Will there be Pension apartheid?

Paul_Herring

kinger101 said:

I'd be careful reading during too many conclusions on specific professions, as many of the categories are quite broad.  Police Officers are lumped in with a lot of public services professions. 

I'd perhaps suggest that trawling Facebook and Twitter for hurty words to prosecute, following dog walkers with drones in the middle of nowhere, and demanding someone trying to have fun in fancy dress while having their daily exercise turn themselves in, so that they may  be "provide[d with] words of advice about the implications of his actions'" are, generally, not particularly dangerous.
Especially when the perception is that they're doing these things in preference to, for example, prosecuting shoplifters who steal less than a certain amount, chasing up drive-offs at petrol stations, or solving burglaries or muggings...

(Yes, I know parts of the jobs are dangerous. When they're seen to be doing those parts of the job.)

itwasntme001

kuratowski said:

You raised the LTA in the context of comparing the DB pension LTA against a DC pension LTA and noting the ratio is 1:20.  I was simply pointing out that this ratio is fixed in tax legislation.  It has nothing to do with the operation of the public sector pension schemes.  Any private sector DB pension is treated in exactly the same way.

Taxpayers' liabilities in respect of public sector pension schemes are valued by the Government Actuary's Department who sets the contribution rates to ensure these costs are recovered.  This information is in the public domain - all the accounts are published which include the GAD report and the contribution rates.

Never said otherwise.  But you seem to ignore my very valid point that the difference in LTA (which i agree is set by tax legislation) has an impact on the burden on the taxpayer to fund the db pension (all else equal).  Why don't you see any more db pensions in the private sector yet you still see this in the public sector, that too as i highlighted with an more generous LTA relative to DC pensions?

The key question I was proposing is whether the public sector employees contributions in real terms have increased in lockstep to the increasing expensiveness of index linked annuities in order to prove that the taxpayer burden has NOT increased in real terms over the last 30 years and therefore providing an evidence based answer to this whole debate; a debate which seems to be endlessly (and many times ignorantly) discussed with just opinions and no facts.

itwasntme001

If it can indeed be proven that the taxpayer burden has increased in real terms over the last 30 years - which i suspect it has - then lets not pretend that the NHS is the best efficient way to provide healthcare.  We are just pushing the costs into the future and that will have consequences to the level of services that will be provided.

ratechaser

- thread going a bit quiet
- troll stirs it up again with new post
- cue a flurry of 25+ new responses
- who's the winner here do you think?

(the irony of me adding to these responses is not lost, trust me...)

doris540

Firstly i did not leave the company resulting in my loss of our FS scheme it was stopped by the company . The resulting DC scheme which has just lost money obviously ive been in since we were transfered into it in 2009. and am still employed at the company. For the person who stated i spout etc . get off your platform . And for those that argue Public sector pay is lower thats why the pensions are as they are looking at the latest Civil service pay structure in banding and pay etc on the internet i fail to see where your coming from to be honest.. How do us in the private sector afford to put in the percentages that are paid by the public sector employer. If i could afford it believe me i would but what the end argument is which people just dont like or grasp is the fact that the employer percentages paid by the state ie the tax payer. Is compared to us is very unfair. In relation to the post about my DB pension remember i had no choice in the matter in it been stopped. Imagine what would of happened if when all the companies were stopping their FS schemes the government took the same view against the public sector and did the same. Doesnt take alot of working out. Look what happened when they tried to change the fire service pension they kicked off something cruel. I along with many others have great respect for people who do these jobs and i agree they should be suitably rewarded. However within the NHS there is also alot of dead wood and horrific wastage, of resources 

kinger101

ratechaser said:

- who's the winner here do you think?

Judging by OP's next post, certainly not paragraphs, punctuation, spelling or grammar. 

[Deleted User]

kinger101 said:

Deleted_User said:

zagfles said:

Deleted_User said:

Bravepants said:

I pay 7.3% or so into my pension, and my employer contributes about 22%. The 22% contribution is part of my salary package, and my take-home is lower than the private sector because of that. I know plenty in the private sector who drive new cars, own big houses, even fly planes but have little or no pension provision or emergency savings. I know people who run companies and have a lavish lifestyle while also contributing the absolute minimum into employees pension schemes and run zero hour contracts; it's THIS that needs to be redressed. If you work in the private sector, you are working for "The Man" and sometimes "The Man" sucks, but people still end up working for him because they are happy with what "The Man" provides, including their job or level of pay. Until somewhere down the line they realise that they are being hard done by, or have been prioritizing spending over saving, or have actually been screwed by "The Man"!

In reality, public sector gets paid more than the private sector (including pension contributions). Reference: https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/articles/analysisoffactorsaffectingearningsusingannualsurveyofhoursandearnings/2017
And it is the man from the private sector who pays the public sector guy’s salary in the first place. And picks up 100% of the risk for the public sector guy’s pension guarantees. 

It’s unfair, thats all. 

Risk comes in lots of different forms. A policeman, firefighter or nurse takes risks in their jobs I don't, and I would much rather take a risk with my pension than my life. Jobs pay what they pay (including pension), so as keeps being said, anyone that thinks it's "unfair" should apply for a job in the public sector. Simples. It's not like people are born into public sector emloyment. Well not usually, there are some obvious exceptions!

The real issue though is understanding the value of public sector pensions, which lots of people don't including some public sector employees themselves. We get a lot of posts here about people thinking of opting out! They are usually persuaded not to. And lots of clueless FB memes going round about nurses pay and comparisons with other professions, taking no account of the values of their pension.

Here is the list of jobs with the highest risk. 9 out of 10 are in the private sector. Only healthcare made it to number 6. 

https://www.jmw.co.uk/services-for-you/personal-injury/blog/uks-top-10-most-dangerous-industries-work

The source data is here
www.hse.gov.uk/statistics/tables/ridfatal.xlsx

I'd be careful reading during too many conclusions on specific professions, as many of the categories are quite broad.  Police Officers are lumped in with a lot of public services professions. And there's the added issue that there's a lot of noise in yearly data as in some jobs as deaths can occur sporadically in relatively large numbers.   And even if they did split the data into single professions, calculating the rate from a small n say for saturation diver (or these days, even miner) wouldn't be reliable.

But it's certainly true that there are a lot of people doing relatively dangerous jobs that are essential and employed in the private sector.  E.g providing our food and energy.  So creating a false dichotomy based on service element of public sector jobs doesn't really create a justification for DB pensions.   

Things are the way they are for historical reasons rather than out of fairness.  But everyone agreed to the terms of the contract of the job they're in, including the pension arrangements.  

Thats true. Yet we still have the conceptual problem of Humphrey Appleby collecting money from the poor corner store owners with hardly any pension provisions beyond State pension and using them to award a lovely little pension nest  to himself. Which store owners own a part of which is called “100% of the downside risk”. 

If I were a Dictator, I would turn civil service pensions into a transparent DC version and taxpayer contribution would be directly linked to average company contributions in the private sector. 

JoeCrystal

Deleted_User said:

If I were a Dictator, I would turn civil service pensions into a transparent DC version and taxpayer contribution would be directly linked to average company contributions in the private sector. 

The average total contribution rate was 5.0% of pensionable earnings, split between members (2.7%) and employers (2.4%) back in 2018. However, the auto-enrolment rules will eventually bring both percentages up. Still, it does highlight that for most employers in the country, paying pension contribution is something of a novelty until the auto-enrolment rules kick in.

doris540 said:

How do us in the private sector afford to put in the percentages that are paid by the public sector employer.
...
In relation to the post about my DB pension remember i had no choice in the matter in it been stopped. Imagine what would of happened if when all the companies were stopping their FS schemes the government took the same view against the public sector and did the same

To be fair, the government already ended the final salary pension schemes, but the CARE schemes are still very generous, especially if a worker is on the same real-life income for the entire working life. But ultimately, I reckon that the government will close all unfunded pension schemes in the future (apart from the military). But many actual funded schemes like LGPS, Bank of England (which is still non-contributory although it is only 1/95th of your annual salary), Members of Parliament and few others which escape my mind will keep going.

I am currently saving about 20% of my salary into my pension schemes, and it is a quite painful choice, but I can afford it, barely. But it is a conscious choice that I want to make sure that I have a comfortable retirement a few decades down the line. The trouble is that most people do not care about pensions until it is much closer to their retirement or rather have more 'important' items to focus and spend on.

I do not have any issues at all with the public sector pension schemes, and even less so with the funded schemes, especially I may want to work in the public sector in the future. What I do get disappointed about is the fact many workers do not understand the values of their valuable DB pension schemes and want to opt-out!

itwasntme001

Taking a look at the NHS pension liabilities from the official government accounts, unfortunately the data only goes back 10 years or so, so would not provide anywhere close to a definitive answer to the question i posed that would help us come closer to resolving this debate.

Net pension liabilities did increase considerably over the 10 year span from around £200bn in 2009 to £400bn in 2015 to £530bn currently.  The big recent increase was presumably following brexit after which real rates fell to negative territory and therefore reducing the discount rate.

Annual employee contributions also increased, from an annual amount of £180m in 2009 to £300m in 2015 to £360m currently.

Clearly the scheme continues to be unfunded (paid for by the employee contributions and taxpayer) and the liabilities are growing which is not a good thing.

Unless we get meaningfully positive real rates due to real growth (and not due to a debt crisis!), it looks like the most probable outcome will be higher taxes/inflation over the coming decades.

One thing is for sure - the 80s were a great time to be a junior doctor - they have milked it.  Not too sure now is a good time however.

atush

cloud_dog said:

I'm not a member of a public sector scheme, and I don't have a problem with those who benefit from them.

Me too