To think public sector pensions should be slashed?

@VoteDappy because it's unaffordable!

£10 billion per year just for CS pensions to be topped up!

Where would the extra billions for every employee come from?! The maths doesn't work!

But they've worked and paid for them in the first place. You deserve to be 'slammed ' .

Absolutely this
Very shortsighted the " If I can't have it, no-one should" navel gazing mentality.
It isn't a race to the bottom
Do these people think suddenly everything will be rosy when they retire when they are actually calling for pensions to be slashed?
If public pensions,are cut it leads the way for private to be cut also

YANBU, I’d personally prefer all pensions to be DC and wages to rise in the CS if necessary to compensate. There is a huge and unfair disparity at the moment between public and private sector pensions. I think with today’s population demographic any form of guaranteed pension (unless a privately purchased annuity) is utter financial madness for a company or the state.

ETA - it’s disingenuous to pretend pensions are the only benefit of working in the CS. There’s also very generous sick pay, a lot of flexible working, many workers rights since it’s heavily unionised and the most non frontline roles are low pressure and notoriously difficult to be sacked from.

It seems that many people do not realise the extent to which DB schemes are more generous than DC schemes. Once we have a generation of people retiring with insufficiently funded DC schemes this situation will become a political hot potato and have to be addressed.

There will be a perfect storm of many more people retiring with much too little saved in DC schemes because auto-enrollment contributions are far too low; a much higher proportion of pensioners still having mortgage/ rent to pay than in previous generations; higher taxes at lower thresholds than in previous generations, poor public finances due to decades if economic mismanagement in the UK, and demographic changes due to longer life expectancies and falling birthrates meaning there is no realistic way to fund the unfunded promises of public sector schemes because there will be too few current workers to keep he ponzi schemes going and it not being viable for other taxpayers to make up the growing shortfall (including other pensioners who, in some cases, could never have achieved even if they'd saved the entirety of their salary throughout working life). This disparity has obviously been made even worse by successive Governments raiding the pensions of those with DC schemes with extra taxes which discourage saving further.

It isn't public sector workers' fault, or that they don't "deserve" a generous pension. Many people who don't have a DB scheme also "deserve" a better pension and won't receive one. The situation is the result of the poorly structured and unsustainable system and politicians burying their heads in the sand about it for decades even though it's clear that it cannot be funded in its current form. It's not going to be pretty, that's for sure. The rage evident on this thread just discussing the topic shows that! But unfortunately economic reality will bite.

@Ritasueandbobtoo9 but you are privileged, because your pension is not fully financed by you/your job. The tax payer takes money that could be spent on other things and tops up your pension to a guaranteed amount.

Any person without a defined benefits pension scheme can pay more in, as you suggest, but may not get any more out as their returns are not guaranteed and underwritten by the taxpayer.

Maybe you need to pay more into your pension. I am far from privileged, The problem is that people don’t understand that they need to save. A lot of people in my profession don’t live that long as by the time we do retire are quite worn out.

Singleandproud, well put.

gummybear

yes, the local gov pension scheme is funded. I’ve never understood why other huge public sector pension schemes are not funded, and instead ties future generations to enormous promises, regardless of what is around the corner.

I also imagine that the fact that LGPS is funded is a reason why it has been easier in the past to outsource sections of work done by local government into the private sector - you don’t need thousands of future local government employees working to fund the pensions of retirees. But this is turn has led to degraded terms and conditions for eg care workers.

I’m also not sure what the plan is to cope with future workforce change in unfunded sectors eg what happens if you need to reduce headcount because of a recession or because AI takes away jobs and they are not replaced?

I only really ‘know’ about the TPS and there, the rise in employer (taxpayer) contributions over the last few years has been quite staggering. From 19% a few years ago to nearly 29% now. At the same time, the ‘deal’ has changed, from final salary to career average, and later retirement dates. It’s not the case that today’s teachers get 29% paid into their pensions. They (and we) are paying the final salary pensions of their ex-colleagues.

At least we will always need teachers, so there will be a stream of future teachers to fund these pensions, as long as the economy doesn’t shrink.

All very complicated. I’ve no idea what the answer is.

LGPS are fully funded.

This means that the scheme aims to achieve solvency, that is, they are required to hold assets to cover the cost of the benefits (liabilities). It is also worth noting that LGPS is funded at local and employer level.
So the taxpayer is not funding it. They are self funded and are contributory pensions.

You need to distinguish which pension scheme you are referring to.

Reeves is mainly after Local government Pension Scheme which are fully funded to cover their liabilities.

They are contributed by its members.

Taxpayer are not funding them.

State sector pensions run at a massive deficit. And the taxpayer tops them up. So after all the money paid in is invested it falls seriously short of the defined benefit committed to the state sector pensioners.

Currently the deficit is about £10-11billion per year

Just to top up retired state sector workers. Every year.

Its ridiculous. It's obscene. It's unsustainable.

Yes they absolutely should unless private are also raised. For a good chunk of my career so far I have been stuck in a pay freeze in what was already a poorly paid job. There are no bonuses either. Seriously, some people either need to start to appreciate public sector workers and the invaluable and largely unthanked work they do or they need to grumble in private.

The Local Pension Scheme is a contributory scheme. Members pay into the scheme, and these funds are invested to cover their pensions. As a fully funded program, the scheme is owned by its members, not by taxpayers.
Public sector employment does not make these pensions public property. Members have the sole claim over their pension funds and their investment decisions, as they contribute to and sustain the scheme. Consequently, no outside party has the right to dictate or interfere in how these funds should be invested — only the members, whose money it is.

Yeah that’s my point! Anyone worth their salt who joined for the Fast Stream leaves around that level because it’s a tiny amount of money compared to what they could get. In that case they could get 3-4x working for EDF as a consultant.

@Rhayader £75k for a senior civil servant, with huge responsibility for hundreds of staff and a multi million pound budget doesn’t feel enough though? I’ve no doubt, that permanent secretaries are brilliant people - clever, well educated and driven. But the CS drive away entrepreneurial people who’d like the opportunity to buy a house (for example). They need to work in the private sector.

£160k a year our prime minister earns - an equivalent CEO might earn £1m+ in the private sector. I know which I’d choose if I was that calibre (which I’m not!)

The Fast Steam only recruited something like 2.3% of applicants this year. It’s hugely competitive. Central government tends to be fairly high fliers (especially in strategy, policy, private office) but they do peel off at around grade 6/deputy director level to the private sector where salaries are fairly capped in CS.

DD salary is typically about 75k and you can be responsible for huge numbers of people and massive briefs. For example there is currently a DD role for “nuclear decommissioning” being advertised. Responsible for the safe clean up of 17 decommissioned nuclear sites with a £21bn budget. 76k per year plus pension (29%).

@Ytcsghisn I don’t disagree. But imagine how much more efficient our public sector could be, if it was staffed by bright, ambitious grads who were properly remunerated. We could probably get rid of about half of them and still run the state better.

You are comparing government run departments to FAANG?

Seriously?

Government is run largely by mediocre, often, quite low caliber people. Have you seen the governments of the last 25 years? Have you seen the current one? You wouldn’t pay them clean out your shed. And you think bright people should be paid big wages to work for this bunch of morons. What a waste of talent that would be.

Bottom line is, bright people are attracted to work with bright people in productive environments. There is nothing bright or enterprising about anything run by government. And never will be.

And?? Do you think you work any harder, or for longer than people in the private sector? Who can only dream of a £19k a year pension? You really need to check your privilege.

I'm not sure the assumption that private sector employees enjoy inflation busting pay rises is accurate for many of us. I have an ACA and work in the financial services sector and there's been several years when there's been zero pay rises. It's not all roads paved with gold and we're not unionised so you suck it up or try to find a different job.

My employer pays 5% into my DC pension if I match it. In fairness I work in investing so I can manage my own pension pot but it's still pretty small, despite having topped up to max my allowance in some years.

I don't think public sector DB pension schemes are sustainable given the ageing demographic. DB schemes are vanishingly rare in the private sector given most shut 10-20 years ago.

I think public sector pensions should be phased into DC schemes and if that requires moving to the private sector to increase their salary, or an uplift in salary in the public sector, so be it. Currently they're storing up a large unfunded liability that can't be put off indefinitely.

@Rhayader technically yes however, due to the very generous way the total value of a DB schemes entitlement is valued (in comparison to the value you'd need in a DC scheme to actually buy a lifelong index-linked annuity for the same amount) the LTA was much harsher on DC scheme participants than DB ones. But only changed for the doctors, who weren't the hardest hit by it at all because they could have a pension equating to a much higher actual annual retirement income before they hit the limit than someone with a DC scheme!

It's good it was removed, though. It was a stupid policy. Nobody can predict investment growth rates decades into the future so it was a huge disincentive to save which is the opposite of what the Government should be doing.

Same tax rules applied for DB schemes. That’s why the rules were changed (to stop doctors retiring early)

Working for 47 years isn't particularly unusual though for someone starting work around 20.

The contributions being made today are paying the pensions of those already retired. We are paying, as public sector employees, into a "promise " scheme for the future. They are unfunded schemes

This is the problem. The unfunded schemes are ponzi schemes and sadly the Government has no realistic plan that will enable it to keep its "promises" given forecast demographic changes.

I think really we need to have decent pensions everything is so expensive. What happens when we have generation of renters/ mandatory employers pension contributions 3-5% getting old enough to need care with no pensions or assets? A race to the bottom is crazy we need to plan for our futures.