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.

If you think our pensions are so great then why not come join us?

I'm sure you'll manage on a lower salary (about £10 less for my role type), whilst covering two jobs because there isn't the funds to recruit a second person, and all the stress that comes from dealing with vulnerable members of the public who are an absolute delight!

If we have a huge black hole, perhaps we should be looking at everyone paying a fair share rather than hammering hard working individuals whose package is clearly not trumping others or we wouldn't have an issue in hiring in a lot of the sector!

To that end, I think RR called it quite well in the budget although I'm sorry to have seen the balance of the burden then laid at the feet of businesses.

10 years of Tory rule has brainwashed too many in the politics of kicking our own, when the targets, once the majority of us have paid a fair share, really should lie elsewhere.

And yes, they pay is much lower. Dh is well into the higher rate tax bracket and was looking at civil service roles but stopped when he realised how much of a paycut he'd need to take.

I work for the LA and honestly my wage is a kick in the arse off minimum wage. It’s only the pension which makes it competitive. They put in 27%, I put in 10%. I suspect if they scrapped pension they’d have to raise wages. Also people having money in old age is a good thing as it helps pay care costs etc

Ludicrous idea

Yup...the pension is just about keeping me in the public sector...but only just. The wages aren't. Slash the pension and I'm off to do something more lucrative.

If you have children, and want them to have teachers, then put that idea right out of your mind. Likewise if you want nurses should you ever be ill.

The vast majority of teachers could use their degrees earning a lot more in the private sector. Multitudes of them are already using that ability and leaving education. The pension is the only thing putting the brakes on for a proportion of them.

I have have two teachers and a nurse in my immediate family. All three are close to leaving. The security and pension are the only things holding them back at this point.

Again, I'd rather see the eradication of in work benefits that top up some private sector profits by allowing those companies to pay the lowest wages possible while the state bridges the gap. Implementing that is difficult because of the immediate impact on those people receiving in work benefits but while we're making ideological statements that's mine.

You do realise that the staff pay into and fund their pension scheme with contributions each month?

An argument I have read is it would be more expensive in the short term.

DB pensions so (current career average) pensions schemes are all pretty much in deficit. The government backed DB schemes all have a “golden guarantee” so aren’t regulated as heavily as other private sector DB schemes. So they generally use current contributions to pay out current pensions (PAYG funding method).

If they switched to DC pensions they’d then be forced to pay two sets of contributions:

• those into the DB scheme to make up the deficit
• those to current employees into their DC pension funds

So in the short term it’s more expensive so not something the government would consider.

We are still tax payers and not every public sector department in the whole of the uk is paid the same, plus there have been recruitment/promotion freezes over the years so the possibility of earning more has been slashed. Its not all lovely little jobs with nice pensions

Yes but WHO are you going to ‘claw this back’ from? Do you feel like nurses are currently a bit overpaid? Do you feel like we don’t need so many bin men so it doesn’t matter that their salary and benefits are just so unattractive that no one will apply?

I work in a fairly cutting edge part of policy and just watched my boss’s boss manage a room of household name companies’ CEOs. I would estimate she is on about a fifth to maybe a tenth of what they are on. Her percentage of pay spent on her pension will be but a drop in the ocean to their bonuses, share options, travel and car allowances etc etc.

Here is a good example of something that affects a lot of us but is not related to anything I personally do:

Shortage of planning officials causes massive delays in building plans - can you imagine the billions of pounds not created in the economy in stalled housing and infrastructure projects because they just can’t FORCE people to become public sector planners? Or stop them from leaving for more lucrative inhouse jobs if, as you wish, their benefits are cut?

https://www.architectsjournal.co.uk/news/recruitment-crisis-leaves-planners-unable-to-exceed-minimum-duties

It’s impossible to recruit in lots of local government areas as the pay is so poor in comparison to private sector. Reducing package by reducing pension isn’t going to make it easier to recruit. My area is staffed predominantly by women who can afford to work for lower wages as they have higher earning husband.

Not all public sector jobs are low paid. My DS is on £30K in the public sector (school) for a job he’d probably get NMW for in the private sector.

You haven't been "slammed" - people have disagreed with you, making well-supported arguments.

£30k is low paid in Mumsnetworld.

It’s incredibly hard to recruit to the public sector just now (I work in local government which admittedly is particularly bad). Pay is poor (a couple of pay rises recently does not make up for years of little or frequently no pay rises at all), and pensions have been eroded over years too. Public sector pensions are not an incentive to work in the public sector any more (yes, there are some roles/areas of work where it’s still good, but it’s a lot less common and is not an incentive if vacancies are anything to go by). I could earn more in the private sector, but my pension is a bit better than it would be there, so it generally evens out. If anything pensions across the board should be better, rather than any sort of race to the bottom for people who have worked hard for years, wherever that is. This attitude that the public sector across the board still has gold-plated pensions is long out-of-date (and has been for years, can’t believe this attitude is still out there).

I'm not sure what area your friends work in but for me I had some interviews last year with the private sector, the pay being offered to me was between 40-45k base salary plus commission whereas in the NHS I was on just over 28k at the time. That's a huge difference! If you slash pensions, there's barely any reason for us to stay in the NHS (particularly once you're done with needing maternity leave).

Been a while since the last public sector bashing thread 🙄
Yes, it is not without its faults. However no some cushy bed of roses that some elements of govt and media make it out to be. General divide and conquer tactics.

Can you produce figures for that?

Public sector jobs are on average higher qualified than private sector because the "unskilled" jobs are outsourced. Even so. the majority of public sector pensioners have pensions of less than £5000. Are you saying that most private sector pensions (excluding retail, hospitality, cleaners, other low paid jobs which don't exist in the public sector) are less than £2500?

Incidentally, when civil service pensions were "non contributory" 8% of salary was deducted from pay offers to compensate for the pension being "non-contributory".

My public sector salary is about 65% of what my private sector salary was ten years ago.

I had a final salary scheme in the private sector, defined benefit in the public sector.

I'm desperate to leave the public sector, as are many of my colleagues.

Workloads, culture, perks - all worse. Most of us at my SLT level have had enough of feeling undervalued and paid less than we are worth, most people I know at my level are looking for other positions.

The high % being paid into the schemes by LAs are to cover their liabilites, including aged liabilities for all of the people who are on the old final salary schemes.

YABU.

@Butthistimesticktoit there’s a massive shortage of planning lawyers too. If you are an experienced planning solicitor you aren’t going to work for £40,000.

The point of @Monwmum post is that private and public sector jobs are basically being paid the same now already

The only thing keeping me in my public sector job is the pension. Cut it and I will leave, as will many others. It’s also not as high as I think you think it is. Many people get good ones because they commit to 30-40 years whereas you move more in private sector.

I wonder if there is an argument though for reducing pensions in the public sector but increasing wages by the same amount? This may make the sector more attractive to recruits who do tend to look more at the short term but come at a lower net cost as the income tax receipts would be higher.

It would however have the potential to be quite inflationary as more money would be injected into the local economy so would need to be managed carefully.