Public Sector Pensions

[Fluffyone]

Trying to make up my mind about this whole issue, and also to find out what each of the major 3 parties intend doing about them. It's an issue that must be affecting a large number of people in the country?

[onadietcokebreak]

Hands off my pension is what I say! We have already had enough cuts and this is the only thing that keeps many civil servants in service.

The pay is rubbish compared to private sectors and other perks like flexi time are being eroded.

[Igglybuff]

What do you mean? The cost of them?

[Lonicera]

The Civil Service Final salary scheeme was closed to new entrants in 2007. New Civil servants have a 'career average' scheme.

OP what exactly do you think should be done?

[Igglybuff]

Also many public sector workers are on pretty poor pay, they don't get massive bonuses and do a service to the country.

I'm more peeved at billions being shelled out to the bankers than the public sector pensions. And at billions wasted on PFI deals.

Anyway, the quoted cost of public sector pensions is based on actuarial assumptions - i.e. projecting future cash flows based on various probabilities.

[Bumperliouzzzzzz]

I'm, with onadietcokebreak.

[activate]

"The Civil Service Final salary scheeme was closed to new entrants in 2007. New Civil servants have a 'career average' scheme."

is this true - my friend who started work at a london borough council in 2009 has joined a final salary scheme

[Igglybuff]

activate local authority pensions are different to civil service ones.

[activate]

are they? Surely they're funded through taxes?

[Fluffyone]

Each of the parties is having to consider how to make cuts in spending. Regardless of the terms and conditions of the initial pension that local government workers (like me) signed up to, there is talk of capping or cutting final pensions.
I caught the end of a discussion on Radio 4 where I think they were saying that the Lib Dems intended capping all public sector pensions at £50k per year. A very nice pension I'm sure we'll agree. However, the average local government pension for women is about £2.5k p.a. And of course, not many workers would be on a pension of £50k a year anyway, and if they had then they would have paid a huge amount of contributions during their time in the scheme... So, what would the other parties do if they get into power?
Another way to achieve savings that has been considered in the past would be to change the basis of the calculation. For example, my pension is based on one third of the average of my last 3 years salary. If you changed that to one third of the average of my total salary, as has been suggested in the past, that would be a huge hit.
So, I've been trying to find out what the stance of the main 3 parties is in relation to this issue, and I can't. Regardless of the terms we signed up to, the government will do pretty much what it likes in the end.
Just for info, I have a pre-2007 local government pension, started in 1981, that I paid into for nearly 20 years. At the moment it would pay out roughly £10k a year, which is nice, but not exactly life-changing. Personally I think that the terms of my scheme should be honoured. I took a deliberate decision when I joined LG to move into a sector that was lower paid than the retail area where I worked, but more secure and with pension benefits. Of course I had no choice but to pay my contributions each month, at a time when most of my friends weren't even thinking of pensions. Even now, I have paid into my pension for longer than many of my friends, and paid in more money, as they only started when they had to.

[Lonicera]

the Civil Service is only a portion of the Public Sector - the Public sector also includes Council workers, NHS, Police, Teachers, the Forces and that's just off the top of my head.

[Igglybuff]

Yes both funded by taxes but different pension schemes. (You queried whether the final salary scheme had really closed - it has for the civil service).

[Lonicera]

Sorry Fluffy, I got the impression from your OP that you were anti Public Sector pensions - my mistake

[Fluffyone]

Absolutely not! I'm just trying to find a bit of clarity somewhere in the manifestos and interviews. It's critical to me what happens to my pension. (The pension I've paid a shedload of my 20 years of salary into by the way, they aren't funded from taxes, a proportion is, as is the case in the private sector).

[Fluffyone]

Sorry, what I mean is that employers contribute to their workers pensions. So, that's what is supposed to help with my pension too.
You could compare it to the criminal mismanagement of other pension schemes. What happened to the money that successive governments should have been investing to underpin their workers pension scheme? The mis-management of that is the reason why we're in the situation that we are in now.

[Igglybuff]

To be honest, I'm not sure the politicians dare do a huge amount about existing pensions (I hope - I;m public sector too). Especially as MPs have a pretty cushy deal themselves. I suspect they'll increase the retirement age and change the scheme for new entrants.

[KillerCleavage]

Well in my union magazine they asked all 3 main parties what they would do with public sector pensions.

The Tories and Labour wouldn't say other than that public sector pensions needed to be reformed.

The Lib Dems also said that they needed to be reformed but that they wouldn't change the terms and conditions of existing pension schemes as that would be unfair. It would just be new public sector workers. Such a shame that NC repeated his desire to reform public sector pensions so many times in the first debate when the other two barely mentioned them. How many votes might that have lost him from people who haven't read the manifesto?

But fuck me - a pension of £50k a year?! I wish!!!!!! A wage of £50k a year would be fab!

[Igglybuff]

The manifestos are pretty vague on public sector pensions - just talk of tough reforms... That's it!

[muddleduck]

there are currently negotiations under way about university acdemic staff pensions. As I understand it the employers want to shift from final salary to career average (not affecting contributions already made). I really am not sure what I think about this. While I agree with onadietcokebreak about making up for lower pay etc, the current system seems completely unsustainable...

unsurprisingly the negotiations seem to be going nowhere.

[Bumperliouzzzzzz]

IIRC it will take an act of parliament to change the final salary schemes of existing public sector employees.

[Igglybuff]

What's the annual cost of public sector pensions? Because the liability figures bandied about are projections of amounts due as at a particular date based on ifs and buts. Changes in accounting rules meant that this liability had to be recognised - and it was pretty shocking seeing it in print. Sorry to get techy. I do get annoyed though when there is talk of pensions being unsustainable without a proper discussion as to why. The actual cash paid out every year is not the same as the liability figure.

I'm rambling now!

[Fluffyone]

You'd have to be earning shedloads to get a pension of £50k a year. Mind you, when I think of some of the big bosses I worked with in Education, although some won't believe this, they deserved what they earnt. They worked all the hours God gave, lived and breathed their jobs. I'd go in on Monday and pick up emails and reports that had been produced in the middle of the night, at weekends...
But for most of us, our pensions are nothing like that. I think basically that it would be wrong to rob from people on the old scheme, but it's fair enough to review future schemes.
I'd be tempted by Lib Dems, but some of their other policies scare me. Just don't know which way to vote!

[muddleduck]

keep on rambling Igglybuff - you seem to understand more about this than the rest of us

is it right that some areas still have a retirement age of 60?

[Fluffyone]

Yes, I have a retirement age of 60 on my pension. I am an old LG worker though...