To think public sector DB pensions should be illegal

[OneAmberFinch]

Everyone seems to accept that it's obvious that the private sector, speaking very generally, pays better salaries in-year but the public sector makes up for it in excellent defined benefit (DB) pensions.

As in, you get a certain amount paid to you indefinitely, based on how many years of service, your level reached, average or final salary, etc.

Everyone acts like this is normal but it is actually insane!

Growing up in school I was always taught that it was a fundamental principle of a parliamentary democracy that one parliament cannot bind another. Parliament should be able to override anything a previous parliament did, so that voters always have the ability to change course democratically and nothing is locked in forever.

But having DB pensions for public sector workers is binding future parliaments into very large financial commitments that will leave them increasingly less wriggle room.

It would be one thing if they were defined contribution pots that were in each individual's name. That would operate independently and doesn't represent an obligation on future governments to pay out pensions out of future taxpayer money, maybe future taxpayers who have different priorities for what they want to spend the money on.

AIBU to think public sector salary culture should, if anything, be the reverse: high salaries now, because the government is legally not allowed to commit to future compensation in another government's name?

Your main assertion is wrong.
Future governments are not bound by past governments on public sector pensions, they can change pensions and have done so over the years

I have been a civil servant since the 80s and have three separate pension schemes, and I will have an option under the McCloud judgement/remedy (this is based on a legal challenge to the enforced migration of staff between revised pension terms)

Civil Service pensions are covered by legislation passed through parliament, and this is why I have 3 separate pension schemes
My initial pension is a final salary based scheme and latest is an average salary based scheme

Any government can change the pension scheme by changing the legislation through parliament

I'm not the person who invented the concept of not binding future parliaments, but yes, I agree that debts also use a similar mechanism. I'm interested to discuss this with other posters actually. Do you think debt constrains future parliaments to an unacceptable level?

I'm not sure if I have a strong view on this yet, but my sense is that it might depend on the scale and level of repayments. Getting to a point where debt repayment each year is starting to significantly constrain other choices feels more wrong. But it feels less like a hard and fast rule to me because as you say, debt can be a useful financial tool if used appropriately.

Obviously it depends on assumptions, but I’d have thought it was obvious to anyone that the longer the time horizon the more imperative it is and we’ll have to do it eventually and the longer we continue with DB we’re just causing more debt for future generations

The goverment doesn't pay the pensions of local government officers - the LGPS does. This is funded by contributions by the employee and the employer, same as all pensions schemes provided by employers. The LGPS does not cost anyone outside the scheme anything - the funds are well investesd and pay for themselves. I know this as I worked for a Local Authority years ago in the eighties and was responsible for purchasing properties on behalf of the pension sheme in some of the most desirable areas of London's commercial areas - Canary Wharf etc - the income from these pays the pensions. There is plenty of information about this online - do your research before you post this sort of crap online just because you think some people have got something at your expnse.

Well my public sector DB pension is not better than I previously had in private DC pensions so I think this must be a generalisation. In any case, if I thought there was a risk to the value of my total package I wouldn't have taken the job either.

You're wrong. In local authorities particularly they have had round upon round of restructure and redundancies in the last 5 years in particular. With more to come with local government reform. And when I worked for an LA we weren't paid for the first two days in any period of sickness. Yes this is what the union negotiated on our behalf! Now I work for the private sector and the sickness policy is better and also more relaxed. On the subject of working contracted hours - you've never met a nurse, teacher or social worker I assume.

My DB pension is covered my employees contributions rhe fund is well managed and today my contributions are funding those who have retired. They are dropping the employers contributions because of a surplus. So no not all db pensions are paid by the government of whoever you think does pay them.

Just like our tax on our cinemas pays dor the state pensions od those pensioners today and when we retire the generations below me will pay for mine.

If we decide no DB pensions lets get rid of state pension too and everyone is accou table for financing their own retirement....happy OP?

Read the IFS report. It isn’t causing debt for future generations. It’s fiscally neutral.

You'd need to kill off the unions first

When I joined the Police Service 30yrs ago I was paying 11% from my wages to the pension - to be assaulted, work 24/7 & miss events.
In 2015 the Government changed things with one fell swoop, pay 14% and now work 35 yrs and get less.
Thankfully we sued the Government then our toothless Federation and won so this new pension came in, in 2022 instead.
I retired after 30yrs and hopefully will have a long retirement ahead of me, my husband was killed in 2001 on his motorbike aged 44yrs - got nothing from the government and his government pension died with him.
I knew what I signed up for and expected it for all the things I did & saw during my service.
what I’m trying to say is you join up if you want a decent pension & pray that the government don’t change it again 😬

Ps loving retirement- I feel it’s well deserved.

Careful what you wish for.

Teachers used to pay 6% contribution for a normal pension age of 60.

If I were still teaching I would be contributing 11% or so for a normal retirement age of 67.

There was no compensating pay uplift when these changes were made.

I would earn at least £15K more in the private sector. I would need to move from my home town though hence why I'm happy with my job as its handy for family life.

If DB pensions disappeared there would be a mass exodus out of the public sector unless wages were equal to private sector, its a horrible sector to work in and the thought of retirement is what keeps most of us going.

You do realise that the average NHS pension is £7300 per annum of which 20% is taken back in Tax. . Not exactly a fortune. Yes the minority of.long serving highly paid managers do get very good pensions linked to a career average salary, but not sure doing away with the one main benefit in Public sector is going to improve recruitment. The country needs doctors nurses firefighters, police, paramedics , teachers, prison officers etc. what would you be offering instead?

Don't you know your MN audience. I am not surprised at the poll standing! Those who want to be generous with the money pot, aren't so forthcoming when it applies to their personal benefits.

You are incredibly unreasonable.

The public sector pays substantially lower salaries for equivalent responsibility roles than the private sector. The pay off (and it probably doesn’t fully make up for it) is the decent - and it’s really not so fabulous any more - pension.

If we want the public sector to continue to attract good people, the pension is really the only thing we can continue to offer. Talented people so still go into the CS (for example) because of this - and I’m sure it’s the same for teachers, drs etc. We can’t expect them to just do it out of the goodness of their hearts- even though many do at least in part.

The CS certainly is very competitive still, it’s hard to get into, but it won’t be if there’s nothing to offer.

Very happy to also replace the state pension with well-funded private DC pensions :) I think Australia's superannuation model is more along these lines.

The same pyramid scheme accusations can be levied at the state pension, which is a DB pension paid by the taxpayer. No argument from me.

This……how many public sector staff are female? Who have had caring responsibilities and who have worked part time or shifts to manage family life? The Pensions for anyone who has worked part time for any periods are shocking

for anyone who thinks it’s so great get your job applications in

Where you cannot constrain a future parliament is to say for example, we are abolishing women’s rights forever. A future parliament can reverse that. The most interesting example of parliament reversing a previous parliamentary act is the creation of the Scottish Parliament in the late 1990s, reversing the Act of Union 1707.

What you are confusing is the actions of the state by the executive (previously the monarch, now the government, as in ministers etc) with the actions of parliament. Confusingly in the UK the executive comes from the legislature, when it is separated in some countries (most notably the USA). Parliament is the legislative arm of the state - the judiciary makes up the third arm.

Thus the executive can borrow and loan money and pays our debts and pensions (if you think binding parliament means we cannot pay the pensions of civil servants, then neither can we pay the state pension or benefits either). The executive can do what it wants within the law and part of the law is that states are allowed to enter into contracts with its citizens and with other countries. If we couldn’t do this then global trade and defence would fall apart in a heartbeat.

I would explain more, but you can look this stuff up on Wikipedia. I am not interested in explaining basic democratic concepts to idiots.

I think you should cast your mind back to who actually were the most important, required workers during the lockdowns.Who actually put their lives on the line for you and turned up for work, very few from home.
you’re pension shaming those same people.

pension was the only thing that kept us plodding on in the NHS

Okay, but just work with me here: why can't the government simply pay all of it upfront?

You're saying the pension is the only option to be competitive. So I'm assuming you're saying that they couldn't pay it now, today?

This is the equivalent of saying that they aren't adequately funding the pension scheme today. In theory, there should be no difference between a cash payout today, and putting the same money aside for a future pension - based on some actuarial calculation of equivalent values across the decades.

So either there's enough money to do this and it's not a problem so they might as well just pay the cash. OR there isn't enough money and the promise of the pension is just a lie that some future government is going to bear the brunt of. Which do you think it is?

They’re less generous for all staff! Everyone has now been moved into the 2015 scheme which is based on a career average salary! So everyone is getting smaller pensions, despite the fact they are paying in exactly the same percentage!

what are you hoping to achieve by this thread - only the rich can retire?

Pension-shaming. Now I've heard it all...

I think a lot of posters read the title of this thread and assumed a lot of things I haven't actually said...

Amused that you have an 80% poll going against your viewpoint so, democratically speaking, you're outnumbered.