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.

Nobody wants to be a teacher as it is. Scrapping a perk of the job will make things even worse.

My public sector pension is less than my state pension, and I am still taxed. Cut all those PS pensions and tax take will reduce. Where's the saving? Also the P S do provide all the services to the general population, health, education, dustbins, local services etc; maybe you should consider the benefits of the PS

This. We have had SO MANY years of shit or no pay rises. Other parts of the public sector like teachers and NHS staff have better pensions, public support and the power to strike to get better salaries. No one gives a shit if civil servants strike. Our pay is so far below market rates it's ridiculous.

Fuck off, I have career average pension which will pay out £19000 at age 67. A masters degree, will have worked 47 years if I go that long, manage 24 people - a much larger number of people using the service and work really fast all day long with very brief breaks. Just fuck off. You would last one fucking minute in my shoes.

@CandidHedgehog generally, divide the pot by about 30 to get your baseline annual income. Then add a bit to your pot size if you want your pension to uplift by inflation each year and pay 50% to your partner if you die before them. And obv if you want to retire at 60 it will cost more to buy an annuity than if you buy one at 65/70. Currently, if your pot is £120k and you bought an annuity today you’d get a guaranteed income of about £4k a year, but depending on your age, it should absolutely grow!

Wait till you hear about my former boss.
Started working at British Rail at 20, got made redundant at 40, but on final salary pension as part of redundancy package (2/3rd of salary). Then joined public sector final salary scheme type of company (can't say which one) and worked there for another 20 years. Again, with luck had the same retirement package 2/3rds of salary.

@Ritasueandbobtoo9 just come and join us in the public sector. I too have a masters degree which is necessary to perform my job. The amazing thing about the public sector is that there is usually a job for everyone because all these skills and professions are needed to keep the country running and benefit everyone else. Welcome on board!

@Rhayader absolutely correct, except that until recently, if your pension pot went over £1.03m you got a massive tax bill. So with annuity rates as they are, it was impossible for anyone in a DC scheme to build a big enough pot to buy an annuity paying more than about £34k a year.

The average pension pot for DC pension members aged 55-64 is £107,300. That will buy them an annuity/pension of about £3.5k a year. I’m sorry, but if you’re due a £19k a year pension, you’re doing incredibly well.

A lot do. Even if you don't, that doesnt mean others don't. Most of my friends and family in the private sector receive annual bonuses as well as some of the other perks I mentioned.

I’m sorry but I have to come back to this. You have a civil service pension coming of £19,000 a year??!! And you’re angry about this? You’re telling us to fuck off? This is exactly the problem. You have absolutely no clue how huge your tax payer funded pension is compared to those in DC schemes. The vast majority of DC pension members might get £3-5k a year. Yet here you are, moaning about £19k a year. Tone deaf.

I will have worked for 47 years for it!!!

I am in the public sector

I am doing increasingly well because I absolutely deserve it because I manage a front line service. I am not “average” I am a leader. don’t really get paid a lot £23 per hour for the responsibility I have (life or death)! So leave my pension alone otherwise people like me won’t be around to help you.

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.

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.

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

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

@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.

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.

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.

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.

@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.

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%).

@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!)