NHS pensions are bleeding the taxpayer dry

System

You can hardly say that they pay unfairly generously, they just pay by a different mechanism

bigadaj

MatthewAinsworth wrote: »

Jeff/uk1 - just that to say the pension deficit is worse than the actual NHS finances, like saying the BHS pension is worse than the finances of the company BHS, is like pretending that the company doesn't really owe the pay it owes people. Separating the two is like creating a toxic bank that you're happy to allow to go bust, and looking only at the pension is not considering that it makes up for pay within the companies being less than they ought to be, whereas other companies may have a better basic rate but crap pension.

I think we ought to be careful attacking pension schemes without looking at whether the overall remuneration package can hold up without it

That analogy works very well for the private sector but us more difficult for the public sector. There's also the issue with long and short Termism, which with politicians probably being even more short term than big business managers, kicking the can down the road is often the preferred option.

Total remuneration should be the comparator but it often isn't with complaints about getting paid less eventhough the total package is generally similar or better.

The issue with doctors and nurses isn't that there is a particular recruitment problem, but that once qualified they are attracted to jobs in other countries, generally outside Europe. Fundamentally we don't train enough doctors and nurses in any case, how you control that is open to debate, unless there would be large penalties for emigrating after qualification.

uk1

It seems to me that people are wrongly concatenating two entirely separate topics.

The Times article isn't critical of NHS employees. It is highlighting the cost of seemingly hidden and high future cost of NHS pensions and in particular the very high pensions paid to a small number of presumably very highly paid employees.

What people seem to do when the topic of these pensions are ever highlighted is concatenate this topic as though it is an attack of NHS employees and they seem to become defensive. It isn't an attack on NHS employees. It is an attack (if anything) on governments.

The issue isn't about whether ordinary employees are badly paid or not. It isn't about whether they deserve decent pensions. It simply highlights the extraordinary legacy to future generations that the cost of the pensions will be, and that it is an issue that doesn't appear to be confronted, perhaps because of the previously mentioned defensiveness it generates.

imho

Jeff

System

Bigadaj - I think pay is the reason why they emigrate, you could use penalties but in the long term people may simply choose to train in something different, ultimately the pay has to be competitive

Jeff - indeed but the article and thread title is written in such a way to generate anger from the private sector towards the public, this especially rings true with the ideology of many times readers who view the state as bloated - it is but cut in the correct places, like all the red tape. The article would leave many to assume that NHS workers are overgenerously remunerated and focus cuts that way.

The NHS is big and its really a question of how much health service we want to budget for and actually need and are willing to pay for, and of course streamline the processes within.

Demographics might settle over time as the baby boomers pass through so the need for an NHS might change. Also remember that as long as public money doesn't leave the UK, it'll recirculate and come back as vat and inheritance tax

System

And many years down the line who knows, we may be making a huge trade surplus exporting to our Chinese overlords

PensionTech

Name calling aside ...... what number would you use to more accurately describe the liability?

I'm not sure where I have called any names?

To answer your question: I'm not entirely up on public sector pension funding (as I work on private sector schemes) so I apologise if anything that follows is incorrect, but my understanding of an unfunded public sector scheme is that the benefits are paid from the public purse on an ongoing basis, much like the state pension. If you believe that no public money should be used to pay public sector pensions, i.e. unfunded public sector pensions should not be paid at all, then of course you can label the entire scheme liability as a deficit. But that would be a rather niche view. The person who used the analogy of public sector salary is not far off. The pension is part of the remuneration deal and being public sector, it comes out of public money. You may want to know exactly how much this costs the taxpayer each year, but the article doesn't tell you that. It seems to try to imply that pensions cost significantly more than all other spending on the NHS, which is of course total rubbish, as I've pointed out.

Next week's salary is a funded liability from current years budgeted taxation, but some of it is from borrowings - so mostly "no" but in part "yes".

So you understand the concept that taxation pays for public sector benefits. This also applies to pensions.

I understand all of that, but what is incorrect about the article?

Its conflation of two entirely different figures - total liabilities vs annual spending. Its assertion that the entire liability should be regarded as a deficit - which only works if you don't accept that any public money at all is earmarked for public sector pensions. The completely inappropriate comparison of the funding structure of a private pension scheme to a public one. The general incoherent frothing based on concepts it doesn't appear to understand and either naive or wilful misrepresentation of figures.

It's just another overtly political rabid attack on public spending. I think the debate about whether public sector schemes are too generous is a valid one (personally I don't think they are too generous, but I don't really care enough to argue about it), but this article is very poorly written, woefully informed and doesn't add much to that debate.

uk1

MatthewAinsworth wrote: »

Bigadaj - I think pay is the reason why they emigrate, you could use penalties but in the long term people may simply choose to train in something different, ultimately the pay has to be competitive

Jeff - indeed but the article and thread title is written in such a way to generate anger from the private sector towards the public, this especially rings true with the ideology of many times readers who view the state as bloated - it is but cut in the correct places, like all the red tape. The article would leave many to assume that NHS workers are overgenerously remunerated and focus cuts that way.

The NHS is big and its really a question of how much health service we want to budget for and actually need and are willing to pay for, and of course streamline the processes within.

Demographics might settle over time as the baby boomers pass through so the need for an NHS might change. Also remember that as long as public money doesn't leave the UK, it'll recirculate and come back as vat and inheritance tax

I feel that the issue of public sector pensions, in this case specifically NHS pensions, which is clearly a topic about fairness and affordability and how it should be funded is always going to be derailed by simply changing the subject.

I think it is a bit of a shame.

Jeff

System

Jeff - you can't assess fairness without looking at total remuneration, and that wasn't the subject of the article

And affordability is of course a multitude of things - the efficiency of the NHS, demographics, and whether our national income will change as the world around us picks up

uk1

MatthewAinsworth wrote: »

Jeff - you can't assess fairness without looking at total remuneration, and that wasn't the subject of the article

And affordability is of course a multitude of things - the efficiency of the NHS, demographics, and whether our national income will change as the world around us picks up

Certainly. I agree.

When making comparisons about the value of pensions when comparing public versus private sector, it seems perfectly rational to compare what it would cost someone in the private sector to replicate exactly the same pension in the public sector. That annual percentage cost when added to a public sector salary.

But at the same time as saying that clear and correct point, you have thanked another post that contradicts and states the absolute opposite of that very point.

It therefore seems you are not supporting the point in the post, but instead thanking a poster for defending public sector "pay". Do you not see the contradictions in the points you have made with the post you have "thanked"?

You are therefore seemingly making my point that the two issues are being concatenated.

Jeff

Thrugelmir

My public sector employer contributes 26% of my salary as their pension contribution. While I obviously won't decline it. The pension I am accruing is obscene when compared to a similar private sector role.

We don't receive lump sums though. Doctors (Consultants) often receive £300k on retirement plus their pension. That simply isn't justified.