MPs Pension schemes (& other text funded pension)

[HandlebarLadyTash]

Why are we not putting pressure on the government & councils to stop these schemes being publicly funded.
How can they justify these pension schemes when we are paying for them & so many other areas need the money.
The world of work & pensions has massively changed in the last 20yrs & it feels a bit like one rule for some & not for other. Many people are in low paid jobs without the pension perk of the gov propped up pensions. Also as they are accessible below the retirement age of 67 does that tot highlight how difficult is it for people to work until 67 without slowing down.

Please dont destroy me, educate me.

Yes, the commutation rates for taking DB pensions early are enormous. I would lose 45% of my tiny LGPS pension if I were to need it now, 10 years early.
Forces pensions changed the year after DH left the RAF, he gets his at 60, it will be about £6k a year (for 12.5 years service) with a £18k lump sum, we are very fortunate to have it, we would have had to spend £150k in extra contributions to get anywhere near it, £4000 a year at least, we couldn’t have done it.

@GenderApostatemk2 that seems very low, what rank did he get to if you don't mind me asking?

@nanabow - the employee contributions are tiny compared to the cost of providing the benefits. Also the risk of providing the benefits is entirely with the taxpayer (or in the case of funded schemes, the scheme). This is a huge cost to the taxpayer with no benefit.

@titchy

I'm pretty sure I read an article about how some universities pay out almost the same in pension payments as they do in salary of current staff.

That's incorrect. Universities don't pay pensions, the pension scheme (USS, TSS or LGPA) pay them. They guarantee the USS one which is an accounting line but to date nothing has been claimed. Maybe the article was referring to employer contributions which are I think getting on for 30%

You're right. I've looked it up again and It's not as black and white as I put it.

But there was something to do with the amount of s**t the university pension schemes were in and that the cost to university of basically 'bailing' them out.

So now the combined contributions are insanely high. But not all of the employer contributions go into the employees 'pot'. A % of them has to goes into the deficit for the current retirees.

This is a huge cost to the taxpayer with no benefit.

The benefit is staff recruitment, retention and output. If you think a country can run itself by hiring staff on minimum wage and minimal benefits across the board then you're mistaken. I'm not saying the civil service is perfect (it's far from it), but would you want your benefits, educational policy, national security, environmental policy etc etc being developed by people being paid pittance? If you want skilled people in these roles you need some incentives, and it's well known that pay across the sector is often less competitive, so the security of the pension is a powerful retention tool. (again not saying perfect but certainly not "no benefit" to tax payers, and to anyone disgruntled about it, we're always hiring).

Deviating a little, but it's only USS which is a shitshow where the scheme has to increase contributions to prop up the scheme for existing pensioners. And USS isn't actually a public sector scheme so outwith the topic of this thread.

@titchy

Deviating a little, but it's only USS which is a shitshow where the scheme has to increase contributions to prop up the scheme for existing pensioners. And USS isn't actually a public sector scheme so outwith the topic of this thread.

I know.

It was purely an example of how the private sector has struggled with final salary.

userchange987 - he was a JT ( Junior tech) armourer/trade group 1.
He was in from 1983 - 1995 and was on about £17k when he left iirc.
The £6k is purely a guestimate going by other ex-armourers he knows. Hopefully it will be more.
He will get a proper idea of his actual pension when he gets a pension forecast from the FPS.

Sorry OP, but it is a race to the bottom.

And what savings would be made really? What exactly do you think would happen to people in their old age?

The problem is that the private sector require financial incentives to put in place decent pensions - they won’t do it without that. Or they need to pay decent wages such that people can afford to save for retirement.

So we need to have decent workforce representation - so that employees can push for decent pay and conditions.

Why should we accept that it’s acceptable for businesses to make huge profits yet pay their staff so little?

@iggly
'Why should we accept that it’s acceptable for businesses to make huge profits yet pay their staff so little?'
Yet another good question

I don't understand your argument. You don't want govt and council employees to have a pension...
Why are we not putting pressure on the government & councils to stop these schemes being publicly funded.
But at the same time you're happy for people to have pensions...
I dont begrudge anyone a pension
So I'm not sure what you're saying.

When I was younger (long time ago!), it used to be that public bodies did not pay highly but had guaranteed pensions. Whereas private work paid higher but pensions were less reliable, ie redundancies, pensions going bust etc.
I don't think that's true anymore. But it's one of those things that kids leaving education should be factoring into their future employment.

DH does a public sector role. They take a compulsory 10% of his salary for the pension scheme, and then we are allowed to sacrifice up to an additional 12% ourselves (22% in total), so it is definitely not a case of taxpayers funding everything whilst workers contribute nothing. I think the bigger issue is that the defined benefit scheme just isn’t around anymore for the wider public, but surely it would be better for enormously rich private companies to slice of a little bit of their margins to bring those schemes back, rather than racing to the bottom so that everyone has to live on poverty wages in retirement.

Also, as others have pointed out, a lot of these roles—especially senior technical ones—would offer a much higher salary in the private sector. The defined benefit retirement scheme is a big selling point to recruit highly educated and experienced people who could be paid a lot more elsewhere.

[quote HandlebarLadyTash]@iggly
'Why should we accept that it’s acceptable for businesses to make huge profits yet pay their staff so little?'
Yet another good question[/quote]
It’s a linked question.

I am tired of so many questions end up being targeted at why should “we” end up paying for a quiet majority of people who are working and contributing to society? Without those people, our society would be a pretty shit place.

The problems in society are not those on lower and middle incomes who want a decent standard of living.