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.

That's an insanely generous scheme.

If you start work at 18 and do 49 years you end up with 100% of your salary as a pension?

How on earth can that be justified?

They were continued in the public sector as a sweetener because (apparently) public sector jobs were lower paid.

And that is still the case - not "apparently" but actually.

Public sector workers at most levels are paid less than their qualifications & experience would nett them in the private sector.

Why else do you think a lot of doctors do private work, as well as NHS work, for example?

Yep, METPolice is about 5000 officers short.
Hubby is luckily retiring in exactly a year.

My NHS pension is the only thing that keeps me working there otherwise I would leave and move to the private sector, like many of my Nurse colleagues.

Nobody is missing your point, its just your point is invalid!

Public sector pay is so below private sector - that if you cut one of the only benefits like pension - everyone will leave, and the public sector will require their salary to become competitive. It doesn't save any money - just disrupts the workforce.

but then in response to the lower pensions in line with private sector then the reasonable response would be to raise wages then in line with the private sector ?

Son has just applied for a job with a public sector pension and one of the benefits is the employer ( Govn) pay 24% into their pension

The salary starting point is £30k plus and it’s available to those newly graduated which doesn’t seem low.

It's already been said but we're already struggling keeping police officers, doctors, nurses, teachers etc. And then we want to lower their pensions and see what impact that has? It's not going to be good is it?

OP good to hear that, as per your last post, you're willing to change your mind.

I used to work in the UK public sector; I left (went abroad) partly because the pension became so much worse after 2015 with the shift from defined contribution to career average. I have former colleagues still in their jobs, who after some further negative changes worry about how they'll be able to live on their pensions in old age.

Here's the thing: keeping old people in a state of independence, dignity and comfort costs money. If you make pensions too small to live well on, the NHS and social care will need the money saved to respond to the effects. The private sector is, in effect, already outsourcing the cost of dealing with the effects of stingy pensions to the taxpayer.

What is needed is not a race to the bottom on pensions, but governments getting together and finding ways to claw back more of the perverse profits and wealth that CEOs, owners and investors in the private sector currently get to keep. Fat chance, I agree - but that's no reason to target already-vulnerable groups s.a. pensioners.

I think you're missing everybody else's point, that public sector pensions were reduced from final salary to average salary in the early 2000s, and then those salaries were slashed in real terms after the financial crash when austerity measures required a total pay freeze for years followed by more years of below-inflation increases.

I work in the public sector and I honestly cannot think of anyone I know who could not earn 25%, 50% or at the more senior levels 100% plus more if they worked in the private sector. I could easily double my salary if I returned to the private sector, probably more than double, but I didn't enjoy the pressure of meetings sales targets every month.

I work in private sector. My salary is lower than public sector's. Public sector (especiali civil service) got this imaginary 'massive salaries' vision of private sector. I could also only dream of 19% (!) of employer's contribution to my pension....

That's because the salary isn't great. Someone on the same salary in the private sector would in all likelihood have a much much lower pension.

ETA I'm not saying you deserved a low salary or wouldn't have earned more in the private sector.

Public sector workers, nurses, teachers, bin men, social workers, all serve the public. The private sector workers would be pretty stuffed if we all went home or changed jobs. Want to look at the vacancy rates in education right now? The pension is one of the few things that keeps state school teachers in the job. But go ahead and bugger that up too and see what it does to recruitment and retention.

I appreciate this doesn't apply to all public sector roles, but I've slashed my own life expectancy by 10 years to do the job that contributes well to my pension, so it's not like I'm going to reap any long term benefits.

Swings and roundabouts. The grass isn't always greener.

I went from the senior civil service to the private sector. The salary increase was in line with the above, worse pension obviously but better other benefits. The non-financial benefits included much more straightforward and often much easier work, less of it, and much less pressure and stress.

I work in public sector (EA DEFRA group) and since 2010 we've had frozen pay for several years and only recently received a few 1% or 2% increases. Last year we did get a better increase but we are way down on what we would have got if our wages had gone up with inflation.
Also all the final salary pensions are gone. We are on average salary type scheme now. We are mostly low paid 20-35K with only a small proportion on 40-50K.

Think staff would leave in droves if pension was cut any further. We don't get bonuses etc. and earn way lower than in private sector.

Yikes really? What job is it that slashes your life expectancy?

Public sector pensions needs to be moved to a defined contribution system so there is a “pot” of money sitting there rather then them being the giant Ponzi scheme that they are now. The current model is unsustainable.

@ThisOldThang

I've worked in the public sector for 35 years, I don't remember anyone working for 50 years to get a 'full pension "
A lot of the public sector jobs would be unsuitable for people working until they are 70

but people working for low salaries in the private sector have the option to move to other firms to earn more money. or to work their way up. public sector workers don't have the same mobility and remuneration options - and they know this, which is why the pension has been and remains an important recruitment and retention tool.

the pp earlier in this thread who is a public sector planning lawyer is a great example. c50k i think? she could earn double that doing the same job in private practice. who does it benefit if there are no qualified or experienced lawyers left to do her job? people might not think it's important, until a housing developer wants to build on a flood plain upstream from them...

There is an assumption that the private sector is all rosey. My DH previously worked in a private sector role where there were no pay increases for years, in fact he had pay cuts. Yes, 10% were taken off all salaries on a couple of occasions.

Anything that does any significant amount of night shifts really, but especially if they swap back and forth regularly.

You should get your son to read up on Alpha. He isn’t getting a 24% contribution to his pension at all. His pension will accrue at 2.32% of his salary per year, for as long as he is a member of Alpha.

Couple of points. One, there's been a significant real-term decrease in civil servants' pay. Twenty years ago, a Grade 7 civil servant earned about £45,000, which is worth about £75k in real terms today. This is for the first level of management. Now, it's about £57,000. Also, the benefits of the civil service have either been cut back - i.e. pensions or the private sector has caught up to a significant extent such as WFH. This is a false economy - civil servants collectively oversee, and advise on, the expenditure of public funds. Attracting a less competent workforce will result in worse spending decisions as well as the need to spend £££ on private consultants to plug capability gaps. At more senior levels of the civil service, the pay gap between the public sector and private sector is very significant, and turnover has increased significantly.

Fast Stream (and HEO) pay might look attractive but where is the progression? There will be long term staff on that wage and lower. Deputy Directors - Senior Civil Servants start on £76k and there aren't that many posts above that.