Public sector - Pensions

[maisiejoe123]

AIBU - to get irritated by the public sector bleating that they are being picked on with regard to their final salary pension schemes and being asked to retire at 65 as opposed to 60.

Why are they any different from others? I would love to retire at 60 but my company has moved the retirement date to 65. The state pension age has also moved. I understand all of this and whilst I am not happy (dont want to chase my retirement!)I accept that things need to change.

And they plan to strike???

Oh, well, of course MP's are going to save their own skin and screw everyone else to the wall. But the system permits them to do this and most of them have no moral compass so I doubt that will change any time soon.

expat Public Sector workers in the civil service have their pensions actuarially (sp?) reduced by 5% for every year (currently) under 60 that they retire. That means that if I were 55 now and retired, my accrued pension to that date would be reduced by 25% - for the life time of my pension. However, the age that I will be able to draw an unreduced pension is increasing from 60 (43 years service in my case) to 67 or 68 (50 or 51 years service).

So not really retiring on a gold plated pension at 50 or 55.

Ah, this old one again. Because the private sector rolled over onto its back for short-term wage gain only to discover they've been shafted in the long run then it stands to reason the public sector must be punished too; it's the classic race to the bottom.

Civil Servants are in the middle of a five year pay freeze, are historically paid less then their equals in the private sector and signed a contract upon taking their jobs and now they're having it ripped up in front of their faces, but any cry of alarm is "bleating"?

Fuck off, seriously.

I never mentioned gold-plated pensions. I'm talking about pensions in general.

They are starting to eat up more and more of the welfare budget because people are living longer in general, hence, the pension age rises.

This will become more and more of an issue as increasing numbers of people live longer and longer.

The only solution is that the age will have to rise and rise because the alternative - euthanising people who get 'too old' is not acceptable.

If someone can think of a better solution, I'm sure it would be considered.

yes, you are being unreasonable imo.

i am a public sector worker. I already knew i was going to retire at at least 65 and never thought otherwise.

I also know that despite me having to pay more into my pension while my kids are young, that by the time i retire i will not own my own home. so all the pension i have paid into will be lost anyway when it comes to means testing me for rent etc when I am 70.

lots of points here, some already made i guess, but;

most of the public sector is female. therefore, when they change the rules for some about taking your average pay for pension purposes, they will be averaging out a career. a lot of those female staff would have worked part time for years and years to fit into family life or taken long breaks to have children. so their pension will drop considerably from the little they were already expecting.

also, all public sector workers pay into their pension-just as you would if you were private. rather than arguing about 'who has it best', hows about a big push from the private sector to make their private bosses pay more into their pensions?

Or, hows about thinking how else, besides cuts, we could make savings. hows about thinking about ways to get our unemployed youth working or into training to help sustain everything? there are always other ways, or an 'as well as'.

this government has just found yet another way to take money away from women, ie: disempower them further; disempowering them if they work in the public sector or private with cuts to tax credits and by making nurseries have to charge more by lack of funding, disempowering them if they happen to work in a small business and want to start a family and disempowering them if they are single with children, as just a few examples.

hows about all us women sticking together and all strike for eqaulities at work where ever we work, all voice our concerns at the state of pensions for women where ever we work. wouldn't that be nicer?

lego - so you would be comfortable with paying a third extra for all the things you buy from the private sector? eg your food shop going up 30%. as i understand it a third of my council tax goes on council pensions - thats 900 a year after i've paid tax on it

of course dreaming because we couldn't touch any of the fat cat profits can we!

This thread is depressing - whoever said 'race to the bottom' was spot on.

Do pensions actually come out the welfare budget? I would have thought they were totally seperate.

I would like to see some hard figures for each seperate pension scheme, ie' NHS, police, teachers, council workers. I'd like to see how much each one is in defecit or otherwise and what general predictions are for them.

Because I suspect the state of them isn't as bad as is being portrayed. But more the fact that local authorities, hospitals are just trying to find any way they can to save money. Its very easy for them to say oh yes, there isn't enough money as you're all living longer, etc. And we're supposed to accepth their word?

Also if any scheme is in defecit I'd like to know if this is due to people living longer, etc. Or is it due to the fact that when the stock market was good and the funds were very much in credit various organisations took a break from paying employer contributions. Now that the bankers have fucked the stock market up suddenly the funds are maybe not as secure? I know for a fact this happened with a private company I used to work for. They stopped paying ofr years and years, then the fund was in the red - they paniced and shut the final salary scheme.

Lastly but most importantly I would like to see MPs subjected to the same as other public sector workers. No final salary scheme and no pension till they're 68. I don't see how they can say thats fine for us but they're too important/good/deserve better. They can fuck right off.

A proportion of council tax will always have to go towards pensions, though the figure is 25-26%. Councils, education authorities, etc are employers and contribute towards their employees' pensions the same as private sector employers do.

Seeing as local authorties aren't a business as such and don't sell stuff the only way they get this money is by council tax. Next you'll be complaining saying that your council tax pays council workers/teachers/police wages. Mmmmm well if it didn't then there wouldn't be anyone doing those jobs.

There have been quite a few people in this thread who have pointed out that the average public sector pension is around £4,000 per year and that this cannot be described as 'gold plated.'

The figures that I have read (from Citywire) state that the average is in fact £7,841 (though of course that means that many will receive less). However, the actual amount of the pension is not why the term 'gold-plated' is used. The reason we refer to public sector pensions as gold plated is because they:
a) Are guaranteed
b) Are salary related
c) Are index linked
d) Pay a widow's pension
The 'gold plated' description doesn't refer to the actual amount of the pension, but its security.

Compare this to the private sector, where pensions are none of the above and are dependent entirely on:
a)What employees and (for the lucky ones) employers pay into them.
b) The performance of the shares or funds into which the money is invested.
c) The annuity rates available at the time the employee retires.

In order to buy an index-linked annity equivalent to the 'average public sector pension of £7,841 per year' a private pension saver would need to amass pension savings of around £215,000 in today's money. Totally out of reach for most people.

I think that public sector workers just don't realise what a blinding good deal their pensions actually are - even WITH the changes to career average earnings etc, they are still incredibly generous and better than most private sector workers could ever dream of achieving.

I am very surprised that the average is as much as £7,841, considering the vast number of public sector employees are on a minimum wage,a high proportion of them are wmen who would not have acrued 35+ years of pensionable employment because of career breaks to have children and part time working. I can only assume that the £7,841 average is pulled up by some VERY fat cat salaries at the top of the public sector heap.
In the same way the highest paid private sector workers will raise the private sector pension average. We haven't been told what this average is. I bet it's much more than the in the public sector. You can do anything you want with statistics.Saying that someone in the private sector would need to have savings of £215,000 is a little disingenuous as in most cases a proportion of that would be employer contributions.
Also if we want to talk about average pensions, what are the average private sector pensions?
All in all, it's very difficult to compare like with like within the public sector and within the private sector. For example some private sector pensions pay a widows pension (my dh's does).

"a) Are guaranteed
b) Are salary related
c) Are index linked
d) Pay a widow's pension
"

My private sector pension does all of the above.

Can anyone remember why there isn't the money to pay these pensions? Have you read about what the Labour government did with the contributions, instead of investing them as they should have done?

Lucy - no I haven't, but I'd be interested to. I did put earlier on in the thread that I suspected the fund defecit may be due to something like this.

There are lots of people here commenting when they don' actually seem to know anything about the pension schemes they're talking about.

OP, try reading the information. Oh how I'd love to retire at 65 on your gold-plated private sector pension. The changes will actually mean me working until 68 to get my pension.

Lucyinthepie - actually, we're still suffering from when the 80s Conservative government allowed organisations to withdraw money from the 'over-funded' pension schemes. They had apparently forgotten that the value of the investments could go down as well as up. The Labour government didn't touch the 'funded' pension schemes like local government. The problem is the decline in value of their investments, a problem private sector schemes suffer from too. The Labour government couldn't touch the unfunded schemes as they are intended to be based on future tax revenue.

£4k average is the local government average pension I think, not the public sector average.

vivalabeaver, you couldn't see those figures. Some public sector pensions are 'funded' e.g. there is a separate pension fund which will pay the pensions, where as some are 'unfunded' e.g. they are expected to be funded from future tax revenue. There isn't one local government fund, each sub-region has its own. Some have bigger deficits than others. Some may actually get back on track with a sustained economic recovery.

A third of your council tax does not go on pension funding.

i work for the nhs as i staffnurse of 15 years and i dont think i get a gold plated pension i will have to work fourty years before i get a full pension which will make me 63 as i work in mental health i dont think this is is unreasonable age to retire also as i have worked shifts and nights and generally most unsosciable hours including most christmases since i qualified[ in fact the only time i was off for the whole xmas period was when igave birth on boxing day] i wiil no doubt continue towork unsociable hours throughout my career so think my pension should reflect this and please dont forget i am also a tax payer and pay substantial amount of tax every month

Oh how I'd love to retire at 65 on your gold-plated private sector pension. The changes will actually mean me working until 68 to get my pension.

Who is talking about 'gold-plated' pensions. Because as far as I know about the only people who will get gold-plated pensions in any sector are fat cats in higher management positions.

It's just as much a myth to believe everyone who works in the private sector is getting a good, better or any pension other than state as it is to assume public-sector employees are.

When the fact is, more and more of us are going to get FA as there probably won't be a state pension at all when we get older (I'm 40) and if we do we will have to wait longer to qualify for it because people are living longer.

For those in Scotland there's an interesting documentary on tonight called 'Is 75 the new middle age?'

Retirement was never meant to last but about 5-10 years for the majority of people.

Sorry, I missed quotes:
'Oh how I'd love to retire at 65 on your gold-plated private sector pension. The changes will actually mean me working until 68 to get my pension.'

People might well live for longer but health and mental sharpness does often deteriorate for a lot of over 65s. I think one of the problems we might face is that some people will just not be up to doing the same job after a certain age and employers will need to look at a selection of wind-down jobs. Or sack em I spose.

The point is, that pensions are no onger affordable unless we go back to the picnciple that people worjk until t years befor they are expected to die , as it was when pensions were first introduced. It is not affordable. So, strikes are completley pointless.
The choice is obvious. Smaller pensions for longer - ie retire at same age as predicted, or larger pensiosn for shorter - ie retire later. Simple.

One of the issues, again for frontline workers, is that you can't actually change your overall employer while still doing the job you are trained and experienced in and in a job you may well also enjoy. So, friends of mine can shop around (especially before the recession), for a better package, but a police officer, teacher, firefighter do not really have that option. I think it is perfectly acceptable to have to work longer, provided it is possible, but am less happy about increased contributions, especially for people who already have many years service, and may be less able to move or retrain.

I can;t afford a pension - on my wonderful public sector pay 8) I am also now over £400 a year WORSE OFF due to tax rises and the fall in CTC payments for childcare

still I'll be out of a job completely in the next 12 mths - musn't grumble hey

'Who is talking about 'gold-plated' pensions.'

People have repeatedly said that about public sector pensions. It's no more true than it is about private sector pensions.

I actually don't have a problem with being expected to work till 68. I do have a problem with people with no understanding of public sector pensions posting snippy comments about them.

lucyinthepie Do you really seriously believe that the lack of an invested pension fund for the public sector was just the last Labour Gov?? Oh my word...

There was an illuminating article in the Telegraph recently There's nothing unaffordable about public sector pensions which I found very interesting.

As I see it the current government has gone on a major campaign to rubbish the public sector and the civil service in particular. Given that the politicians are effectively the employers of all public servants in one way or another you can imagine how demoralising that must be particularly when it is not the public servants who determine public policy but their political masters. The question of the necessity of cuts, to the public sector and public services, is difficult to quantify as the shrunk state is a core part of conservative ideology. I don't question that our finances are in a bad way but it is difficult to know how much is driven by necessity and how much in fact is driven by that ideology.

If the politicians can paint a misleading picture of a bunch of over entitled public servants they can mobilise public support to ravage their T&Cs regardless of the true economic picture. It is a race for the bottom and will similarly entrench poor terms and conditions for the private sector and in the longer term no one benefits.

In due course the economy will bounce back and the private sector can and will offer better terms. The market will drive up salaries and benefits accordingly. This will not happen in the public sector which will lose its best talent to the private sector because in many cases there will be no good reason to stay.