NHS pensions are bleeding the taxpayer dry

RickyB2000

Marktheshark wrote: »

Senior staff qualify for accelerated contributions of superannuation schemes.
Just 5 years can see a senior executive obtain a £250k lump sum and £55,000 per year pension pot .

Most low floor workers will not live long enough to get their own contributions back.

Like everything this government has its hand in, their chums are milking it dry.
Still, we vote for them so why would they care

But surely this is the same for anyone who gets promoted into senior executive positions in private companies (may not be in the form of pensions but things like bonus and share options). Then the government will claim that to retain their talent they have to match the private packages in some way. So again, perhaps the root cause is the run away packages in the private sector. So maybe by fixing the private sector we would then fix the public.

Of course in a globalised world the government will claim it can't fix the private sector as everyone will just emigrate.....

So I think this whole thread is wrong. It should focus on the private sector and its pay structures and its removal of decent pensions rather than the public sector.

bigadaj

RickyB2000 wrote: »

But surely this is the same for anyone who gets promoted into senior executive positions in private companies (may not be in the form of pensions but things like bonus and share options). Then the government will claim that to retain their talent they have to match the private packages in some way. So again, perhaps the root cause is the run away packages in the private sector. So maybe by fixing the private sector we would then fix the public.

Of course in a globalised world the government will claim it can't fix the private sector as everyone will just emigrate.....

So I think this whole thread is wrong. It should focus on the private sector and its pay structures and its removal of decent pensions rather than the public sector.

Maybe but the private sector ultimately pays for all the public sector spending, so the abive is a little naive.

It would be great for everyone to have better pensions but a combination of issues makes this difficult. Most people like paying less tax, so revenues are squeezed, public sector borrowing spiralled in the last decade, so the slack couldn't be taken up by continued borrowing to fill the hole between revenue raising by taxation and spending commitments.

Also teh majority of the population are short term, meaning that for many pensions are ignored, certainly for the first few decades of life, meaning that salary is far more important. Total remuneration is obviously the key figure but people prefer jam today in the main, some would prefer a slightly better company car now to a better future pension.

Public sector pension issues aren't going to go away, and will no doubt continue to be eroded because simplistically they have been far too generous.

There also the wider issue of the spiralling NHS budget in general, and the difficulty in persuading current and future generations to pay the already made pension commitments to people who have retired on a far better basis than they could ever aspire to, but that's potentially widening the discussion out too far.

RickyB2000

bigadaj wrote: »

Maybe but the private sector ultimately pays for all the public sector spending, so the abive is a little naive.

It would be great for everyone to have better pensions but a combination of issues makes this difficult. Most people like paying less tax, so revenues are squeezed, public sector borrowing spiralled in the last decade, so the slack couldn't be taken up by continued borrowing to fill the hole between revenue raising by taxation and spending commitments.

Also teh majority of the population are short term, meaning that for many pensions are ignored, certainly for the first few decades of life, meaning that salary is far more important. Total remuneration is obviously the key figure but people prefer jam today in the main, some would prefer a slightly better company car now to a better future pension.

Public sector pension issues aren't going to go away, and will no doubt continue to be eroded because simplistically they have been far too generous.

There also the wider issue of the spiralling NHS budget in general, and the difficulty in persuading current and future generations to pay the already made pension commitments to people who have retired on a far better basis than they could ever aspire to, but that's potentially widening the discussion out too far.

But the public sector provides the infrastructure, an educated healthy workforce, laws etc required for a flourishing private sector. It is providing a service to the private sector. It is just that it is not easy to say this bit of tax paid for that bit of road. Most companies I have worked for will happily pay through the nose for a service that will give them a good business benefit, usually lining the pockets of the directors of the service company. It therefore doesn't surprise me that the equivalent people in the public sector expect to be paid the same overall. Though this argument does rely on the highly paid in the public sector being paid less than those in the private and being made up for with pensions. Reduce top end private sector pay and top end public sector packages would drop as well.

Most companies that have closed their final salary pensions haven't offered the equivalent in pay rises today. So it wasn't really a choice between extra pay or pension. It was just loss of pension benefit. For the low paid I am arguing that more should have been done to secure their pensions. I am actually not convinced on the argument that they are not affordable. But it requires both the private and public sectors to actually try rather than just get rid of them all for everyone. This would of course be unpopular with someone (higher taxes somewhere, less profit for companies , lower pay for CEOs etc). But then so is getting rid of public sector DB pensions yet everyone seems to want that to happen.

I will be interested in how the rise in the minimum wage and the enforced pension saving hits businesses. Surely these are all un affordable in the current climate. Maybe we should just cut the lot and let the private market set the wages and benefits of the lowest paid.......

missile

NHS employees work and earned their meagre pension, not like those crooks at Westminster who voted themselves a far more generous pension scheme.

Thrugelmir

RickyB2000 wrote: »

Perhaps this sentiment should be directed towards the private companies and asking whether they really can't afford to match public sector pensions. Maybe people should have put up a bit more fight than roll over and let their scheme be closed. Of course, a ressesion is the perfect time to remove benefit based on cost when everyone is in fear of their jobs........

Thank a former Chancellor for the demise of corporate pension schemes. A tax raid that has badly backfired.

Thrugelmir

BobQ wrote: »

How does does 40/60ths equate to 75% of a FS?

Maximum pension that could be accrued was 75% of final salary. I quoted 40 years as being an individuals working life.

Thrugelmir

RickyB2000 wrote: »

But surely this is the same for anyone who gets promoted into senior executive positions in private companies (may not be in the form of pensions but things like bonus and share options). Then the government will claim that to retain their talent they have to match the private packages in some way. So again, perhaps the root cause is the run away packages in the private sector. So maybe by fixing the private sector we would then fix the public.

Executive pay is totally disproportionate these days. Likewise there's too many people with jobs for life in the public sector where it's all too comfortable. Be a long road ahead to change culture in both.

GunJack

Thrugelmir wrote: »

Maximum pension that could be accrued was 75% of final salary. I quoted 40 years as being an individuals working life.

I still don't get how you make a public sector (CS, LG,NHS) pension at 75% of salary....

BobQ

GunJack wrote: »

I still don't get how you make a public sector (CS, LG,NHS) pension at 75% of salary....

I think what he means is that in the CS Premium Pension - a 1/60th scheme- (closed to new entrants in 2007) you can get 75% by working 45 years. This only applies to those coming up to retirement.

bigadaj

RickyB2000 wrote: »

But the public sector provides the infrastructure, an educated healthy workforce, laws etc required for a flourishing private sector. It is providing a service to the private sector. It is just that it is not easy to say this bit of tax paid for that bit of road. Most companies I have worked for will happily pay through the nose for a service that will give them a good business benefit, usually lining the pockets of the directors of the service company. It therefore doesn't surprise me that the equivalent people in the public sector expect to be paid the same overall. Though this argument does rely on the highly paid in the public sector being paid less than those in the private and being made up for with pensions. Reduce top end private sector pay and top end public sector packages would drop as well.

Most companies that have closed their final salary pensions haven't offered the equivalent in pay rises today. So it wasn't really a choice between extra pay or pension. It was just loss of pension benefit. For the low paid I am arguing that more should have been done to secure their pensions. I am actually not convinced on the argument that they are not affordable. But it requires both the private and public sectors to actually try rather than just get rid of them all for everyone. This would of course be unpopular with someone (higher taxes somewhere, less profit for companies , lower pay for CEOs etc). But then so is getting rid of public sector DB pensions yet everyone seems to want that to happen.

I will be interested in how the rise in the minimum wage and the enforced pension saving hits businesses. Surely these are all un affordable in the current climate. Maybe we should just cut the lot and let the private market set the wages and benefits of the lowest paid.......

It's a lovely world where you can do that but countries will generally miss out in open competition when they are loaded with the full bill of a large public sector.

If you look at teh brooding and successful countries in the world then they are generally small government, the US has performed very well with nothing like an NHS and a minimal social security system.

Similarly such set ups are absent across Asia where the new and growing vibrant economies are generally based.

European countries often adopt a large state scenario, but it's certainly not successful and if anything leads to even more generational disparity than we have in the uk. Nowhere in Southern Europe is successful, the Dutch and Nordic countries are small and certainly have challenges and even Germany is diluting benefits for younger people, trying to pay for the commitments made to older generation is proving very difficult whichever country you look at.