Why do we pay council workers Pension ???

collectors

Hi, can someone say why do we pay council workers pension. I be-leave I'm right in saying that around around 1/3 "& rising"of what we pay in council tax goes to council staff like office workers, dustbin men & women & so on. I have no problem with the workers who signed up for this as i am sure i would have done the same, but why are our rates being used for this. I don't get a pension subsidized like this, why should these workers get it with a massive loss to our local areas help & maintenance. These workers get a state pension on top of this as well. Its certainly wrong.

JoeCrystal

Making a tongue in cheek comment for your post.

I have no problem with the council workers getting pension since there is an actual funded system (LGPS) in place to pay for it (The largest DB pension scheme in the country with £180 billion in assets) . It is same reason as to why do we pay all these people on public sector pension scheme like the folks working in the NHS, the Teachers, in the Civil Service, Armed Force, Police, Fire and Judicial services. Indeed, why these these workers get it! Especially, all shortfall in paying these workers are funded entirely by the Treasury.

Indeed, my local Council got £2.3 billion in asset in their pension fund and paying out £16 million to its pensioners last year. So it got lot of assets to draw on to pay out the needed pensions.

Having said that, I have no doubt that they will end the extremely generous unfunded public sector pension schemes for these sectors, most likely after our lifetimes though. Sooner we switch over to DC pension schemes for them, the sooner that the savings can be made.

jamesd

How much of Council Tax goes to pay staff costs depends on how the council chooses to present it. This is because most funding for councils comes directly from central government revenue, not Council Tax.

There is a legal requirement for employers to pay something into a pension. It doesn't have to be as much and the private sector has largely eliminated the defined benefit schemes still normally used in the public sector, partly on cost grounds.

Just about everyone paying into a pension gets some government help, in the form of tax relief, at least a quarter of which is normally not subject to income tax on the way out.

PensionTech

but why are our rates being used for this. I don't get a pension subsidized like this, why should these workers get it with a massive loss to our local areas help & maintenance. These workers get a state pension on top of this as well. Its certainly wrong.

In the days when everybody had a defined benefit pension, you certainly would have received a pension subsidised like this. It would be subsidised by your employer. All public and private employers still do "subsidise" pensions, though many private sector employers choose lower-cost schemes now, to the detriment of their workers, and arguably, perhaps eventually the state. The workers you refer to are employed by the council so the council pays towards their pension like any other employer. The workers and their employer also pay National Insurance just like anyone else so they are also entitled to a state pension on top, just like anyone else. "Certainly wrong" is a very definitive and frankly ignorant judgment to arrive at before even bothering to find out and understand the facts.

CIS

How much of Council Tax goes to pay staff costs depends on how the council chooses to present it. This is because most funding for councils comes directly from central government revenue, not Council Tax

.

Exactly what I was going to ad. It's even so much how a council lays it out, the general routine seems to be compare every single council expenditure against council tax, whether any of it funds it or not.

Craig

CIS

PensionTech wrote: »

In the days when everybody had a defined benefit pension, you certainly would have received a pension subsidised like this. It would be subsidised by your employer. All public and private employers still do "subsidise" pensions, though many private sector employers choose lower-cost schemes now, to the detriment of their workers, and arguably, perhaps eventually the state. The workers you refer to are employed by the council so the council pays towards their pension like any other employer. The workers and their employer also pay National Insurance just like anyone else so they are also entitled to a state pension on top, just like anyone else. "Certainly wrong" is a very definitive and frankly ignorant judgment to arrive at before even bothering to find out and understand the facts.

There seems to be a sentiment among many that no-one in local government or civil service should get any form of pension scheme. At least these schemes have a chance of building up some funds as opposed to having no employers pension, landing on the governments door at retirement age and finding the monies are much lower than expected with any liabilities (pension credit etc) having to be met by the tax payers of that day.

Craig

dunstonh

I don't get a pension subsidized like this, why should these workers get it with a massive loss to our local areas help & maintenance.

Why shouldnt they?

historically, the pensions existed with decent contribution rates to the employees to reflect their service to the public sector with generally low pay compared to the private sector.

Gordon Brown accelerated the size and pay in the public sector and did create a future liability that has to be met and the Govt took this into account by increasing the contributions that members have to make. The schemes were also adjusted to make them less favourable to those having an accelerated career path whilst retaining parity for those with a long term career.

The public sector are always advertising for people to work for them. So, why don't you apply?
Or if you feel your pension is not good enough then approach your employer and tell them. Or find a better job/employer. Or if you can't then study harder and make yourself more marketable to employers.

These workers get a state pension on top of this as well. Its certainly wrong.

Your troll fails on a number of levels but trying to combine state pension with personal provision is just silly.

System

Hi

Blame Margaret Thatcher.

IF the fund reaches 100%, then the fund will likely pay money back to the council (taxpayer).

So the 3 (4) types of funding, Employee (via council taxpayer unless you are employed by a charity or Public School), transfer in of private pension fund. The Employer contribution, ranging from 0% (yes they do exist) upto 40%. Investment returns from the private sector marketplace.

So when councils are told to take a holiday in their contributions (poll tax time) then like not paying your mortgage for a year the repayments go up.

So when a council has a plan to reach 100% funding by 2030 the cost to the taxpayer will be -10% cuz the investment returns are currently low, just in double figures, and refunds will abound.

molerat

You subsidise my main DB pension when you pay income tax, you subsidise my other DB pension when you spend in a certain high street retailer, what is the difference.

latest_flame

collectors wrote: »

Hi, can someone say why do we pay council workers pension. I be-leave I'm right in saying that around around 1/3 "& rising"of what we pay in council tax goes to council staff like office workers, dustbin men & women & so on. I have no problem with the workers who signed up for this as i am sure i would have done the same, but why are our rates being used for this. I don't get a pension subsidized like this, why should these workers get it with a massive loss to our local areas help & maintenance. These workers get a state pension on top of this as well. Its certainly wrong.

Its most unfair that you (we) contribute to these infinitely superior pension schemes.
The very last people who will lose this "perk" will be the politicians and civil servants, you know, the people supposedly running the country for "all of us".
When private companies address the problem, they of course attack the lower grades first.
Sadly you and I are too far down the pecking order, but its OK for us to pay.
FS pensions are great, but only for the recipients.

Muscle750

Finally ...............Finally someone else agrees what a complete and utter pi55 take the public sector pension arrangements are with as i said many retiring at 55 and having more income from their pension than if they continued working. Us however will work till we drop to pay for them to have the lifestyle