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.

this

plus final salary pension means a percentage of the base element when the salary is made up of many elements.

By the way my employer now contributes slightly less than 1% of my salary towards my pension but I get a 25% bonus which I chuck straight in most years. The whole package needs to be considered.

YABU. It's not a race to the bottom.

lol, sorry - I read it too quickly! I thought you wrote 1/125 which is on me.

I've never seen 1/25 though, are you sure? You only needed to work 25 years to have a pension equal to your whole salary?

I'm glad you've heard us @Monwmum and changed your mind. Thanks for being open-minded.

My eldest DD left uni with a first, when the financial crisis hit She couldn't start the career she planned, so drifted into teaching, which she's exceptional at. However, she now earns way less than any of her equally academic and successful friends, by some margin, and is way more stressed. Losing the security and pension would be a massive kick in the teeth, and to be honest, she'd be better off and more mentally healthy working in Tesco if that happened.

Yes I am pretty sure - but I will go and look it up. This was working for a NDGB in the mid 90s.

ETA - now wondering if I have misread it and it's been 125 all along! Will report back

If it was a stark choice between the two then surely pensions are a better spend of public money, especially if they are decently renumerated so people can pay their own bills without top ups.

If you were being really brave then you'd question the triple lock which is a HUGE cost on the public purse but you seem to just want to cause ill feeling towards public sector workers?

I could earn at least double my salary in the private sector and would walk in a heartbeat if they went for out pensions. So would the rest to my team. And replacements would be impossible to recruit so they would be left paying for very expensive locums.

True. I know no one at any other employer than mine (public or private) that has a final salary pension anymore. My employer stopped offering them to new hires over 20 years back (10 weeks after I joined and signed up). I’m sure there will be a few others like me on legacy schemes. I expected at the beginning the scheme would be wound up but at this point I think they’ll just let it run down as people retire. It’s a huge benefit and a big factor in my not changing jobs. Unlike the public sector pension my healthcare/teacher friends are on it’s also non contributory. It’s calculated as being worth 1/3 of my salary some years

What a vile goady OP!!! I am a Civil Servant. I contribute a fair amount to my pension and I expect a return for my investment.

When I was first interviewed for the Civil Service more than 20 years ago, they commented on the relatively low pay but explained the pension made up for it.

I have made a second career in the Civil Service. I have jumped through hoops to do training and serve the greater good. My job is not easy but I love it and I have fantastic colleagues.

When I worked in the private sector, I had relatively higher wages, lunches in Paris, parties and freebies etc as perks. I get nothing now not even free tea or coffee.

I do have decent working conditions and flexi time and when I retire, a reasonable pension but it won’t make me rich. I expect to work until my 70s. Most public sector get a few thousand a year. Hardly gold plated. I expect the Govt will eventually means test the state pension also.

Get your facts straight at least.

This isn't true. Most public sector pensions are still defined benefit. All of the big public sector employers I am aware of (civil service, NHS, teachers, councils...) still offer DB pensions.

They tend to be career average rather than final salary these days, and the terms are less beneficial than they used to be, but they are still DB pensions.

Ref calculations for wages, you have to take historical wage increases into account over time.

Example

One of my first jobs in the 80s paid £1.50 per hour

Minimum wage is now higher in the UK

The work I do brings in enough income to pay my salary many times over. By no means all jobs are publicly funded.

And that's my 15 minute lunch break over. (And I don't normally take one!)

I think we should take it further and just not pay them a wage. After all I don't want my hard earned taxes to pay for other people's lives!

Obviously (or should be but you never know) sarcasm but as stupid of an argument. Pension is part of the pay packet.

My DS is on £30k in public sector (also a school) for a job he'd probably get at least £45k for in the public sector.
He's not getting the pay rises that the teachers get so not all public sector jobs have had good payrises in recent years.
He'll end up leaving because of the low pay - the public sector pension isn't the gold-plated one that OP assumes it is and won't factor into his decision to stay/leave

TBF salaries in the private sector aren't much better than the public sector any more (except in obvious sectors like tech and finance). BUT that's not the point. The fact is that there's a huge pensions black hole that's going to be a real problem in the not-too-distant future, and it makes sense that at least some of the current workforce are getting enough of a pension to live off. It's not 'fair' in any way - including to the tax payer, who'll be picking up the additional costs in benefits anyway - to make sure everyone has shit, unliveable pensions.

Lol ok sorry please ignore me it's 1/60 - no idea why I remembered that so wrong will now need to name change in shame. It was final salary not average though I should maybe have stuck it out!

I checked the value at the same time though and it's pretty amazing considering it was 2 years as an admin assistant. Currently showing as an annual payment of £2,350 a year from 60. Worth having.

I’m sorry OP but you quite obviously haven’t seen what my pension is going to be, after working in a low grade for the civil service for 30 years 🤣 I’m never going to be a rich pensioner, put it that way!! Off you pop and apply for a civil service job… YABVVU

I have never worked for CS

My last employer paid a maximum of 3% into my work pension. I paid more than 3% in.

My previous employer paid more into my work pension.

I know some people that have never contributed to a work pension, because they could not afford to !

Oh, I love it.

Hordes of people ‘we earn considerably less than private sector, our lower grades are minimum salary, less than McDonald’s etc etc’

People like me ‘yes joined civil service from private sector, total package inc pension less than HALF of previous package’

Massive, well-documented recruitment holes in nursing, teaching, plunging, essential services because people will. Not. Take. A. Job. With. Such. Crap. Salaries. And. Terms.

Then people like Ladykale ‘yes, yes drone, drone, bloated packages, drone.’

What’s YOUR magical recruitment answer then, ladykale? Come on, you obviously have such economically well informed views, I’m sure we’d all love to know how those ‘bloated’ minimum wage jobs and vacant teacher roles could be more easily filled with worse salaries and benefits?

In what world do you think public sector staff got 'regular inflation pay increases' 🙄

Public sector had about 15 years of pay freezes the pay is crap. Terms of pensions were also changed they are nowhere near as generous as they were. Final salary doesn't exist anymore

It's probably a pretty good percentage of that salary though. Compared to what someone in the private sector would have earned in the same time, you're likely in a much better position. Of course, that doesn't mean your salary wasn't lower than similar private sector roles, or that you didn't miss out on other benefits like private healthcare. But pensions are always linked to salary, and looked at in isolation, yours is probably very generous.

Changes to pensions was one reason I left teaching. After nearly 30 years I will get about £14,000. That plus a low salary, starts to make the profession even less desirable.

Lol. I can't read and your memory doesn't work. We've made a great team.

This post does illustrate the value of DC pensions though, that will be a very meaningful boost in your retirement for the sake of two years' work.