Pensions take a hit

[Deleted User]

Universidad said:

IAMIAM said:

The public sector pensions should just be one big pot in my opinion. 
Why is it that civil service pensions (ie alpha and every politician) is allowed to pay the least amount in amongst ALL government pensions and have the best accrual rate amongst ALL government pensions. Yet police, teachers and nurses have to pay a lot more in and have a worse acrual rate. Surely its ALL public service. 

Police and Fire Service get earlier NPA than Civil Service by a long way, and that's expensive. And there's arguably a reason why they retire earlier. Turns out one size does not fit all!

Deleted_User said:

What isn’t included is risk.  If a Civil Servant’s pension liability exceeds provisions then a shop assistant from ALDI gets to pick up the bill. 

Public sector pay rises have been in the toilet for nearly 15 years because the country bailed out the banks.

Don't give me a line about the private sector absorbing the public sector's risk. I've literally spent my whole career paying off the private sector's profligacy.

This is moving onto a completely different topic.  My understanding is that most of the 2008 bank rescue package has been recouped and that the cost was 33 bn, or approximately 500 quid per person.

It is true that large banks tend to be backed up by the state and therefore carry a risk to the taxpayer.  Annual Corporation tax receipts from the banking sector are 5.5bn so there is that to keep in mind if you’d rather let the banks die. Financial sector, while important, employs around a million out of 27 million, so not really representative of the private sector in general. 

Universidad

IAMIAM said:

Bailed out the banks? I am sick of hearing this too, we've moved on since 2008! As have the pockets of a lot of people in embroiled in government contracts 

I'd be happy to move on, if my salary had caught back up again, like the private sector apparently did.

And you being sick of hearing about it is kind of the point. You've got a lot to say about public sector pensions, which is a story as old as time, but as soon as you hear a counter argument that skewers your argument, it's yesterday's news.

Deleted_User said:

My understanding is that most of the 2008 bank rescue package has been recouped and that the cost was 33 bn, or approximately 500 quid per person.

The cost of the quantitive easing alone is more than 33 billion annually now that interest rates have risen.

And even if you were right that the average cost was 500 per person, then public sector workers on 10 - 25 percent real terms pay cuts over that period have obviously eaten the lions share of it, which kind of proves the point about the public sector paying for the private sector's irresponsibility.

[Deleted User]

It really doesn’t to me because I can’t even follow what you are trying to say and how QE is relevant to the topic. 

jimi_man

IAMIAM said:

The public sector pensions should just be one big pot in my opinion. 
Why is it that civil service pensions (ie alpha and every politician) is allowed to pay the least amount in amongst ALL government pensions and have the best accrual rate amongst ALL government pensions. Yet police, teachers and nurses have to pay a lot more in and have a worse acrual rate. Surely it’s ALL public service. 

It’s because the different schemes have slightly different benefits according to the perceived needs of the employees. The Civil service for example has a lower contribution rate but also has a lower enhancement rate (CPI only). The police have a higher accrual rate, earlier pension age (60) and better enhancement rate (CPI plus 1.25%). Nurses and teachers also have different variations too, even higher enhancement rate but lower contribution rate than the police etc etc. 

The MPs scheme has a higher contribution rate (11%) and a lower accrual rate (1/51) than the Civil Service but still only CPI enhancement and NPA of SPA. 

Apples and oranges. 

Nebulous2

SouthCoastBoy said:

Looks as if you need to be earning around 45k before paying 10% contributions in nhs https://www.nhsbsa.nhs.uk/member-hub/cost-being-scheme

And teachers around 46k,https://www.teacherspensions.co.uk/employers/managing-members/contributions/calculating-contributions.aspx, although not everyone in the classroom is on the teachers pension I.e teaching assistants, they are in the lgps scheme

9.8% from £29k for nurses, which falls short of 10% but is enough for some staff to opt out of the pension scheme. It's a significant contribution if people are juggling rent, utilities, travel costs, childcare etc. 

The whole salary based contribution rate feels slightly odd. I'm part-time paying 9.8% at the bottom of a salary point. Those at the top of the previous salary point have the same accrual rate for a lower contribution, on very little difference in salary. It is a disincentive for people to take more responsibility when the take home shows very little difference.