To think public sector pensions should be slashed?

[Monwmum]

I'm probably going to be slated for even suggesting it....but in the private sector, high percentage final salary pensions were phased out in the early 2000s because they are a money pit and unsustainable. They were continued in the public sector as a sweetener because (apparently) public sector jobs were lower paid.

This simply isn't the case anymore. After years of frozen pay or meagre 1 or 2% pay increases in much of the private sector versus mainly regular inflation based pay increases in the public sector, this gap has been reduced if not closed completely. However, public sector pensions are still getting contributions of the high 20% figures while private sector pensions range from 4% -10%.

Quite a difference! Am I being unreasonable to say this would be a good place to start saving some of our tax money? And before people start saying there would be outrage just remember this was done to every private sector employee in the early 2000s so it can be done.

The vast majority of public servants aren't on DB pensions anymore. Yes, I get 19% put in by my employer and it is one of the reasons I decided to work for them but it isn't a race to the bottom. You are welcome to apply and become a member of the public service if you wish, every job has its perks and their downfalls you should take the employee offer into consideration when you apply for a job.

People look at the whole package. Slash the pensions and you’d have to raise salaries to private sector level.

There have already been changes to public sector pensions, most are not on the good pensions of old. And even if the pensions are better than private sector, why not campaign for private sector pensions to be better, instead of a race to the bottom? Many private sector jobs command perks that do not exist in public sector such as bonuses, so that's another consideration.

This. IMO it's well known if you move to Public Sector your salary will drop but you'll get some of it back in your pension.

We don't get final salary pensions, we get career average where each year paid in is worth 1/49th of the final pot. So it's almost impossible to get a full salary at the end.

I'm not advocating a race to the bottom but this is tax payers money being used ....we seem to lose sight of that? At a time when pensioners have had the winter fuel payment removed should public sector pensions really be more than double those of the private sector?.

In the civil service, we didn't receive a pay rise of higher than 2% from 2010 until 2022. For several years it was 0%. Our lowest grades are being abolished as there are now several grades that are all on the minimum wage. So the premise of your OP is wrong.
DH is in the private sector and has had pay rises of way above 2% numerous times over the same period.
Typical crab in a bucket mentality.

I just want to understand your mentality

If you actually think it is actually a problem, why wouldn't your idea be to improve private pensions instead of cutting public?

The public sector body I've worked for for a decade has been on a pay freeze for 7 of those years then two years below inflation and they haven't yet negotiated this year's pay deal. Not sure where you're getting your pay increase figures from.

The private sector equivalent of my job has a starting salary greater than I receive after a significant promotion. We also receive about half the pay of our direct equivalents elsewhere in the world. Cut our pension by all means but be prepared to double the pay or face a mass exodus. Bearing in mind we already have pretty terrible retention rates.

There are almost no final salary pensons in the public sector any more. They were phased out at the start of the 2000s.

Why do you want to penalise public sector employees? Would it not be better to campaign for private sector employees to be given better packages?

Public sector doesn’t have final salary pensions anymore.

most are on average salary now.

edit: any cost saving taken by slashing pensions would be really slow to come through as you can’t change the pension years you’ve already agreed on. There are loads of people who are now retired who are on final salary pensions for example.

Ok I knew I'd get slammed. I think everyone is missing my point. Public sector jobs are paid for by all of us... including the pension contributions. And they are more than double those in the private sector so it just seemed a place where some money could be saved? You could still make them more competitive than private but cut them by say 25%?

As said, it isn't a race to the bottom. In the UK we never seem look up and question the lack of good wages/pensions/large profit setting, we only ever want to make life difficult for everyone. I wasn't a fan of Corbyn but low employer contributions to private pensions, was on his agenda.

Because the govt is investing in the old people of tomorrow so they can reduce state pension and encourage retired people to be self sufficient, so they lead by example by covering PS employees.

I read an article somewhere - and I wish I could remember where - that floated the idea of offering new joins the option of taking a higher salary in return for a lower pension contribution. Depending on the figures, honestly, if I were offered that I think I would have taken it.

That's still a DB pension.

Compare chief exec salaries between public and private sector and then tell us they're overpaid.

I'm a teacher. Years of pay freezes and 1% increases means my salary is way below what it should have been, adjusted for inflation. It is nowhere near what private sector increases are. My husband who works in industry has had a 6.5% pay rise every year for the last 6 years!!

Some of those pensioners benefitted from final salary pension schemes themselves...

The private sector need to start competing instead of seeking ever higher profits for a select few. Reducing public sector pensions so more people end up in pension poverty and either suffer or are bailed out by the state to ensure high private sector profits is daft.

You realize the vast majority of people in the PS earn between £30k - £50k a year, yes there are a small number on ££££ but the majority are not, and ofcourse pay tax on what they earn, many at the lowest grades are accessing food banks there are very few high rollers in comparison to the private sector.

But op specifically said final salary which is very different.

Basically they already HAVE slashed our pensions.

i think the % employers appear to pay is misleading. The % is based on what it would cost to buy an annuity of the same value. It’s not actually cash exchanged. Most people with a pension pot that size wouldn’t buy an annuity they’d see it as a raw deal and keep the cash value instead.

And also give annual bonuses that are still common in the higher level of the private sector. The pension provision was always the one advantage that the public sector offered in exchange for the lower salaries and conditions in comparison to the private sector.

@Monwmum actually some public bodies, including the one I work at, are trading funds and don't receive any central funding. Our pension contributions are funded by the work we charge for doing. So my pension contributions are not funded by taxpayers.

There's chronic staff shortages in many essential roles within the public sector, nurses, teachers, emergency services etc. Pay really isn't that great for professional graduate roles, typically around £30-50k with no bonuses.

You know, the sort of money that MN generally thinks is somewhere between 'a pittance' and 'not very much' while they're merrily talking about their 25 YO DC earning twice that in the private sector.

Do you think it's a good idea to make the chronic shortage of these roles worse by reducing the one part of the package where the public sector is more attractive than the private sector?

Also, if you think the public sector is more attractive, you can always apply to work there.

Civil servants don't get any other perks like you often do in private. Lower salaries, no private healthcare and dental, no bonuses, etc. Never understood the 'ruin things for others' mentality. There are far bigger places where tax payers money isn't being used efficiently, I don't think penalising civil servants and making future pensioners poorer is the answer. Pretty foolish suggestion really.