns to persuade the electorate to back a particular point of view.

Someone else thought my referendum question wasn't neutral - can someone suggest a rewrite that would be?

How about

"- should the government continue to meet its contractual obligations to its current and former public sector employees out of general taxation, or

- should it renege on them by making the employer payments as promised but then immediately clawing the money back through a special tax which is not payable by the general population receiving salary or pension but only by public sector employees?"

Why should public servants be immune from broken promises? Private sector endured a lot of grooming type rumour and bluster around 15 to 20 years ago that private sector DB pensions were never contractual (so there was nothing to complain about if they were stopped or messed with!). New laws around 2004 kerbed opportunist wind ups, but almost all the horses had bolted long since.

Do public servants really think their pensions are contractual and can't be messed with? I don't blame them trying to assert it (I tried for a while in the private sector and it may have cost me a job around 2000), but in the light of what happened in the private sector, what's going to save the public sector from a similar fate?

It seems to be a sad fact of life that none of us are immune from broken promises.

However, when promises are broken, people feel aggrieved and morally wronged. For example, your post implies that you left your post, or were sacked from it, as a result of someone messing with your contract and you being upset about it. I expect you felt that morally you were in the right and you were disappointed with the immoral actions of your employer trying to mess with something of yours and hoping they would get away with it because they were powerful and you were not.

I don't know or care the details, but the basic point is that people should do 'the right thing' and not break promises to weasel out of something they committed to.

However, you say in post 163 that continuing to pay the committed pensions for the public sector employees (who went to work for a salary of x and a pension of y) is morally wrong:

public sector pensions are unsustainable not just mathematically, but also morally and politically.

That is clearly a nonsense. It is not 'morally unsustainable' to continue to pay the pension of y to the person who agreed to work for it. It would be morally unsustainable to make the promise, get the person to do the work, and then not pay them.

You also say it is 'Mathematically unsustainable', but that does not make much sense as a concept. According to the mathematics, whatever number you want to pay, you can divide it by another number and find out what that costs per person or per year or whatever. The maths does not stop the obligation existing, or mean that the numbers can't exist, it just tells you what it has cost. Then you can budget how to pay for it.

At the moment, you are saying there is a trillion of liability to current and former public sector employees for the work they have done or will do, and this amount of money in current-year terms will probably be paid out over about the next 80 years by which point the current 18 yr old employees will be 98 or so. That trillion is circa £30k each for the number of taxpayers we have.

But it doesn't need to be paid today, because this is the cost of paying for things out in the future, and someone who is a 20 year old public sector worker does not need me to write them a cheque now for all the pension payments they're going to get between retiring in 2060 and dying in 2100.

There are plenty of other things that we will be paying for over the next 80 years too. The economy generates a couple of trillion of GDP every year. If it had to pay a trillion out tomorrow to securitise the next 80 years of pension obligation, it would struggle to do that. However if it had to fund it over 80 years, either by giving it to an insurance company now and funding it with an 80 year bond which the taxpayers pay off over the next 80 years, or just by funding it directly from taxpayers over the next 80 years, it would probably work out just fine.

You also said in post #163 of public sector employees:

Whether senior, middle, or lower paid types, they all generally demonstrate a rather ugly picture of "entitlement"

Presumably by including the high and low paid people you are aiming to generalise and not focus on public sector fat cats with gold plated £100k pensions.

So the aspersion you're casting is on all "those who are expecting or already receive public sector pensions" because they are stupid and/or greedy and don't realise that what their employer agreed to pay them for going to work over the years is going to cost us a trillion in total (because there are many millions of them) and how terrible that is.

But there are no doubt some who know that the pension promises which went along with the salary promises when they agreed to take the job or stay in the job will cost the country millions or billions or trillions when you add up all of the public sector workers together.

Some of those will have done the rudimentary maths and realised that having millions of people get paid hundreds of thousands each over their retirement years is going to cost a lot. Some won't care for the specific numbers, because figures like billions and trillions are pretty abstract concepts when you are a teacher or emergency services worker getting your £30k a year and you don't have any responsibility to prepare a government budget. How should they know whether the sum total of what they are promised is going to cost £500 billion or £1000 billion or £2000 billion?

It doesn't mean they shouldn't feel 'entitled' to a pension of £y when they agreed to work 60 hours a week as a teacher or healthcare worker for a salary of £x and a pension of £y.

Andy_L

uk1 wrote: »

http://www.telegraph.co.uk/finance/personalfinance/pensions/11152840/Public-vs-private-sector-pay-gap-is-5000-or-a-fifth-of-earnings.html

Jeff

IFS press relaese
http://www.ifs.org.uk/publications/7397

and the 2 reports
http://www.ifs.org.uk/publications/7396
http://www.ifs.org.uk/publications/7395

"Between 2007 and 2012, the
public sector differential including pensions fell to 17%"

agarnett

Thanks bowlhead99.

Interesting how many thanks you got very fast before 10am having posted at 7am. I can't help but wonder how many are public service pensions beneficiaries ... today being a first workday back from a long weekend, I mean.

Sorry! Looks can be deceiving ... sometimes ... maybe they were all in early so as to have their heads down fully compliantly when the boss arrived.

It is fair that you point out the inconsistency in my argument about my own feelings of being ill done by around 2000 when my own DB pension of which at that time I was an active member was suddenly frozen after a takeover and then immediately moves were made to wind it up, which clearly I thought was immoral, and then the comment I have now made about the exact opposite being the 2016 case with public service pensions.

Sure, it is not nonsense but it is a kind of moral dilemma, but given 15 years or more of further history, I know where I stand right now and I know what I have seen from public sector workers who did very little to support private sector complaints back then, on an "I'm alright Jack" basis of passive non-intervention (same as your "I don't care"). We true Brits have been at war aaginst bad things happening in the workplace, and you Lord Halifaxes have been staying out of it, largely unaffected perhaps, trying to keep a lid on it?

Well, unfortunately you aren't alright. We're gunning for a reduction in your pensions one way or another now to redress the onvious immoral imbalances to which your peers and colleagues have been too shameless in .claiming entitlement no matter what.

There's been a blitzkrieg out here in private sector land pension-wise and sadly, since your large unions did nothing when asked to assist other trades unionists when they complained about what was happening in private sector land, you lot need to be compulsorily called up like the rest of us to clear the way forward for this country, and to share and share alike.

How dare you dismiss the billions and trillions that the public sector pension arrangements cost as something you needn't be concerned about because it is irrelevant to your original pension promise? You are not taking about some faceless insurance company to whom it is fair game to place your exaggerated claim. You are presenting your claim to 5 out of 6 of your working neighbours to pay. Have you tried knocking on their doors to ask what they feel about it?

And just how do you justify kicking the unopened can 80 years down the road as if it is simply going to disappear faster than an ice lolly on a hot summer day?

I am very troubled by the apparent attitude of public sector employees to such an obvious national problem. You are assumed to be helping to run the country through troubled times, not slowly sink the bloody thing, commandeer the kitchens and winestores and steal the life boats for yourselves when the time comes.

There are far too many references to public sector employees having made clever choices and having important jobs in society and even I read yesterday, that they might be generally more skilled than private sector!

If that was so then why are we in such a state and why has so much been outsourced to private sector?

Might the latter be because private sector generally gets a hell of a lot more done for the money and perhaps also that in the private sector you can actually get fired for mediocre performance at the medium and lower levels, whereas in public sector it is still a good place to hide if you aren't fussy about job satisfaction - no-one bothers you as individuals - you might eventually get outsourced or TUPE'd as a department and you rely on reorganisations for promotions, but is it not true to say that it is rare that anyone will come after you individually?

Nope, the current reward levels for established employees in public sector are indeed now morally wrong particularly because of the skew caused by the outdated overly generous pension promise which has been way way overtaken by the last two decades worth of increase in life expectancy in retirement.

Now you can either engage with the actual numbers, and start to rationalise using the superior skills you might logically possess if you are a public servant, or you must put up with the likes of me continuing to point you out to the 5 out of 6 of us in the street, paying through our noses in ways that are deliberately hidden from public view by civil servants who want to grab as much as they can while they still can.

Teachers and emergency service workers long since ceased to be people I automatically feel I should respect. I had absolutely excellent teachers in the main 50 years ago - extremely committed. I respected local policemen and doctors (even though one was an alcoholic) and local volunteer firefighters. That's changed enormously. I even respected professional footballers who had the right to retire at an early age with shot knees!

Roll forward 50 years and all those jobs are are just career choices. They do not automatically indicate where to find the predominance of fantastic role models as once was the case. Indeed there are, for example, far too many masquerading as carers in the NHS when they are clearly more interested in advancing their own career by achieving bed targets at the expense of OAP comfort, or covering their own a$$.

I've unusually worked alongside ambulance staff and paramedics. Sure, they get caught up in horrible scenes sometimes but so do the general public. I've been the first on the scene at road accidents attending someone with broken bones protruding and doing my best to care for them in a snowstorm until the pros arrived. And I wouldn't mind betting that Muscle750 has been exposed to some of that also. Not nice but either it affects you terribly or it doesn't. It doesn't make you worthy of special reward. Gracious acknowledgements sometimes, but invitations to move to the front of the queue when things are tight? Erm .. no. Full English breakfast with two eggs if you are flying today, Sir? Ahem!

I've had to deal with drunks threatening me when I have asked them to move on because police are so short staffed most communities have to do a degree of their own policing, don't we! Again. Either it affects you terribly or it doesn't. Or maybe most people wuld rather not get involved. Safer to hide and remain schtum unless a Kalashnikov is being sprayed in your direction.

Like perhaps most public sector workers, most of us "general population" (as you interestingly call us) also tend to hide quietly behind the curtains. Blast curtains in the public sector case I guess!

When police do respond to incidents, more likely than not, they don't get out of the van or if they do, they often leave before persons complained about, having lost the war of words on the street and not really being interested in anything other than saying they attended, and "Next?" What's to applaud about that?

Interestingly too, I have found police and ambulance staff rather look down their noses in London at firefighters whom I have heard disparagingly refered to as "grunts" and a bit dim! Police too often do dump drunks and druggies on ambulance staff to sort out, and stab proof vests are de rigeur in some places, but again, these exposures and risks either affect you or they don't. I haven't heard of any recruitment drive to overcome a shortage caused by there being not enough wanting to do the job. Have you?

So if "mathematically unsustainable" isn't your kind of language, then how about quite simply, "it won't wash!"


We're on to you brother! Its too late to cling to moral justifications based simply on what you think you were promised. Were you promised as a group, a good chance of a comfortable early retirement and then 40 years retirement pension each? - no you were not - you obviously didn't all expect to retire ten years early or to expect then to live to nearly 90 on average when you started your careers - no-one did! Stop this denial. Get real please!

Andy_L

agarnett wrote: »

And just how do you justify kicking the unopened can 80 years down the road as if it is simply going to disappear faster than an ice lolly on a hot summer day?

Its not an unopened can, its a can that's having an 80th taken out of it every year (thats probably stretching a metaphor far to far).

Last day of the month today so a whole load of DDs left my account to pay bills. The fact that over the next 80 years the total cost of them is several years of my income is irrelevant because I don't need to pay them all at once. Its the annual cost that's important which, IIRC, was said to be 5% of GDP a few posts up.

Andy_L

agarnett wrote: »

There's been a blitzkrieg out here in private sector land pension-wise and sadly, since your large unions did nothing when asked to assist other trades unionists when they complained about what was happening in private sector land,

Probably because secondary action was outlawed years before.