HBG

I've just read that the first person to live to 150 is already born. That made me sit up and think. Could it be me? I'd need a few parts replacing along the way, but I don't mind that.

Domino

wouldn't that be like moving to Spain.......everyone you know and love has died and all around you are scared to upset you in case you die on their watch.

Lynn R

Can I just point out that public sector workers are taxpayers too, and thus contribute extra to their pension schemes over and above their monthly contributions - they also buy goods and services from companies in the private sector and thus contribute to the pensions of private sector workers as well.

Instead of knocking the pensions received by public sector workers, isn't it about time we started campaigning for private sector companies to provide decent schemes for their workers as well, instead of just wanting to reduce everyone to the lowest common denominator?

I agree with you that many people are unable to save for a decent income in retirement, so why get rid of the few remaining schemes that enable people to do so.

agoreira

I think I already knew that, but the tax payers contribution to public sector pensions is almost three times that paid by the members themselves, 14% and 5%. Public sector workers will still get a pension for life, a career average final salary scheme is something that is now becoming extremely rare in the private sector and something to be grateful for. Yes, it would be great for the private sector to have something similar, but who is going to pay for it? Can you see the government pumping 14% into everyone in the private sector?

johnnyone

It used to be that salaries in the public sector were less than the private sector and that was always the argument for retaining the final salary related pensions for public sector workers. That is not now the case with public sector salaries outstripping the private sector. Add to that higher absenteeism rates (Almost obligatory to use up sick leave?) and job security. Despite what is currently being purported jobs are far more secure in the public sector.
In addition to that it is a well known fact that in the last couple of years before retirement employees were promoted to enhance the benefit of a final salary related pension.
If you are paid c£20000 pa the full cost of employment would be around £28600 in the public sector against £23500 in the private sector.
If you then factor in weeks worked in a year 44 public, 46 private you can establish a weekly cost comparison of £650 per week against £510 per week.
It is this imbalance that is now being recognised by the general public that needs to be addressed.I personally cannot see that the public sector will get much support from the private sector on this issue.
For whatever reason the country is in the mess it is in and can only spend what it can afford with every sector taking the pain not just the private sector.
This may make me sound like a right winger (or whinger but that is not the case. I just believe that currently the balance is unfair.

Lynn R

But how come companies like BP, Shell, Centrica, all the major banks, etc. who are making billions in profits annually can claim they cannot afford to fund decent pensions for their workers? But mysteriously they can pay multi-million pound bonuses to senior executives who, far from having delivered above and beyond expectations, have virtually bankrupted the companies that employ them.

Current members in the final salary scheme I belonged to are now paying 8% of pensionable pay in contributions, not 5%, and I believe the police and firefighters pay 11% in recognition of the fact that they are eligible to receive their pensions earlier.

agoreira

In the Telegraph today it claims the difference is now 7.8% more in the public sector. Like you, I suspect support from the private sector is not great, and likely to be even less after the public workers strikes. Compared with most others they are still going to be getting a great deal. As for fire fighters paying 11%, to be able to retire at 50 that's not a huge amount, they still won't be matching the governments contribution. They could comfortably pay that out of the second job most of them seem to have.

licinius

Because banks & oil companies can get away with it, ordinary workers cannot afford to fund public sector pensions as well as their own.

johnnyone

Those %s are peanuts compared with the true cost of the benefit.

For a 65 year old man to achieve a pension of £20000 a year he would need a pension pot of around a 1/3 million pounds without taking the tax free lump sum. That is also without indexation or a surviving partners pension.

To achieve that you would need to contribute between 20-25% of your salary if not funded by your employer.

As for retiring earlier than 65 (as most Public Sector employees have) the amount required increases dramatically.

I have no problem with this as long as the cost of providing the pensions are recognised when valuing/comparing employee costs.

Domino

my company paid a larger increase in the ceo's pension payment than my annual salary


shouldn't read company annual reports

Lynn R

Exactly. Many companies in the private sector are still operating hugely generous pension arrrangements for senior executives whilst crying poverty and claiming that decent pension schemes for their other workers are unaffordable.

BTW, since 2008 the normal retirement age in both the Local Government and NHS pension schemes has been 65 for people joining the scheme after that date, and contributions now range between 5.5% (for people earning less than £12,900 pa) and 8.5%, and 5% and 8% in the NHS.

I remember that the argument for paying the bankers' huge bonuses even after they had been bailed out by the taxpayers (public sector workers included!) was that they had contractual rights. I don't see why public sector workers should have their contractual rights varied when they signed up to certain conditions - if the argument is good enough for the bankers, it's good enough for us.

Domino

[QUOTE=Lynn R;9478278]Exactly. Many companies in the private sector are still operating hugely generous pension arrrangements for senior executives whilst crying poverty and claiming that decent pension schemes for their other workers are unaffordable.

BTW, since 2008 the normal retirement age in both the Local Government and NHS pension schemes has been 65 for people joining the scheme after that date, and contributions now range between 5.5% (for people earning less than £12,900 pa) and 8.5%, and 5% and 8% in the NHS.

I remember that the argument for paying the bankers' huge bonuses even after they had been bailed out by the taxpayers (public sector workers included!) was that they had contractual rights. I don't see why public sector workers should have their contractual rights varied when they signed up to certain conditions - if the argument is good enough for the bankers, it's good enough for us.[/QUOTE]

I must agree with you - but deleting the "public sector" - it is a problem for private sector workers as well. My company totally rewrote the defined benefit pension scheme rules over a 2 year period. Those (few) who had been with the company for decades had a free pension but that was frozen. It would appear that if a company (controlled by directors) wishes to change the contractual basis under which you are employed in any aspect all they have to do is give you 30 days notice, then take it or leave it.

Then there are the problems experienced with TUPE - private sector workers have their pension frozen and the new employer foists a minimum payout lowest of the low pension on them. Public sector who are TUPE'd have to have their gold plated taken on by the new employer without break.

johnnyone

You cannot justify public sector pensions on the basis of some bankerses who may be overpaid etc

The reality is almost every bank and most other private companies have moved away from final pension schemes to money purchase schemes.

This was to save costs and I see no reason why it shouldn't apply equally to the public sector.

As I said in an earlier post the public sector employee contributions are peanuts compared to the benefit accrued and cannot be ignored any longer.

I really don't see how you feel the public sector is being hard done by when you compare it to the private sector.

Ultimately it is for the long term good of the country as a whole.

Domino

The following is extracted from the printed version of the Sunday Times of 3 July 2011, which as many know is subscription access online so I can’t post a link.

The Private Sector Worker
What he wants in retirement £25,000
What is he likely to get £12,300

The High Earner
What he wants in retirement £50,000
What is he likely to get £44,330

The Businessman (small business)
What he wants in retirement £30,000
What he is likely to get = £25,100

The Public Sector Worker (teacher)
What she wants in retirement £20,000
What she is likely to get £25,400 at 60, £38,500 at 66

Obviously the sums can be changed by increasing contributions, but when in one instance that is by £1,000 per month, it shows how all people are equal, some more than others

Lynn R

I don't feel that the public sector is being hard done by when compared with "ordinary" workers in the private sector - in fact I believe that private sector workers have been treated appallingly by their employers over the past few years, whereas the directors and senior executives have taken care to make sure their own extremely generous remuneration and pension arrangements haven't been affected.

British workers have however been too supine in not fighting this in the way that, say, the French would have.

I fail to see how it is for the good of the country as a whole if ALL workers end up in poverty in their retirement after the few schemes that still guarantee a decent pension have been scrapped, instead of some of them. As I said, that's reducing everyone to the lowest common denominator.

Maybe we should move away from occupational pension schemes altogether, put an extra 5 or 6% on NI contributions and pay a state pension based on a percentage of final salary (which I believe Spain does). That way we could perhaps ensure that those who have spent a lifetime on benefit (except for those who have a genuine disability) don't end up getting the same or more than those who have worked hard all their lives. That's what I believe is unaffordable and it is costing the taxpayer a fortune to keep all these people in idleness. Imagine being a not very well paid clerical worker in the Department of Work & Pensions or a Housing Benefit Department and processing claims for people to receive far more than you take home in a month - how infuriating must that be?