What is the justification for police and civil servants getting final salary pensions?

[ladykale]

Does anyone know?

Who is funding these generous pensions if they haven't put enough in all their life / value of investments isn't equal to the value of their pension??

I think that it should be pointed out that until the government fucked around with the teachers pension it was one of the few(if not the only pension scheme) that was actually self sustaining.

You get an average salary pension now. Plus I pay a massive amount into my pension every month. Plus my job is really low paid (starts 23.5k) for the level of risk and stress I can experience on an average shift.

It's also worth pointing out that defined benefit schemes have minuses as well as pluses. If I retire at 67, and drop dead after six months, I will have paid in 9% of my salary for 40 years for six months of a modest pension. If I had put that money in a private pension, I would be able to pass it on to children/grandchildren. So no scheme is without its downsides.

I don’t know why people love whinging about teacher’s holidays and police pensions so much, if you really fancy it go and bloody join them!

Bah, the truth is that people don't want these jobs. Not enough teachers and quite of lot of criminals or perverts in the police.

Another person agreeing 100% with your post, Magenta82. I have no idea how people in their 30s and younger will fund their old age.

My friend is on75% final salary and retires at 50 so has 5 more years to go.hes police but always been very cushy job.

Another friend is on final salary retiring at 55 but it's a bit unusual what she does and it ex private sector in a really important infrastructure role that they need to keep attracting people to and training up people to dealwith in the future. Am very jealous that she gets to retire in a decade on her high wage. She probably earns half what I earn now but will not work for 10 years more than me. It's unusual role and the benefit is worth it in her case.

This just happened to a colleague who hadn't even gotten 3 months of retirement after 40 years of service. His funeral was today, bless him.

Final salary pensions are extremely expensive- think contributions equal to 25-30% of salary per year. The private sector doesn’t do them anymore as they are unaffordable. The idea that everyone can just have whatever they want regardless of the cost is childish rubbish

public sector workers still get benefits like this because they are unionised and effectively have a monopoly on public services. It’s very costly for the taxpayer and time to do away with it imo

That’s worked out in the cost to the employers- average life expectancy is much longer than it was hence why these pensions are so expensive

We don't. HTH

We don’t have to do these jobs to have a say in our taxes being used to fund overly generous benefits. Not everyone wants to do a particular job - doesn’t mean it should be vastly overpaid.

i personally think public sector should have dc pensions like everyone else.

Also public sector here. I'm on at least £20k less than I could get privately, and the pension is what keeps me here. I've got 21 years to go and should retire and not be destitute. Hopefully.

My job most certainly isn't vastly overpaid. I could walk out of it tomorrow and earn at least double in the private sector (many multiples if I wished)

For what it is worth the career average schemes are still amazing (although with the downsides that others have put forward re death). For better or worse they keep people in jobs who might have otherwise left. This can be a good thing (especially where retention issues in some professions) but also a bad thing where people hang on for the pension even though they hate their job.

I am starting to think that things would be better off if salaries across the public sector were raised especially in shortage professions and the pension benefits changed. That would give people more choice about their own spending (eg Nhs contributions are high and some opt out because of that). And would possibly avoid people feeling trapped because of the pension.

Dear god, do you not understand the fundamental difference between defined benefit and defined contributions?
“Who is funding these generous pensions if they haven't put enough in all their life / value of investments isn't equal to the value of their pension??”
🤦‍♀️🙄
EXACTLY the same people who’d be funding it if it was a defined contribution pension.

exactly the real why the general working people Latino has been scammed to think that making paying into a personal pension mandatory now in their own name was a better option than raising NI “tax” to pay a decent pension to everyone at retirement

defined benefits ( which expel forget is what the state pension is) creates a fund where risk and costs are spread over many, many people. One pension pot for everyone. Everyone (employee) pays in and the employer pays in. Same whether private or public - days of Free contributions ended years and years ago even for public sector. Just so happens that for public workers the state pays becuase, erm, that’s who employs them 🤦‍♀️.

Define contributions are individual pensions pots . Doesn’t matter if it was public or private. Again, just the same as before, the employee and employer pays. Often at similar levels as a defined beneift scheme. BUT: the risk and rise and falls in markets, the cost of managing the pension pot (including fund managers ) is now dumped on one single person. Mostly these people don’t understand how investments work, how to plan life changes 8n that pot, let alone how to use their pot to get the best type of pension. Money is literally piling into the hands of fncnial companies , both ensign companies and investment companies becuase they can now charge 1000 people indivually, vs one set of charges covering 1000 peoples worth of pot . Both defined benefit and defined contribution invest money in same way - that’s not the issues, is the the sheer numbers of accco7nts now reaping massive rewards fr who? The financial sector.

defend contribution is the Bain of companies life , not becuase of how much it cost in terms of paying in, but being able to forecast and set capital aside for future payments- no ne knows how long each of their employees will live. In a defined contribution they can eliminate that unknown. They pass that unknown to you, pay into your pot and it’s you that has to decide what income to draw down to make that m9ney last for however long you live - which some people fail to get right becuase, guess what, it is bloody hard to do, and why defend contributions are such a risky product for the employee.

I never could understand why the unions and conundrum weren’t up in arms when the government came up with the new personal pension law which piles yet more money into hands of financial institutions and their shareholders, instead of ensuring all their citizens were given a decent “defined benefit” (albeit a fixed sum not final salary ) state pension annuity by increasing NI . Of course the conservatives wanted to do this, run down state pension means cost less to the state, and shifts all the risk to the individual, and puts money in their personal pockets form all the investments and interest they hold in financial institutes. The population has been ripped off and it makes me so angry that people don’t get this.

Good points made by Whiteroomjoy explaining the difference between defined benefits/contributions and the lack of opposition to pension changes I have a pension which switched from defined benefit to defined contributions. If I log on to see the current value, the difference between the two systems is really apparent. The defined contribution bit has fallen in value.

Presuming you understand the meaning of the words "average" and "final" how can you possibly think the two are the same?

Isn’t the police pension pretty much self funded?! I think they pay shed loads every month.

@PlainJanePerfect @unfor sorry this is a belated reply but my understanding is if you die within a short time of claiming your pension your estate receives a lump sum. For me it was 3 years I think. Check with your pension schemes.

Because there is a finite pot of government money- ie there is one slice of bread. Instead of just one person having it, it’s fairer if it’s shared. Does that help? We can’t just say well everyone should just get a huge pension because that’s not affordable

Not by the employee contributions no.

For that same job? I doubt it. I have done the same type of job (qualified professional) in both public and private sector. I earned more in private (unusually due to my sector) but I easily worked twice as hard in the private sector. Stats show public sector are better paid once you take pensions into account

Well since you are aware it has stopped, why does it need to be justified?

Yes. Same job. Doubt away.