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.

A family friend is a business manager for a multi academy trust, she used to be a business manager in the private sector (not education), her yearly wage in the public sector is only slightly higher than her average bonus in the private sector.

If the public sector is the land of milk and honey why do we have staffing crisis in so many branches of the public sector?

I'm assuming you mean specifically civil service pensions (27%) rather than local authority pensions. When I was at an LA it was matched up to 6% like any private sector pension can be. It was not gold plated like you read in the papers.

A private sector worker could pay more into theirs to bring their levels up....and probably still take home more pay than a public sector worker!

I assumed my teaching pension would be enough to live off if I was frugal. But after going part time after children it's looking to be around £9K a year which I can access at 60. So not awful but it's not going to enable me to retire so I will still need to work until state pension age of 67. I will get another small pension from an admin role I do once I get to 67. But I don't believe I will have lots of spare money.

I've had people earning double what I do complain about teacher pension & yet they can't see that they have probably more going in. At the end of the day a percentage of a low salary isn't going to be as good as a percentage of a well paid job.

I don't believe it would be possible to fill many positions if there were no benefits whatsoever. I rarely hear young people talk about going to work in public sector roles. So I think currently Gen X are the last generation who can see any benefit. The new teacher pension isn't much of a draw for people in their 20s.

I work in law in the public sector and my pay is certainly not equal nor comparable to those in the private sector.

It is extremely difficult for us to recruit because pretty much anyone who joins us would be taking a substantial pay cut (unless they are very recently qualified).

Our flexible working used to be an incentive but most firms have similar flexible rules now. The pension is pretty much the only remaining incentive.

I don't know where you think we're getting all these amazing pay rises from either, we were on a freeze for a decade and have only received rises in the last couple of years which are negligible in monthly pay after tax, NI and pension contributions.

Our tax payments today are not paying for future public sector pensions though.
They are paying for current pensions being paid out today. You can’t change current pensioners’ workplace pensions, people have relied on those and have accepted lower pay in return.

What we could and perhaps should do, is change future public sector pensions for people being recruited into the public sector now. We could change these future public sector pensions to a defined contribution scheme rather than defined benefit. This would bring the public sector in line with the private.

However, public sector would need to offer higher pay (like the private sector) to compensate and be able to compete for employees. And that higher pay would have to come from today’s taxpayers.

So to make this change - a generation of taxpayers would wind up paying for those currently claiming public sector DB pensions (which are expensive) AND for raised salaries for those currently being recruited into the public sector (if they are going to be offered DC instead of DB). This is too expensive.

If I, with 28 years experience, masters and professional membership, was working in the private sector my salary would be approx. 2.5 - 3.5 times my local government salary.
I chose the lower salary in the knowledge that I would have a decent pension and benefits including flexible working which small children and so on. I provide a public service.

If pensions slashed for public sector, will struggle to recruit qualified and experienced staff (to be honest, we already do, particularly younger people who aren’t as readily able to absorb cost of living as the older folk - who have often paid off mortgages/no student loans etc).

plus we haven’t had a pay rise above 2% in the last 10 years, and for several years was 0%

Sigh. If you want to attract the best and brightest you have to offer something to incentivise them. If I did my job at the level I do in the private sector I'd be paid triple what I am now - fact. Not me assuming, a fact because multiple of mu colleagues have recently been poached by the private sector on huge packages - and not just higher salaries but private healthcare, sometimes company car - so many benefits that the public sector could ever offer. If you take away the one thing that makes a slight positive difference for public sector workers no one good will ever work in government. And believe you me loads of idiots running the country will not be better for the taxpayer.

The entire pensions market should be reevaluated because if they means test the state pension then it will favour government and employees so we’ll end up with yet another winter system rather like the farce that we currently have with child benefit just for different reasons.

If the government actually wanted to save money they'd cut the state pension and increase pension credit.

They will never do that because pensioners vote.

Career average pensions are incredibly lucrative and I think a lot of people under-appreciate their value and how much they’d have to save to buy the same annuity. However, they are of more value to older employees. Eg a 23 year old planning to work for the civil service for 2 years would probably be better on a DC as have 60 years for it to compound. A 50 plus year old would be crazy not too go for the career average as they couldn’t match it in the stock market.

What people also forget when looking at them though is how old people are when they get them. If you take new schemes much before 68 you’ll be pretty heavily penalised

Pay and conditions in the armed forces are certainly not comparable to the private sector and the pension is the one advantage.

Ha i work in a field where there's a large private sector & a public sector body

The public sector half are paid so bloody badly its a running joke. Equivalent roles pay about half what you could get with the same experience on the private side. The better pension and flexible working are the only reason they can retain any staff at all.

The public sector have not had regular inflation based pay increases. I’m not sure where you have got that information from. I had no pay rise for several years in a row. My salary is also significantly less than a job in the private sector with a similar amount of responsibility and experience.

There are also very few people left who still have old final salary pensions. They were phased out many years ago.

Exactly this. It’s basically deferred salary.

People have taken those public sector jobs knowing they are earning less than they could get for an equal responsibility (or often far lesser responsibility) and skill private sector job, for the reason that they get a little bit of that difference made up for in the pension.

”Slash” those pensions and you’ll have far fewer good candidates applying for the jobs - which are pretty important as they keep the country going.

You certainly couldn’t slash the pensions of those already in the public sector.

This post just smacks of a real lack of understanding and a gullibility in swallowing Daily Mail hate-feed while.

Edited a small typo

I would get paid two or three times my salary in the private sector and would walk into this role essentially, many vacancies there. I don't have a final salary pension and small benefits such as decent pension provision are one of the things that keep me in my job. If I resigned, my job would be unfilled and the public essentially would suffer.

Only when we are paid the going rate for the equivalent roles in the private sector. If you look at what a solicitor or accountant gets paid in the public sector compared to private, the salaries paid in the public sector are vastly lower. If public sector pensions were ‘slashed’ then I guarantee you will see a mass exodus of people working professional roles. We are already finding it hard to recruit decent candidates into these roles because we cannot compete with the private sector. I already cover more than I should because of funding cuts, work above and beyond, into the evening. Have got up in the early hours of the morning when the rest of the family is in bed to get a head start some days to complete deadlines.

if my pension gets slashed then I will leave.

Exactly.

Yes it’s tax payers money but it’s also a service to tax payers. Do we really want our country served just by people who couldn’t get any other job or do we want to attract talent?

In fact I think this thread is so offensive I don’t think it can be real.

public sector jobs used to be seen as solid places for long term employment. the lower salary was offset by the security of tenure and a good pension.

round after round of cuts, years of being asked to do more with less, and being treated like crap...not surprising that people are no longer interested in working there. the pension is the one thing left and it's not as good as it was. take it away and you'd turn a staffing crisis into a terminal catastrophe.

The public sector did away with final salary pension years ago.

That's a amazing. They must be adjusting your final salary by RPI or CPI and it has compounded massively. 2/60. 1/30 * £2350 = £70,500. AAs (not that many exist any more) are on about a third of that now.

I think a good example to demonstrate just how poorly paid the public sector is compared to the private, is to look at the recently advertised role of head of the civil service to replace Simon Case.

it was for 200k, which at first glance might sound like a lot. But imagine how much a CEO of a company with 90k+ staff likely makes (I bet their annual bonus is more than that) and you see just how wide the disparity truly is.

I'm public sector (NHS), husband private sector.

Appreciate this is just one anecdote/case, but my pay reduced in real terms by 25% between 2010 - 2023 due to constant pay freezes or pay rises below inflation. My husband, by contrast, has annual pay rises. The OP's assertion that public sector pay increases with inflation is completely misguided.

Our pension scheme was reformed a decade ago - my pension will be based on average salary rather than final salary. Even though my husband's pension may on paper look like a worse deal, his pension will still exceed mine due to his higher earnings. He also gets perks I don't get, like annual bonuses and complimentary health insurance.

The OP refers to "our taxes" - the taxes we all pay for healthcare, education, social care, roads etc. etc. etc. Not sure if you've noticed recently how hard it is to get a GP appointment? How many teachers are leaving the profession early? How nursing and midwifery numbers have fallen since their bursary was removed? When I had my first baby in 2018 there were NO midwives able to see me for the first three hours of active labour. There was NO anaesthetic availability for the entire duration of labour in the entire hospital. When my child was severely ill in A&E with bronchiolitis I had to lie on a trolley with him for 24 hours because there were NO paediatric beds in the major teaching hospital where we were.

The public sector is crying out for more staff to deliver your services. Making the job even less attractive by "slashing" pensions sounds like a real smart move OP... Even if you saved some of "our taxes" get ready to fork out more money on private healthcare/insurance and private schooling when state services aren't there for you (as is already happening).

Sorry if this comes across as angry or bitter but it always baffles me how people can complain about the NHS/state schools/council and then in the next breath talk about reducing spending on staff because the money comes from "their taxes".

Regardless of the debate as to whether public sector pensions are too generous, is OP really suggesting that the government should cut the pensions that are being paid right now to retired public sector workers? Because that seems to be the implication of phrases such as "to start saving some of our tax money" and "At a time when pensioners have had the winter fuel payment removed" and "we apparently have a huge black hole to fill".

If so, give your head a very big wobble, OP. Why would anyone ever take a public sector job if their future pension was not guaranteed? And what would be to stop a future government — say, one from a party that thinks that most public sector workers are woke lazy good-for-nothings only one step up from benefit scroungers — taking another chunk? And then another?

Politicians definitely need to think about how pension entitlements are funded with a shrinking working-age population, but reneging on pretty much the most fundamental promise that the state can make as an employer would be a complete disaster.

It’s got to be done at some point. If I were PM I’d try to do it. I’d offer higher salaries now to get workers on side. I remember reading that something like 20% NHS workers aren’t even in the pension as they can’t afford to make the contributions. So I’d move everyone to DC pensions and raise salaries now. Politically this is very hard to swallow as it would put up near time costs but reduce long term liabilities. I’d also make state pension means tested, something like no state pension for those with other income exceeding higher rate tax threshold