Is it fair that Govt employees get DB and private sector employees DC (in general)

JoeCrystal

Is it fair? No, it is not fair, but four points temper my understanding.

1. The median payment to pensioner member is around £5,600 per year according to the Hutton Report in 2011 and still likely to be the case in today's term although I can't find more recent figures and that the retirement age is linked to SPA now. I do recall that LGPS median pension payment is even much lower. So at least a majority of the public sector pension, it doesn't pay out that much.
2. Employees are paying ever-increasingly contribution rate and that any future inevitable reforms will make it less generous
3. It is still open so should I manage to get a job in a public sector, ideally in the Local Government (which got the funds) then I can join it and maybe transfer in a pension pot that I been building up since 2010 as well.
4. It is not the fault of the people working in the public sector, but instead, it is the MPs and the Government who decided that this should be the case that such schemes should still be funded. Interestingly enough, the Hutton Report rejected replacing the schemes with DC pension schemes. This is because of the cash flow issue for the Government and that the members of such schemes may be confused and finding it challenging to manage their funds and not knowing what is the promised pension is from the DC scheme... 

Mick70 said:

Why not join the public sector if feel so aggrieved ? 

Well, should I lose my job in the coming months in the worst-case scenario , I will undoubtedly be looking for a role in the public sector as it got much better terms and conditions generally speaking! I am still keeping an eye out for a part-time job atm. 

ian1246 said:

All that for my fantastic record breaking £1600 a month - after 5 years of service (5 lots of pay rises). My "Gold Plated Pension" which some of you seem so very bitter about me getting in another 30 years time (I m 30years old) involves a "Tiny" contribution from myself of 13.7% Gross Pay - how many of you pay similar into your Private Pensions? That Pension is about the only thing which my Job has going for it in terms of finance.

That pension will have been more than earnt by the time I get it. Those of you who think you are entitled to have any input into it... your not. If you want a pension like it - get a grip, take responsibility for your own future and finances and make it happen. Don't go criticising others well earnt and deserved pensions.

It is a reasonable contribution rate though for all the bells and whistles included ill-health retirement, and you can even draw on your pension unreduced at 60, unlike most other public sector pensions which are linked to SPA. You do clearly understand the value of the DB pension, and you and everyone else working in the public sector do deserve such pensions

But what does make me exasperated is that there are always some people/posters who do not recognise just how valuable these DB pension schemes in both the private and public sectors and never joined or opted out. I am paying 22% of my salary / £517 per month gross (including 3% Employer), and I still don't think it is enough for a comfortable retirement 34 years down the line and often, I do wonder if it is really worth it. But I do admit that I am myself is a bit of an outlier as young thirties someone who got a genuine interest in pension provision. So I will do my best to convince others to join the DB schemes if any available, usually, by comparing the costs on both sides of the equation. I just hope that in the long run, the employer will be forced by the Government to contribute even more than 3%, so make the retirement provision a bit better in the private sector.

Moby

ian1246 said:

I m a serving Police Officer. I ve been in the job for 5 years and my take home pay is about £1600 a month after deductions - including Anti-Social Pay. For my job, I get to go and deal with individuals who want to actively hurt me. I have been spat on, I ve been assaulted a number of times. I deal with Public Order Incidents where there is a not inconsiderable risk to myself and colleagues if it goes wrong - including the potential for death. I deploy to horrific RTC's (worst one was deploying to a Riot 60+miles away, in full Code 1's - Riot Gear - only to come across a fatal 3 way RTC which had just happened. Had to crawl into the back of the crushed vehicle and hold the driver's head for 1+hour, in horrific cramped conditions with my pads digging into my groin and legs, whilst fire cut the vehicle out around us - all while the cocker spaniel which had been travelling in the front footwell of the passenger seats screamed in agony due to its broken back). 

I deliver death messages and comfort the grieving families. I routinely witness Child Abuse Images and walk into living conditions you wouldn't deem fit to keep animals in - as well as going to sudden death's which may or may not be recent, exposing myself to horrific smells, rotten flesh, rotten bodily fluids and images which I will never forget.... and I routinely work 11+hours without any sort of break, routinely have my shifts extended or altered without prior notice and my Rest Days (Days Off) Cancelled with next to no notice - regardless of what plans myself or family had. Now... we get to deal with Covid 19, with myself and colleagues likely at a greater chance of catching it than most.

All that for my fantastic record breaking £1600 a month - after 5 years of service (5 lots of pay rises). My "Gold Plated Pension" which some of you seem so very bitter about me getting in another 30 years time (I m 30years old) involves a "Tiny" contribution from myself of 13.7% Gross Pay - how many of you pay similar into your Private Pensions? That Pension is about the only thing which my Job has going for it in terms of finance.

That pension will have been more than earnt by the time I get it. Those of you who think you are entitled to have any input into it... your not. If you want a pension like it - get a grip, take responsibility for your own future and finances and make it happen. Don't go criticising others well earnt and deserved pensions.

I think the thread dried up after this one! We'll see in the coming months how crucial our public services are.

doris540

 And remind me what they tried to do to the fire service ,greatest admiration for the police person on here.and the last comment they made "Dont go criticising others well earnt and deserved pension"  Obviously us in the Private sector dont deserve a decent pension..

Ref44

As a retired police officer (since 2009) I can see both sides. The big issue that is causing the problems is the failure of the government to take proper account of increasing lifetimes. When I joined the job in 1979, weekly Police Notices were invariiably headed with notification of the deaths of police pensioners. A lot of these individuals were surviving for less than 5 years after retirement. Today a good proportion of my ex colleagues are hoping to join the 30/30 club; ie paid for pension for 30 years and hope to draw it for the same period.

The same problems impacts the State Pension. Look at how little you have to invest by way of voluntary contributions to get an exta year on your NI record. The payback period for a standard rate taxpayer is around 4 years.

GunJack

doris540 said:

   Obviously us in the Private sector dont deserve a decent pension..

No-one, including the public sector staff both former and current on here, is saying or suggesting anything of the sort. The private sector DB schemes that were pulled by the companies concerned may or may not have been influenced by the actions of a certain Chancellor, but those decisions were made by the companies concerned They were in no way enforced by the actions of public sector employees.  

princeofpounds

Mick70 said:

@princeofpounds DB LTA calcs are x 20,  not x 16 , And add on any lump sum 

Sure, I was talking about both the lifetime and annual allowance, just looked up one quickly as they do change over the years.
And why wouldn't you add on any lump sum? It's a lump sum of cold hard cash.
20x, 16x... it's not that important, as it's quite different to the ~66x private sector employees face to access the same annuity benefits.

GunJack said:

princeofpounds said:

I was merely refuting the baseless point that gets made countless times that 'the public sector gets paid less so higher pension entitlements are ok'.

So how come, when I came out of the CS and into private sector I got a 20% pay rise and a DB pension scheme? For less responsibility..and that was not unusual. It makes those studies seem to be a bit, well, wrong....

You expect anyone to take your personal anecdote seriously?

waveydavey48

ian1246 said:

I m a serving Police Officer. I ve been in the job for 5 years and my take home pay is about £1600 a month after deductions - including Anti-Social Pay. For my job, I get to go and deal with individuals who want to actively hurt me. I have been spat on, I ve been assaulted a number of times. I deal with Public Order Incidents where there is a not inconsiderable risk to myself and colleagues if it goes wrong - including the potential for death. I deploy to horrific RTC's (worst one was deploying to a Riot 60+miles away, in full Code 1's - Riot Gear - only to come across a fatal 3 way RTC which had just happened. Had to crawl into the back of the crushed vehicle and hold the driver's head for 1+hour, in horrific cramped conditions with my pads digging into my groin and legs, whilst fire cut the vehicle out around us - all while the cocker spaniel which had been travelling in the front footwell of the passenger seats screamed in agony due to its broken back). 

I deliver death messages and comfort the grieving families. I routinely witness Child Abuse Images and walk into living conditions you wouldn't deem fit to keep animals in - as well as going to sudden death's which may or may not be recent, exposing myself to horrific smells, rotten flesh, rotten bodily fluids and images which I will never forget.... and I routinely work 11+hours without any sort of break, routinely have my shifts extended or altered without prior notice and my Rest Days (Days Off) Cancelled with next to no notice - regardless of what plans myself or family had. Now... we get to deal with Covid 19, with myself and colleagues likely at a greater chance of catching it than most.

All that for my fantastic record breaking £1600 a month - after 5 years of service (5 lots of pay rises). My "Gold Plated Pension" which some of you seem so very bitter about me getting in another 30 years time (I m 30years old) involves a "Tiny" contribution from myself of 13.7% Gross Pay - how many of you pay similar into your Private Pensions? That Pension is about the only thing which my Job has going for it in terms of finance.

That pension will have been more than earnt by the time I get it. Those of you who think you are entitled to have any input into it... your not. If you want a pension like it - get a grip, take responsibility for your own future and finances and make it happen. Don't go criticising others well earnt and deserved pensions.

Hi Ian.
I have nothing to add to the debate but I just want to say a heartfelt thank you to you and your fellow officers for your service. I don't think most people have any idea what you guys (and ladies) go through on a daily basis. You are worth every penny you get, and more. Thank you. 

steampowered

doris540 said:

Personally i had my FS scheme took from under my feet in 2005 transfered over into  a DC scheme with a miserly 5%  paid by employer 

Did you read the post from the police officer that pays 13.7% of his salary into his pension? 

Your employer's 5% plus 13.7% from you would be 18.7% of salary going into your pension each year. That's plenty. Not even taking into account the tax relief you get on it.

You can also have an excellent pension by putting 13.7% of your salary into your pension. If you choose to spend now rather than saving for later, don't complain if your retirement pot is less than you'd like.

[Deleted User]

1. The issue isn’t contribution from the employee. The issue is contribution from the taxpayer. 

2. The taxpayer contributes 31% to police pensions (if we take one example). That’s a lot. 
3. This is only part of the benefit. The other part is that the taxpayer takes on 100% of the risk. 

It’s not really “unfairness” that is the problem. For me the problems are lack of transparency on how public servants are remunerated and the burden on public purse during the times of crisis.  There was a reason private companies gave up on DB. Worked very well during good times. Whenever a crisis came companies were effectively bankrupt because of DB pensions. Right now lots of local authorities in the US could go bankrupt, Detroit style, because of DB pensions. They rely on 8% growth to stay solvent. -50% isn’t going to help them. When bankruptcy  happens, retired workers get screwed, but there could also be an impact on the whole financial system.

Thrugelmir

Deleted_User said:

2. The taxpayer contributes 31% to police pensions (if we take one example). That’s a lot. 

That's somewhat misleading. My old quasi public sector employer contributed on the face of it 26.2% of gross salary. When in reality 7% of this contribution was effectively a levy to cover existing liabilities.