Public Sector Pensions Reform - About friggin time..

[BLOCK F]

I find it quite incredible that some on this board continue to suggest that public sector pensions can go on as they are.
They are unaffordable and inequitable and even following Hutton's recommendations they are are still a very good deal and far superior to the pension schemes that many private sector employees can enjoy.
I haven't read the whole thread and someone may well have pointed out how much of a pension pot many private'sectorites' like myself have to try and accumulate to afford even a modest pension.
Public sector employees ,be grateful for what you have had and what you have still got.My father,mother and sister are all ex public employee retirees( doctor,nurse and teacher) and have no real idea what it is like for 'privates' such as me trying to fund my pension pot!

 

[nicko31]

I find it quite incredible that some on this board continue to suggest that public sector pensions can go on as they are.
They are unaffordable and inequitable and even following Hutton's recommendations they are are still a very good deal and far superior to the pension schemes that many private sector employees can enjoy.
I haven't read the whole thread and someone may well have pointed out how much of a pension pot many private'sectorites' like myself have to try and accumulate to afford even a modest pension.
Public sector employees ,be grateful for what you have had and what you have still got.My father,mother and sister are all ex public employee retirees( doctor,nurse and teacher) and have no real idea what it is like for 'privates' such as me trying to fund my pension pot!

Yes indeed they have no idea of the true cost, I not blaming them but they are just isolated from what its like to fund your own pension. It takes roughly £100k pot to get £5k p.a, that takes a lot of saving and a lot of sacrifices. My wife's company recently closed their final salary scheme (which has become average salary) as the liability for the company became too big. And thats exactly the problem UK.gov has. There is an alternative, get a job in the private sector, weigh up it up and decide, that might sound harsh but we can't afford it..

 

[kalinski]

Yesterday's news from the Hutton enquiry will ensure the government press ahead with much needed reform of public sector pensions. With virtually no FTSE 100 company left offering a final salary scheme it clearly demonstrates the situation in no longer substainable. The rest of us have had to learn to adapt, welcome to the real world. Sorry Mr. Fireman, you can retire at 55 in future, but your pension will reflect that. I have no doubt the Unions are going to cause us shit loads of grief, but they are wasting their time, there's no going back...

For each £1 govt spends on the public sector pensions £2.50 is spent on tax relief on private sector ones.

step one for Cameron - remove tax relief on pensions of high earners in private sector. step two why not up MPs contributions to their lucrative FINAL SALARY scheme then I might listen to Hutton

 

[kalinski]

Yes indeed they have no idea of the true cost, I not blaming them but they are just isolated from what its like to fund your own pension. It takes roughly £100k pot to get £5k p.a, that takes a lot of saving and a lot of sacrifices. My wife's company recently closed their final salary scheme (which has become average salary) as the liability for the company became too big. And thats exactly the problem UK.gov has. There is an alternative, get a job in the private sector, weigh up it up and decide, that might sound harsh but we can't afford it..

I think that most of us have an idea of the true cost of working in the public sector, with lower wages. Most of us have contributed a % of our salaries since we started working in the public sector. The problem is all those in the private sector that haven't set up or contribute to a pension (62% are not saving for their retirement) so why am i paying for them? This is where the major cost of the ageing population will come from.

Yes the public sector pension is reasonable, in the main. But, all who will have a reasonable pension have contributed for at least 30 years to make it so good. The main issue, when quoting politicians is that they are desperate for us to see things in black and white, but sadly it is more complicated than that. I am not contributing to my own pension for 30 years to lose its benefits to pay for all the private sector who don't.

 

[adrian29uk]

well i will be jacking in my nhs job then, no point staying if the pension goes, i can earn more elsewhere.
The nhs will have no one left if they knock the pension benefits on the head. Or no one any good.

Can I just say you deserve every penny you get. For the job you do, you do deserve a half decent pension end of. The way the media and the goverment has demonised public sector workers and turned some of the general public against you is absolutely disgusting. People seem to have forgotten how much these politicians screwed the expenses.

 

[BLOCK F]

I think that most of us have an idea of the true cost of working in the public sector, with lower wages. Most of us have contributed a % of our salaries since we started working in the public sector. The problem is all those in the private sector that haven't set up or contribute to a pension (62% are not saving for their retirement) so why am i paying for them? This is where the major cost of the ageing population will come from.

Yes the public sector pension is reasonable, in the main. But, all who will have a reasonable pension have contributed for at least 30 years to make it so good. The main issue, when quoting politicians is that they are desperate for us to see things in black and white, but sadly it is more complicated than that. I am not contributing to my own pension for 30 years to lose its benefits to pay for all the private sector who don't.

Kalinski,the comparable wages in the public sector are higher than that in the private sector.
Yes,those in the public sector have contributed to their pensions since they started work and so have many in the private sector.The difference being is the amounts that the individuals and employers have contributed for the benefits that accrue to the individual.The tax payer is contributing too much towards public sector pensions and the individuals too little.
Unfortunately,the problem is not just confined to those in the private sector who have failed to set up pension provisions;it is a problem for many on modest and average salaries who have joined pension schemes.The lucky public sector have not had to worry about the stockmarket which is substantially lower than it was over 10 years ago and don't even get me started on annuity rates that have fallen dramatically over the last few years.
I had to smile when you say'I am not contributing to my own pension for 30 years to lose its benefits to pay for all private sector who don't.'What about all the private sector who have to work for ever longer to keep the wolf from the door and pay taxes so the public sector can retire well before many 'privates can even consider it!How much of my Council Tax goes towards funding local authority pensions?25% I believe,although I do stand to be corrected on this.
You've had it easy,and the proposals are still pretty generous.Believe you me you would not want to swap your pension for the majority of private sector deals,I can tell you that.
Make the most of it,enjoy your retirement and thank your lucky stars you haven't been dependent on the stockmarket and annuity rates for your pension.I am and it is no fun.

 

[Hatterlovesbrighton]

I suspect the wrong people will be hit by this, and I'm not necessarily blaming the government. The people at the top end of the public sector will almost certainly find a way to protect their pension, whilst the people at the bottom of the pile will have to work longer, pay more into the scheme, and recieve less once they finally retire.

I very much hope I'm wrong. But it seems to me that the people who work the hardest are usually the ones to take the biggest hits.

I agree something has to be done - I just hope that the correct people are protected.

The move to a career average scheme won't affect lower paid workers too much if they stay at the same level for most of their careers. The people that will be affected most will be those that get promoted and paid more esepcially if these promotions are relatively late in their career.

 

[Curious Orange]

Right, time to stick my oar in, and I'll state my interest in the subject as someone who formerly used to administer Annuity policies. Now even when I was doing that job some 8/9 years ago at very best (male, smoker) you'd get an income that was about 10% of the value of the pot. We thought that was bad then, things have got worse since from what I can gather, and the recent court decision to bar the use of gender from making risk assessments will not help at all.

What I am trying to illustrate is that funding people's incomes in retirement is expensive irrespective of whether you are in the private or public sector. If you want a good income in retirement you have to accept some personal responsibility for funding it. If you are making contributions to your pension pot don't for one minute think that the minimum will suffice.

 

[folkestonesgull]

i work in the public sector and contribute just under 7% of my pay to my pension. Whilst I think my scheme is currently final salary i've always thought that is unrealistic and it should be linked to average career earnings and inflation somehow....My wife is a teacher and she contributes about the same as me - with local govt pensions these are then invested - i dont think currently there is a local govt pension 'black-hole' at all thats in the civil service with just 1-2% contribution made in to the tax pot and not invested by the government....this really needs to be looked at urgently, with a falling proportion of tax payers to the population how someone can retire at 55, on a full pension and live for 35 years does not make any sense - how many tax payers will need to earn to support that?

So wide range reform is REALLY needed....my concern is that as with most things this government have done it will be rushed through and full of mistakes....

 

[beorhthelm]

For each £1 govt spends on the public sector pensions £2.50 is spent on tax relief on private sector ones.

step one for Cameron - remove tax relief on pensions of high earners in private sector. step two why not up MPs contributions to their lucrative FINAL SALARY scheme then I might listen to Hutton

really? is that taking into account the taxed income when the pension is drawn... i bet not. is the solution to remove tax relief and at a stroke cutting private pension funding by at least 20%? who is this going to help? you may not be aware that relief stops at contribution over 50k.

though it would be quite right for MPs to review their pension in line with whatever proposals are adopted, to show how its in the greater interest of all.

btw, you're not paying for those that dont save for a pension, they will get nothing more than the state pension.

 

[Curious Orange]

btw, you're not paying for those that dont save for a pension, they will get nothing more than the state pension.

Strictly speaking, everyone who is making National Insurance contributions is paying for everyone on the state pension... but that is another issue altogether.

 

[m20gull]

Tax relief on pension contributions is only tax deferred as pension income is taxed. And yes, there have been quite a few changes to limit it for high earners.

No black hole in Local Government funded schemes? http://www.bbc.co.uk/news/business-11996504 Not everyone agrees with that.

 

[m20gull]

Strictly speaking, everyone who is making National Insurance contributions is paying for everyone on the state pension... but that is another issue altogether.

I think that's just everyone who is paying tax is paying...

 

[kalinski]

btw, you're not paying for those that dont save for a pension, they will get nothing more than the state pension.

Who is going to pay their housing and health costs then? 62% of Private sector doesn't contribute, that will be one hell of a hefty bill

 

[Herr Tubthumper]

Can I just say you deserve every penny you get. For the job you do, you do deserve a half decent pension end of. The way the media and the goverment has demonised public sector workers and turned some of the general public against you is absolutely disgusting. People seem to have forgotten how much these politicians screwed the expenses.

This.

 

[beorhthelm]

Who is going to pay their housing and health costs then? 62% of Private sector doesn't contribute, that will be one hell of a hefty bill

as pointed out above, thats what NI is for. and general taxation. you understand the welfare state, right? yes, state pension is going to become a hefty bill, expect some reform in this area too. and alot of poverty for those that have no other savings.

 

[Curious Orange]

I think that's just everyone who is paying tax is paying...

If NI can't cover the costs of all the state benefits that it is supposed to cover then something is clearly wrong.

 

[m20gull]

For each £1 govt spends on the public sector pensions £2.50 is spent on tax relief on private sector ones.

Is that just private ones - what about the relief on contributory public schemes?

I've been away to get some more numbers:

According to Hutton - Annual public service pensions expenditure is expected to rise to £33.2 billion by 2015-16, an increase from £32.9 billion forecast in June 2010.
From the Pensions Policy Institute Link here - net tax relief from private schemes = £31billion in 2008/09

 

[grummitts gloves]

So if a Police Officer pays 11% each month in pension contributions from their salary for 30 years, how much does that cost the tax payer (which includes said Police Officer who has also paid income tax and N.I. for those 30 years)?

 

[m20gull]

So if a Police Officer pays 11% each month in pension contributions from their salary for 30 years, how much does that cost the tax payer (which includes said Police Officer who has also paid income tax and N.I. for those 30 years)?

for an officer retiring after 30 years on a salary of £30,000 cost to the tax payer is about £470,000 of which the PC has paid about £13,000 (share of tax/NI used for public sector pensions)