Gold plated public sector pensions

Muscle750

https://www.moneywise.co.uk/news/2018-08-28/public-sector-pensions-triple-the-size-private-sector-counterparts

Again the gap is growing further

Silvertabby

Anyone who wants a public sector pension knows what to do. I'm certainly not going to apologise for the fact that the bulk of our pensions are from my and Mr S's joint 50+ years of service in HM Armed Forces.

Bravepants

As seen in the first comment of that article, the numbers are simply wrong.



I know a few people who run companies that pay the absolute minimum they can get away with towards their staff pensions. These companies put profits over staff welfare. It's the private sector that needs to be reformed.

hugheskevi

Again the gap is growing further

And with most public service pensions set to be improved from April 2019 the gap will be even larger, although the increase in statutory minimum automatic enrolment contribution levels from April 2019 will somewhat offset the growing difference.

As seen in the first comment of that article, the numbers are simply wrong.

I don't think they are wrong, rather, that they are heavily assumption driven.

The numbers in the article show a pension of 61% of what is presumably final salary. That looks about right - the reformed schemes were designed to deliver broadly what the older-style schemes delivered, but from a much later age (State pension age compared with age 60), with higher member contributions and with inferior indexation (CPI rather than RPI).

Of course, very few will work their entire career between age 25 and 68 in public sector, retiring at State Pension age and having received average earnings growth throughout their career.

Without analysis of total remuneration and skill level of employees (and disaggregated by things like qualification level, location, and so forth rather than the usual 'public sector' vs 'private sector' figures that are produced), this sort of analysis is largely meaningless.

Thrugelmir

Bravepants wrote: »

These companies put profits over staff welfare. It's the private sector that needs to be reformed.

Many people still need to accept the fact that they will need to make higher personal contributions. Companies need to make profits to survive. There's a lot of pressure on many with a higher minimum wage and increased employer pension contributions. Without factoring in other taxes such as the apprenticeship levy.

chucknorris

Silvertabby wrote: »

Anyone who wants a public sector pension knows what to do. I'm certainly not going to apologise for the fact that the bulk of our pensions are from my and Mr S's joint 50+ years of service in HM Armed Forces.

I think a lot of people initially don't realise the true value of DB pensions, so when they have compared private and public sector salary packages (including pension), they probably undervalued the public sector package.

Triumph13

Whoever wrote that article is functionally innumerate. How is the extra £11,151 of pension the PS worker worth £1.9 million! 0.59% annuity rates?

kidmugsy

What a lot of tosh is said about pensions. My views are:

(i) They are deferred pay. So their job is the same as the job of pay i.e. to attract and retain staff.

(ii) The question for each employer is therefore how best to use them to that effect.

(iii) My gripe with government-employee DB schemes is simply that I suspect that they are a needlessly extravagant way of achieving attraction and retention. The reason is that many of the employees and potential employees, especially the young, haven't the faintest idea of what a good deal they are. (By way of anecdotal evidence, see the endless stream of moronic posts on this forum - from teachers and NHS employees especially - canvassing the idea of not contributing to their pensions.)

(iv) So gripes along the lines of "it's not fair, mummy, his pension is bigger than mine" are worthless. So are gripes that Fred Ltd makes the minimum pension contribution. If you don't like the terms take another job.

Dox

Go and work for the public sector if you're jealous. Also try not to post links to articles which are quite obviously just wrong in terms of their facts.

Novice_investor101

Isn't one of the "downsides" of public sector DB pensions that you can't decide when to take them? Ie have to wait til State Pension age, or similar? Or they are reduced if wanting to take retirement sooner? If that's the case, that's a big downside.

Personally, I have a private sector DB scheme that will pay some money from age 65, the rest from age 66 & a bit (can change) & will reduce if I take it any sooner. I'm planning/wishing to retire at around 60 (now 36) & have the freedom to use my private DC pension as I wish.

Stubod

"......average salary of £28k getting a £17k pension????..I think not.

MOH earns more than that and their pension will be less than half what they earn???