Gold plated public sector pensions

woolly_wombat

Silvertabby wrote: »

The LGPS, however, has a live annual revaluation rate of CPI only - and if CPI is negative, then the reduction is applied to the CARE pension accrued to date.

Deferred and in payment increases are also CPI but, in the event of a negative, 0% is assumed and so no reduction is applied.

The revaluation rate is RPI for Additional Regular Contribution (ARC) contracts entered into prior to 1 April 2012.

That's why a significant increase in the cost of purchasing pre-1-April-2012 ARCs was imposed from 1 April 2013.

https://forums.moneysavingexpert.com/discussion/4499951/local-government-pension-scheme-increase-in-arcs-from-april-2013&page=3

Oliver1191

The problem with comparing 'private' sector to 'public' sector is that these generalised concepts are in reality too complex to compare.

As has been suggested, with headline figures based on generalised concepts you end up coming up with non-applicable interpretations.

Part of my career has been in the Teachers Pension, which i've paid for - great for me.

A relative of mine works in in 'private' sector and earns double what i get. She gets 40% tax relief on pension contributions and a range of other financial benefits. Great for her.

Because i'm so much younger than she is, i get to invest some of my earnings in a lisa. Great for me!

She will think it unfair that once she maxes out her 40% tax relief, she can't then take advantage of the lisa.

I will think it's unfair she earns double what i get and gets 40% tax relief.

In reality, it's a free country. If you don't like your job, change your job.

Meanwhile, invest, invest, invest. Acquire financial independence earlier, then it wont matter who else gets what.

The grass is always greener on the other side if the fence.

Take advantage of the opportunities available to you and avoid getting jealous.

crv1963

Oliver1191 wrote: »

In reality, it's a free country. If you don't like your job, change your job.

The grass is always greener on the other side if the fence.

Take advantage of the opportunities available to you and avoid getting jealous.

I couldn't agree more. I think it important to look at the overall package, headline salary+pension benefits+any other "perks" and then decide on the post.

It's no good being jealous of anyone else and their retirement provision, you simply have to make the best of what you can do for yourself. Few are fortunate enough to max out contributions to all the available products available so there is scope to save in tax shelters for the majority of people.

If you are fortunate enough to have a real choice between working either the public or private sector then great, most people don't have a realistic choice. A lot of people I know who have dipped between the two in my chosen profession haven't saved enough as a percentage of income while earning a larger private sector salary to make a difference to their retired self. That is only my experience.

marlot

Oliver1191 wrote: »

...The grass is always greener on the other side if the fence...

Take advantage of the opportunities available to you and avoid getting jealous.

I completely agree! The (civil service) department I work for has lots of vacancies. Anyone with the right skills is welcome to apply.


I've worked in the private and public sectors. Each has their benefits.

Muscle750

The root causes of the vast difference between the two sectors is as stated firstly there is no such thing as a public sector pension pot its all paid for by the treasury no matter what , and also the fact that the contributions made by the employer alone in the public sector out strip the combined contributions of both employer and employee in the private sector.
And what really gets my back up is when the public sector say "Oh we are paid less than the private sector" complete and utter !!!! as they get alot more paid by the employer into their pension which is in effect free money, courtesy of the tax payer............which believe it or not includes us in the private sector

ex-pat_scot

Muscle750 wrote: »

The root causes of the vast difference between the two sectors is as stated firstly there is no such thing as a public sector pension pot its all paid for by the treasury no matter what , and also the fact that the contributions made by the employer alone in the public sector out strip the combined contributions of both employer and employee in the private sector.
And what really gets my back up is when the public sector say "Oh we are paid less than the private sector" complete and utter !!!! as they get alot more paid by the employer into their pension which is in effect free money, courtesy of the tax payer............which believe it or not includes us in the private sector

It's not vast any more, but still statistically valid
https://www.bbc.co.uk/news/uk-politics-40480766




https://forums.moneysavingexpert.com/showpost.php?p=74889027&postcount=44

Terron

Back in the 80s when I was not eligable for the company pension scheme and was looking into getting one for myself, my sister, a teacher, 11 months younger than me said that her pension was compensation for her getting paid less. Then we compared what we were getting and she was on £200 a uear more than me.

I didn't mind her getting paid more, it was the attitude that I must be getting more because I was in the private sector that annoyed.

bostonerimus

It's a bit silly to compare a guaranteed DB government pension with a private sector pension as both the employer and employee contribution levels in the private sector are ridiculously low...when they amount to at least 20% of salary I think we can do a comparison.

To call public pensions gold plated makes them seem overly generous....why not present the public pensions as good and the private sector pensions as !!!! (rhymes with sap) and make the point that private employers and employees need to vastly increase their contributions, control expenses and probably manage the pension portfolios better.

All pensions should be funded from contributions and managed by competent trustees, whether DC plans can be sensibly managed by the employee is an open question. It should be pretty easy, but bad markets and panic can make fools of us all. Of course this approach will mess up a lot of accounting and budgets.

hyubh

Terron wrote: »

Back in the 80s when I was not eligable for the company pension scheme and was looking into getting one for myself, my sister, a teacher, 11 months younger than me said that her pension was compensation for her getting paid less. Then we compared what we were getting and she was on £200 a uear more than me.

Why were you the appropriate comparator? If you weren't eligible for your own company's scheme at the time, then other things being equal I'd assume you weren't in a middle class occupation.

I didn't mind her getting paid more, it was the attitude that I must be getting more because I was in the private sector that annoyed.

Of course simply working in the private sector didn't mean you were paid more! The claim was that working in a job that required a similar level of credentials and had a similar status was paid less.

Terron

hyubh wrote: »

Why were you the appropriate comparator? If you weren't eligible for your own company's scheme at the time, then other things being equal I'd assume you weren't in a middle class occupation.

I was a programmer. I'd started as a graduate trainee and had had several promotions. The pension scheme was only open to managers.

Of course simply working in the private sector didn't mean you were paid more! The claim was that working in a job that required a similar level of credentials and had a similar status was paid less.

It was my sister who was assuming I was paid more, and she was using that to justify her pension. She had no management responsibilities either.