Makes my blood boil

atush

Many of them closing or scheduled to.

M&S, Tesco, they are all closing.

and last week we had an argument here abt the disgusting thought of changing current DB pensions from RPI to CPI. Any many slammed the idea, "how can you do that to those poor people"?

Ask BHS employees who would have been better off as they wouldnt have lost 10% plus, and then TATA steel when it goes that way. What would they have been happier with? A job, as the company might not have had to close as they might have been able to sell it off?

Or no job and your pension in the PPF.

Choose what you want to, i know which option I would have chosen if asked.

Sometimes people here have no idea of how real life works.

BobQ

uk1 wrote: »

I think many people in private sector DB schemes equally under value what it is that they have. A contributing factor is that many schemes may have stated an employee contribution and an employer contribution and members therefore overlook the enormous additional amounts that employers have had to subsequently add to reduce deficits. What may have been stated as say a 10% or 12% contribtion originally, may end up being considerably more perhaps as high as 30% or more .... it is just masked by the large capital contributions.

I estimate that after tax my own contribution was less than 5% than the total value of the fund I now "own". Many in the private sector haven't done as badly as they think when compared to the public sector. Not saying "better" but not as bad.


Jeff

The way it works is that each of the unfunded schemes calculates a nominal employer contribution for staff. This is real money that is added to the employee contribution and paid to HM Treasury. So the more staff they have employed in a given department the more they pay. HMT then accept responsibility for paying pensions to those retired. This is of course just an accounting mechanism on the Government's books.

I think that most employees understand the value of their personal contribution. What they do not think about is the true cost of providing their future pension.

Most people in the public service I come across see the increases in contributions over the past four years and the pay freeze/cap as a cut in their pay for reduced pension benefits. The way the Government did this was quite crude. The need to do it was valid. But the problem was that people did not understand the value of the employer contribution.

In my view HMG missed a trick. Had they said the current schemes will be closed and staff will move to a new scheme, they could have offered scheme options to people that would have revealed this employer contribution. Say a CARE Scheme and DC Scheme with different employer and employee rates. I suspect most people would have chosen the DC scheme.

BobQ

bigadaj wrote: »

Yes, I'd like to see a list of those private sector schemes open to new employees. Think it would be pretty short.

I suspect that they will be schemes available to small numbers of senior levels in some large firms.

uk1

atush wrote: »

Many of them closing or scheduled to.

M&S, Tesco, they are all closing.

and last week we had an argument here abt the disgusting thought of changing current DB pensions from RPI to CPI. Any many slammed the idea, "how can you do that to those poor people"?

Ask BHS employees who would have been better off as they wouldnt have lost 10% plus, and then TATA steel when it goes that way. What would they have been happier with? A job, as the company might not have had to close as they might have been able to sell it off?

Or no job and your pension in the PPF.

Choose what you want to, i know which option I would have chosen if asked.

Sometimes people here have no idea of how real life works.

Thanks.

There are over 11m people currently in over 5000 private defined benefit schemes. At the moment there is no reason to believe that most of them are in any danger of losing any of the benefits they have already accrued

I have no idea what your last line means I'm afraid.

Jeff

saver861

Malthusian wrote: »

This gave me nine posts, from which I think we have a clear winner with this essay on "Deindividuation" in 2011 at an astonishing 3,610 words.
[FONT=&quot][FONT=&quot]However, this is arguably cheating [FONT=&quot]as th[/FONT][/FONT]e essay has been copied and pasted from another site.

[FONT=&quot]Therefore [FONT=&quot]my best guess f[/FONT]or [FONT=&quot]the longest post on MSE [FONT=&quot]which was actually written by a member[/FONT][/FONT][/FONT] [FONT=&quot]is [FONT=&quot]post [FONT=&quot]number 13,587 [/FONT][/FONT]in "5 [FONT=&quot]OS [FONT=&quot]([/FONT]Old-Style [FONT=&quot]Moneysaving[FONT=&quot])[/FONT][/FONT][/FONT][/FONT] Pleasures in your Day Today part 2", at an impressive[FONT=&quot] 2,377 words.
[/FONT][/FONT]

lol .... good work there bro. Ask any question and someone will come up with an answer!!

Malthusian wrote: »

For reference, Bowlhead and Agarnett's last posts were a mere ~1,000 words each

Right ... and there was me thinking they were in the running!! Looks can definitely be deceptive. Their posts are mere snippets in comparison .....

Guys .... shape up .....

p00hsticks

bigadaj wrote: »

That's an irrelevant point though.

You contend that reduction in pension benefits will lead to problems in recruitment and potentially lower quality of staff, I contend that in many cases this is demonstrably untrue due to the ignorance of those staff to the value of the benefit they have accrued.

It seems that they would attract many more and better people by a 10% salary increase and removal of defined benefit schemes.

In my personal experience I've seeen that happen with more than one of the large private sector companies I've worked for in my career.

The large FTSE 250 company I worked for for most of the eighties and nineties offered what would now be seen as a very good employment package - DB pension, death in service benefit, private health cover, good sick pay, 25 days holiday with bank holidays on top, company car once you reached a certain level of seniority, etc.

But they came to the conclusion that both potential recruits and exisitng employees didn't recognise the full value of the benefits that it was costing them a considerable amout of money to provide. So they took the decison to increase everyones salary by what the benefits were costing them, and then give employees the choice of buying back the benefits that they personally wanted - including different levels of DB pension accumulation in return for varying levels of contribution. It was broadly cost neutral for the company (although requiring significant additional admin) but increased employee satisfaction and meant that jobs could be advertised with a higher headline salary.

Several of the private sector companies I've worked for since introduced or already operated the same sort of scheme.

But as previous posters have pointed out, to implement such a scheme for public sector staff in a similar way would require finding a lot of additional money now to increase salaries in return for a potential reduction in pension liability decades down the line, even if the unions would agree to it.

uk1

p00hsticks wrote: »

In my personal experience I've seeen that happen with more than one of the large private sector companies I've worked for in my career.

The large FTSE 250 company I worked for for most of the eighties and nineties offered what would now be seen as a very good employment package - DB pension, death in service benefit, private health cover, good sick pay, 25 days holiday with bank holidays on top, company car once you reached a certain level of seniority, etc.

But they came to the conclusion that both potential recruits and exisitng employees didn't recognise the full value of the benefits that it was costing them a considerable amout of money to provide. So they took the decison to increase everyones salary by what the benefits were costing them, and then give employees the choice of buying back the benefits that they personally wanted - including different levels of DB pension accumulation in return for varying levels of contribution. It was broadly cost neutral for the company (although requiring significant additional admin) but increased employee satisfaction and meant that jobs could be advertised with a higher headline salary.

Several of the private sector companies I've worked for since introduced or already operated the same sort of scheme.

But as previous posters have pointed out, to implement such a scheme for public sector staff in a similar way would require finding a lot of additional money now to increase salaries in return for a potential reduction in pension liability decades down the line, even if the unions would agree to it.

I'm really pleased I wasn't offered such a choice, because I fear I would have made the wrong one.

Jeff

Tromking

bigadaj wrote: »

Fair enough but your second point rather contradicts the first part of your answer.

The solution would be to increase basic salaries and reduce pensions, what private sector people think is irrelevant. The government is reluctant to do this because it would make the short term financia situation worse, whilst improving it in the longer term, politicians are only interested in the next few years, months or even days.

Out of interest where have the 1800 recruits gone in your example?

No contradiction.
Traditionally the complete remuneration package on offer was enough to keep the right staff in post, not so now in my experience. I agree, under this administration proper workforce planning is subservient to a five year government spending round.
Many of the new recruits resign in short order due to stress or are sacked after a unacceptable period of sick absence for the same reason. Factor in retirements and the 'old guard' resigning in increasing numbers also and you've got an unholy mess.

bigadaj

Tromking wrote: »

No contradiction.
Traditionally the complete remuneration package on offer was enough to keep the right staff in post, not so now in my experience. I agree, under this administration proper workforce planning is subservient to a five year government spending round.
Many of the new recruits resign in short order due to stress or are sacked after a unacceptable period of sick absence for the same reason. Factor in retirements and the 'old guard' resigning in increasing numbers also and you've got an unholy mess.

I'm not sure the Jeremy Corbyn style workers paradise in the public sector ever really existed.

As stated above many public sector staff didn't acknowledge the true value of thei pension benefits until nearing retirement, the main driver in job searches for most people was probably abive salary, the average person was often not looking to work more than 20 miles from where they lived.

Both average qualifications and earnings have increased in the oublic sector in the last few decades relative to the private sector, partially due to outsourcing but also due to pay rises in the oublic sector and constraints in the private sector, so public sector packages are generally more favourable than they would have been in the eighties or nineties.

Maybe I'm getting old but issues with stress are now getting widespread and unjustifiable, life generally gets better and easier from one generation to the next. Young workers now have so,e issues to gripe about, I'd say housing being the main one, but also student debt and competition for work from immigration, but stress at work is no greater than its been before.

BobQ

bigadaj wrote: »

I'm not sure the Jeremy Corbyn style workers paradise in the public sector ever really existed.

As stated above many public sector staff didn't acknowledge the true value of thei pension benefits until nearing retirement, the main driver in job searches for most people was probably abive salary, the average person was often not looking to work more than 20 miles from where they lived.

Both average qualifications and earnings have increased in the oublic sector in the last few decades relative to the private sector, partially due to outsourcing but also due to pay rises in the oublic sector and constraints in the private sector, so public sector packages are generally more favourable than they would have been in the eighties or nineties.

Maybe I'm getting old but issues with stress are now getting widespread and unjustifiable, life generally gets better and easier from one generation to the next. Young workers now have so,e issues to gripe about, I'd say housing being the main one, but also student debt and competition for work from immigration, but stress at work is no greater than its been before.

I have seen some analysis of civil service pay and one thing that came across was that the CS usually pays better than the market rate for those below average pay and they enjoy better pensions. The same is not true of those well above average pay, compensated to a large extent by the pension.

But as the value of the pension is reduced by the higher contribution rates and the lower pension benefits, this is changing. The civil service will increasingly find it difficult to attract capable engineers, scientists, project managers, computer scientists, analysts etc. Such specialists, in the private sector enjoy good pensions too. Similarly those managing large units in the CS get quite poorly paid compared with the private sector (the £150K plus people the OP moaned about) given the responsibilities they hold.

I am sure those earning below average pay will have little sympathy for them but over time the CS will either have to pay higher salaries directly or second people from the private sector at even higher rates.