Rhetoric media on state gold plated pensions

Altior

Andy_L said:

Altior said:

jimi_man said:

The gold plated pension aspect is rather difficult for me. On the one hand I can see the 'considerable' expense by the tax payer, in a time where a squeeze is coming. On the other hand I have been a recipient of a what would probably be termed reasonably gold plated pension. I've been in receipt of it since I retired (from that employment) when I was 51 and it's uncapped CPI. It's around £32k and I paid into it for 30 years. I do appreciate that it's pretty valuable, and at the moment I'm extremely thankful that it's uncapped. I have a Civil Service pension (Career Average) that's nowhere near as valuable, though that is also uncapped.

(One aspect that I hadn't considered is that with two years of these inflationary rises on both pensions, plus on my state pension when I get it, coupled with the freeze on tax thresholds, may push me into the 40% tax bracket slightly which I also appreciate is a rather niche problem.)

In principle I was in agreement with the public sector pension changes, though it could be seen as rather 'I'm alright Jack'.

I don't know what the answer is. 

Well public sector pensions are a relic of a bygone era. Obviously many people expect to live well into their dotage nowadays, especially many civil service retirees, whom were button pushers (I am also a button pusher).

It has been far too slow, but changes have been made to state pension ages and gender alignment, which of course will inevitably be pushed further out.

The higher echelons of the public sector/establishment makes decisions about itself. They are all happy that the (bloated) HoL attendees get over £300 a day tax free for signing in, as to a man they all have designs on a seat on the gravy train. Turkeys don't vote for Xmas so it won't be changing in a big way any time soon. Akin to fat cats on boards, I'll scratch your back, you can scratch mine. 

As far as I can see, very little has been done to ensure public sector pensions reflect the reality of living in the 21st century.

There is no resentfulness or bitterness from me, I could get a job in the public sector and benefit from the pension arrangements. If all I cared about was enjoying a good pension and stopping work early in my life, that's probably what I would do. 

Would you rather pay them a salary & expenses instead?

Expenses yes. Salary no. There are more than enough people in the country who would willingly sit in the house as a privilege in of itself, and give back. 

There is no perfect system, but the current one needs desperate reform. You basically get politicians putting their mates in, with a few token genuine appointments as cover. The house has a huge liberalist majority, so is out of line with the majority of public sentiment in many important areas. 

I'm reluctant to turn this into a direct political thread however. The main gist is that all of the legislators are part of the very establishment that makes decisions about its own pension remuneration. So they aren't going to suggest anything that would diminish or jeopardise what they expect to receive, never mind actually bring it into the 21st century.

zagfles

QrizB said:

sheslookinhot said:

QrizB said:

sheslookinhot said:

Andy_L said:

Altior said:

The higher echelons of the public sector/establishment makes decisions about itself. They are all happy that the (bloated) HoL attendees get over £300 a day tax free for signing in, a

Would you rather pay them a salary & expenses instead?

Better to abolish them.

... then pay their replacements a salary and a pension?

I meant the HoL. No replacements necessary.

You'd prefer a single legislative house?

It's an opinion, I guess, but have you thought this through?

The HoL has been geting too big for its boots in recent years, they're not supposed to vote against the elected HoC on finance issues ("no taxation without representation") or on issues the winning party had in their manifesto, as that would be anti-democratic, but they have done on several occasions. If they're going to carry on in this anti-democratic fashion, then they should be abolished.

But not sure a second elected chamber is the answer, then you end up with lame duck governments who can't do anything, not even get a budget through, and the sort of stalemate you get in the US and brinksmanship with possible govt shutdown etc.

sheslookinhot

QrizB said:

sheslookinhot said:

QrizB said:

sheslookinhot said:

Andy_L said:

Altior said:

The higher echelons of the public sector/establishment makes decisions about itself. They are all happy that the (bloated) HoL attendees get over £300 a day tax free for signing in, a

Would you rather pay them a salary & expenses instead?

Better to abolish them.

... then pay their replacements a salary and a pension?

I meant the HoL. No replacements necessary.

You'd prefer a single legislative house?

It's an opinion, I guess, but have you thought this through?

Yes, it’s an unnecessary expense and being filled with government stooges, Mone, Davidson to name a few, to do their bidding. God knows who Johnson has or will give a peerage to. No doubt for favours received now or in the future.

Its an archaic system and has no place in a modern democracy.

CorseyEdge

gm0 said:

Just end remaining unfunded DB indexed accrual where the bill is PAYG on the way out and replace those pensions for new accrual.  

The cost to the taxpayer of the unfunded public service pensions is less than 0.2% of GDP... 0.2%. That seems relatively sustainable and far, far less significant than say losing 4% of GDP due to EU exit.

Personally I think there are far more important things for the UK to gnash its teeth on than the inconsequential cost of post-retirement benefit to those that spent much of their life serving their country.

zagfles

hyubh said:

It has been far too slow, but changes have been made to state pension ages and gender alignment, which of course will inevitably be pushed further out.

Public sector pension schemes, in general, didn't discriminate by sex in the first place - so Barber equalisation in the 90s wasn't a thing for them.

All contracted out pension schemes discriminated by gender pre 1997. It was the law, they had to! GMP is calculated differently for men and women due to the previous different state pension ages (60 for women and 65 for men), schemes had to use the calculation prescribed by law, and that calculation differed by gender!

The scheme total benefits may not have discriminated, most private sector scheme didn't, but as the GMP element was calculated differently this led to different outcomes for men and women depending on circumstances. In particular, with a deferred pension, the GMP revalues at a different rate, so a man and women with identical age, service etc who leave on the same date will initially have the same total pension, but the GMP element would be different, and due to the GMP having different revaluation rules the pension would revalue differently between leaving and the pension being taken. Also once in payment the indexation would be different.

It's a legacy of the numpty Labour govt of the 1970's. First they pass the sex discrimination law in 1975 telling employers "thou shalt not discriminate", but didn't apply it to themselves, ie to state benefits like the the state pension. They maintained unequal state pension ages with no plans to change them. On it's own this was hypocrisy, but didn't cause a problem for occupational pensions. Employers musn't discriminate, but the state can. Do as I say not as I do. Fine.

But in 1978 they introduced SERPS for the many people who didn't have an occupational pension. But as a lot of employers already had an occupation pension, they allowed these employers to "contract out" of SERPS, basically replicate as a minimum the benefits of SERPS in their scheme. As they were replicating a discriminatory state benefit, employers didn't see this as them discriminating, they were replicating a state benefit which discriminated! They HAD TO discriminate, they didn't have a choice.

So employers were caught between the legislation for calculating GMPs, which forced them to calculate it differently for men and women, and the sex discrimination act, which said all elements of pay should be equal! It was impossible for them to obey both laws! And now they (or their pension schemes) are stuck with the legacy of all this and making ridiculously complicated "GMP equalisation" calculations.

german_keeper

Or receive lower salaries in exchange for the raft of other benefits that come with working for the state. 

Civil servants already do, not sure about other public sector workers. This is from the scheme guide when it was non contributory. 

"Your pension, together with your pay, forms part of your total remuneration package. Although there is no overt contribution towards the PCSPS, salaries are set at levels which take account of the value of the benefits provided by the Scheme."

Furthermore salaries were not increased when the scheme became contributory. Also as part of your master plan what happens to public sector workers on minimum wage. Maybe a lower rate but a round of applause once a week?

Altior

From April next year, stop all public sector pension accrual dead, and make it the auto enrolment rate going forward. The difference in implied benefit gets added to gross salary (they keep any accrued DB entitlement). Employees can then make their own arrangements, in addition to the 3% as they see fit. Let's see what their salaries would be then. 

zagfles

CorseyEdge said:

gm0 said:

Just end remaining unfunded DB indexed accrual where the bill is PAYG on the way out and replace those pensions for new accrual.  

The cost to the taxpayer of the unfunded public service pensions is less than 0.2% of GDP... 0.2%. That seems relatively sustainable and far, far less significant than say losing 4% of GDP due to EU exit.

Personally I think there are far more important things for the UK to gnash its teeth on than the inconsequential cost of post-retirement benefit to those that spent much of their life serving their country.

That seems to be based on the effect on the "current account", ie what's going in compared to what's going out. Which is useful for some purposes but not for understanding the cost of the liabilties being buit up. The £49.7 billion beig paid out is paying for historical liabilities (to existing public service pensioners) and the £47.2 billion being collected from existing public service employees and employers is creating future liabilities. The difference between the two is meaningless in terms of liabilities being created and settled, unless you treat it as a Ponzi scheme!

NedS

Altior said:

From April next year, stop all public sector pension accrual dead, and make it the auto enrolment rate going forward. The difference in implied benefit gets added to gross salary (they keep any accrued DB entitlement). Employees can then make their own arrangements, in addition to the 3% as they see fit. Let's see what their salaries would be then. 

Well, a 30% plus pay rise would certainly be more palatable than the 2% on offer. How do I vote for you

CorseyEdge

Altior said:

From April next year, stop all public sector pension accrual dead, and make it the auto enrolment rate going forward. The difference in implied benefit gets added to gross salary (they keep any accrued DB entitlement). Employees can then make their own arrangements, in addition to the 3% as they see fit. Let's see what their salaries would be then. 

Why would you do that? Can you outline the benefits, financial and economic reasoning behind that approach?

Would also be interesting to see a worked example of say an NHS Nurse on £34,000 pa, if you have one?