Gold plated public sector pensions

hyubh

Terron wrote: »

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

Presumably you now earn well above her then...?

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.

Still not what the claim was/is about... Classic case would be a librarian, on poor pay but with a securely middle class status.

Terron

hyubh wrote: »

Presumably you now earn well above her then...?

Well she stopped working whilst her kids were young, went back to work but has now officially retired, though she does maternity covers and tutoring. I had only one pay rise of 3% this millenium, lost my job in 2013, and now make £25-27k pa from property. Probably I earn more now, but not significantly more before she had kids,

My other even younger sister was a teacher, moved in to local government and earns more than both of us.

My niece who is training to be an actuary with one of the big accountancy firms also probably earns more than both of us.
I should get closer next year when I get my private pensions on top of my property income.

Still not what the claim was/is about... Classic case would be a librarian, on poor pay but with a securely middle class status.

That is irrelevant to my point, which was about the assumption by some people in the public sector that private sector jobs are better paid and therefore better public sector pensions are justified. Btw a head librarian can earn £60k. Allowing for inflation and including overtime I passed than in only one year.

fred246

People have paid into pensions their whole working life. When they took the job they agreed to the deal on offer. So you can't take pensions off people. So what does the original website actually want to happen? They argue that all new employees should pay into DC pensions. So the government would then have to pay current pensioners but have no income from current workers. So current taxpayers would have to pay more tax. That would really upset Muscle750. It would take at least 80 years before all the current public sector workers had died and the government would then have no income and no expenditure on public sector pensions.

hyubh

Terron wrote: »

Well she stopped working whilst her kids were young, went back to work but has now officially retired, though she does maternity covers and tutoring.

I had only one pay rise of 3% this millenium, lost my job in 2013

No offence, but not a very successful programmer then?

, and now make £25-27k pa from property.

So comparing your occupational pension situation with your sister's truly is not worthwhile...

My other even younger sister was a teacher, moved in to local government and earns more than both of us.

My niece who is training to be an actuary with one of the big accountancy firms also probably earns more than both of us.

Good for both of them!

That is irrelevant to my point, which was about the assumption by some people in the public sector that private sector jobs are better paid and therefore better public sector pensions are justified.

Your point is empty when the private sector worker you're comparing to (yourself) has no relevance to the original claim.

hugheskevi

I don't think any meaningful statements can be made about the 'private sector' and the 'public sector' as a whole. Both sectors are vast.

Lumping together doctors in London with environmental health officers in Wales, border force officials in Scotland, badger shooters in the south west and jobcentre workers in Liverpool (along with many more) to try to determine whether as a whole these workers are under or over paid relative to the private sector seems completely meaningless. Some will be paid better and some worse, even after controlling for a plethora of differences such as skill, region, age, sex, tenure, etc.

The private sector is similarly diverse, probably even more than the public sector.

One of the easiest ways to close the headline public/private sector pay gap would be to in-source all the out-sourced functions (cleaning, maintenance, etc) that the public sector has outsourced in the last few decades, as outsourced functions tend to be lower paid. That wouldn't meaningfully change anything though.

To the extent any generalisations can be made, they have to be broken down by skill/qualification level and location as a minimum.

Studies that do this consistently conclude that lower skilled public sector workers outside London and the south east are overpaid relative to comparable private sector jobs, whilst higher skilled workers in the public sector in London and the south-east are underpaid relative to the private sector. That is partly due to the largely national pay structures that apply in the public sector, with perhaps just a small London weighting (which can apply a surprisingly far distance from London).

woolly_wombat

hyubh wrote: »

No offence, but not a very successful programmer then?

No offence, but perhaps you are not aware that ageism is rife in the IT industry, or that there has been a notable increase in outsourcing to countries such as India?

https://www.channel4.com/news/is-the-it-sector-guilty-of-ageism

DairyQueen

fred246 wrote: »

So you can't take pensions off people.

There are many examples of taking 'pensions off people':

- Private sector employees whose schemes end-up in the PPF.
- Millions who were contracted-out have lost indexation on GMP in payment.
- Fees historically applied to DC schemes were so high that they swallowed any investment return, and sometimes to the point where charges reduced the original capital invested.
- Number of years of NI credits required for a full SP has now increased from 30 to 35.
- State pensions for those retiring post April 2016 no longer include survivor benefits.
And the classic...
- Increase the scheme/state retirement age.
Just a few examples.

fred246 wrote: »

So what does the original website actually want to happen? They argue that all new employees should pay into DC pensions. So the government would then have to pay current pensioners but have no income from current workers. So current taxpayers would have to pay more tax.

'The government' doesn't pay for anything. They are just executives who manage the 'business' on behalf of the 'shareholders' (the electorate).

Current taxpayers are now paying the price for allowing the creation of unfunded schemes decades ago without applying due diligence on projected liabilities. The private sector equivalent would be compelling all of a company's current employees (regardless of whether they qualify for membership of the DB scheme) to pay the annual bill for the scheme's current pensioners, and to do so without any ring-fenced funds or any consideration for future liability.

The state pension operates similarly (i.e. it's 'unfunded') except that all members of the organisation (UK plc) are automatically enrolled, and all benefit. We have witnessed that governments are not beyond making big changes to our national scheme. Will the state pension remain affordable in its current format? I suspect not. Especially if the non-retired are compelled to pay higher and higher tax in order to fund the increasing annual cost of both state and public sector schemes.

What's the answer? Good question. Three broad options :
- Pay more tax to maintain current state and public sector retirement benefits.
- Borrow to fund ditto.
- Cut the benefits of one or both.

Can you imagine a scenario where working taxpayers in the private sector are expected to take cuts in their future state pensions whilst continuing to pay for the non-reduced benefits of future public sector retirees? That would be a step too far IMO.

The UK already offers one of the lowest state pensions in the developed world. The first and third options will be extremely unpopular amongst one/both sectors. The second is unsustainable.

My guess? A combination of stealthy changes, and delayed reductions in benefits, to both. The usual method of encouraging employees/the electorate to swallow nasty, economic pills is to use complicated methods of chipping away at benefits over many years, or announcing drastic cuts to benefits but deferred for decades.

The numbers no longer add-up. That's the nasty DB pill that the private sector has been forced to swallow over the last two decades. I suspect the same nasty pill will be forced down the throats of the public sector over the next couple of decades.

Terron

hyubh wrote: »

No offence, but not a very successful programmer then?

Maybe not succesful, but I was the best at what I did in Europe and among the best in the world. The products I worked on had been bought by our main competitor. They kept supporting our exisiting customers, but stopped new sales so it was in a gradual decline. The alternative jobs on offer were at a much lower level technically, and management never appealed to me. My more tranferrably technical skills such as COBOL programming were also not in demand after Y2K.

Your point is empty when the private sector worker you're comparing to (yourself) has no relevance to the original claim.

You have still not got it. I was not the one who made the original comparison. That was my sister. My point is that her assumption that because she worked in the public sector she was earning less and thus her better pension (compared to my then non-existant one) was wrong. She is not the only public sector worker to make that comparison. She is not the only public sector worker I have met to have made that assumption. She was the only one where I have been able to test it. We were both graduates, though she also had a teaching qualification. I had been working a little longer. It was not an unreasonable comparison, but the result was not what she had assumed.

Peelerfart

hyubh wrote: »

No offence, but not a very successful programmer then?

Clearly no idea of the industry.

CapricornLass

Never heard of up-skilling then? If you can't be bothered to keep yourself up to date (and the responsibility is yours, not your employer or any one else), then yes, you will find that your skills are out of date and no longer wanted. And that applies to other industries as well as programming.



Sorry, not much sympathy.