What are you public sector lot up to on Weds then?

[CHAPEL END CHARLIE]

http://www.bbc.co.uk/news/uk-16021345

[bridge too far]

http://www.bbc.co.uk/news/uk-16021345

 

From that article, Lord Hutton says

 

"I don't think you can build long-term reform on forcing people out of saving for pensions, that is a crazy way to do it."

 

It'lll be our children and grandchildren that will pick up the tab for this 'crazy way' because they're the ones that'll have to pay more tax to fund the state support for all these OAPs in their poverty in years to come

[badgerx16]

http://www.bbc.co.uk/news/uk-16021345

"But he also said the unions had raised some genuine concerns....."

"I think there is a genuine issue between the unions and ministers about the pension contributions, which I hope is the subject of further discussion,"

 

A solution is in there somewhere, but both sides need to stop posturing and start negotiating.

[Thedelldays]

There was a strike?

 

Must have missed it!

[dune]

There was a strike?

 

Must have missed it!

 

Surely you must have heard about the whole country being paralysed.

 

Oh...

[Thorpe-le-Saint]

Surely you must have heard about the whole country being paralysed.

 

Oh...

 

At least we all agree now that these pensions are afforable, otherwise wouldn't the government carry out an audit on them to justify their cuts?

[CHAPEL END CHARLIE]

At least we all agree now that these pensions are afforable, otherwise wouldn't the government carry out an audit on them to justify their cuts?

 

I'm not sure if you mean that pensions are affordable for all of us, or merely a public sector elite. In any case that well know right wing radical Lord Hutton certainly doesn't agree it would seem:

 

"Growth is slower. We know that by 2016 on the latest projections the economy is going to be about 3.5% smaller than we thought it would be," Lord Hutton said ...... that is going to affect the sustainability of public sector pensions in a negative way"

 

This is key - it is not just about today, the real question is whether the system is to be affordable in the future. Another good question is how on earth you justify treating one set of (state) workers far better than the private sector bods who must ultimately pay for everything in society.

[bridge too far]

Not my words, but underlining many of the points I've made already:

 

[h=4]The facts[/h]Pensions in the civil service are far from generous and have been changed recently to a career average scheme.

 

The growing gap between public and private sector pensions is the fault of private sector employers retreating from decent pensions. The real divide is between executives in the boardroom securing for themselves large pensions with low retirement ages, and their workforces suffering repeated cuts.

 

It is counterproductive to degrade pensions because it will force more people into poverty and onto state benefits in their retirement – this is more costly and will have to be met by future taxpayers.

We all help to pay for private sector pensions through the price of goods and services. And we all help to contribute to public sector pensions through taxation.

 

Excluding the very highest earners, the average civil service pension is £4,200 a year.

More than 100,000 people receive a civil service pension of £2,000 or less a year: over 40,000 receive less than £1,000, and more than 60,000 get between £1,000 and £2,000.

 

Two and a half times as much public sector money is spent subsidising private sector pensions through tax relief than paying for public sector pensions – 60% of this goes to earners at the higher rate.

 

The Treasury’s estimate of the cost of public sector pensions as a proportion of the UK’s national output shows a modest increase from 1.5% to 2% by 2027/28. After this, projections show a slight decline.

[Viking Warrior]

Thorpe

 

Can I assume you only said this in jest I'm not sure if you mean that pensions are affordable for all of us, or merely a public sector elite. In any case that well know right wing radical Lord Hutton certainly doesn't agree it would seem:

[CB Saint]

Not my words, but underlining many of the points I've made already:

 

The facts

 

Pensions in the civil service are far from generous and have been changed recently to a career average scheme.

 

The growing gap between public and private sector pensions is the fault of private sector employers retreating from decent pensions. The real divide is between executives in the boardroom securing for themselves large pensions with low retirement ages, and their workforces suffering repeated cuts.

 

It is counterproductive to degrade pensions because it will force more people into poverty and onto state benefits in their retirement – this is more costly and will have to be met by future taxpayers.

We all help to pay for private sector pensions through the price of goods and services. And we all help to contribute to public sector pensions through taxation.

 

Excluding the very highest earners, the average civil service pension is £4,200 a year.

More than 100,000 people receive a civil service pension of £2,000 or less a year: over 40,000 receive less than £1,000, and more than 60,000 get between £1,000 and £2,000.

 

Two and a half times as much public sector money is spent subsidising private sector pensions through tax relief than paying for public sector pensions – 60% of this goes to earners at the higher rate.

 

The Treasury’s estimate of the cost of public sector pensions as a proportion of the UK’s national output shows a modest increase from 1.5% to 2% by 2027/28. After this, projections show a slight decline.

 

Come on play fair, if you are going to exclude the highest earners from your figures, you should discount the lowest earners as well.

 

I think comparing average pensions is somewhat misleading as the figures are distorted by those people who only worked in the public sector for say 10 years and didn't accrue a full pension.

 

I would like to know what the average pension is for those people who have managed to accumulate the full pension. That would make a much better basis for comparison.

[badgerx16]

I would like to know what the average pension is for those people who have managed to accumulate the full pension. That would make a much better basis for comparison.

 

Taking the LGPS scheme as an example: for all service up to 31/03/2008 you get 1/80 of salary as pension and 3/80 as a lump sum. for service after that date you add 1/60 of salary and no additional lump sum, ( although some pension can be exchanged for lump sum ). Currently this is a final salary scheme, but the Govt want to change it to an average salary, although entitlement already accrued will not be lost ( I think - though how you work it out I'm not sure ). So for any given salary level, it is fairly easy to work out :

 

As far as I can deduce the following are typical 'average' salaries in Local Government, so you should be able to work it out for yourself:

 

Office Administrator £16,700

Social Worker £27,000

Environmental Health Officer £32,000

IT Support Technician £20,800

[bridge too far]

Come on play fair, if you are going to exclude the highest earners from your figures, you should discount the lowest earners as well.

 

I think comparing average pensions is somewhat misleading as the figures are distorted by those people who only worked in the public sector for say 10 years and didn't accrue a full pension.

 

I would like to know what the average pension is for those people who have managed to accumulate the full pension. That would make a much better basis for comparison.

 

Easy to do. For the NHS, the maximum number of years used for the calculation is 40. And it is calculated on the basis of 1/80th per year of contribution.

 

So, let's say someone retires on a final salary of £25K and has contributed for 40 years. The pension would be £12,500. Most people earning £25K would be at junior management level.

 

Now let's look at another example, that of a clerical worker (outpatients clerk, medical records clerk for example). Their final salary at retirement might be around £16K. Let's assume that they too have completed 40 years' service. The pension would be £8K.

 

However, and this is where it becomes very important, a large number of NHS workers are female and most will not have completed 40 years' service because they will have taken time out for family reasons (either looking after children or elderly parents) and a large number of these female workers would also work part-time. My own pension is a case in point. I left the NHS before retirement, so my pension contributions were frozen. I worked for 11 years for the NHS and finished on an above average salary as a senior manager. My pension is £4K a year.

 

NHS staff contribute between 5 - 8% of salary to the pension scheme although, like a private sector pensioner, there is tax relief and a lower NI contribution.

 

In the last 3 years, the NHS scheme has changed. It is no longer a final salary scheme but is based on an average salary over the years of employment.

[CB Saint]

Taking the LGPS scheme as an example: for all service up to 31/03/2008 you get 1/80 of salary as pension and 3/80 as a lump sum. for service after that date you add 1/60 of salary and no additional lump sum, ( although some pension can be exchanged for lump sum ). Currently this is a final salary scheme, but the Govt want to change it to an average salary, although entitlement already accrued will not be lost ( I think - though how you work it out I'm not sure ). So for any given salary level, it is fairly easy to work out :

 

As far as I can deduce the following are typical 'average' salaries in Local Government, so you should be able to work it out for yourself:

 

Office Administrator £16,700

Social Worker £27,000

Environmental Health Officer £32,000

IT Support Technician £20,800

 

So, if I read that right, after say 45 years - you would be entitled to 56% of the final salary as well as lump sum of 20 months salary. (unless there are limits)

 

So taking the social worker they would have a pension of £15,120 pa and £45,000 lump sum.

 

Or if you were starting now, an annual pension £20k pa and no lump sum (again assuming no limits)

 

Just saw BTF response as well - beaten to it

[CB Saint]

However, and this is where it becomes very important, a large number of NHS workers are female and most will not have completed 40 years' service because they will have taken time out for family reasons (either looking after children or elderly parents) and a large number of these female workers would also work part-time. My own pension is a case in point. I left the NHS before retirement, so my pension contributions were frozen. I worked for 11 years for the NHS and finished on an above average salary as a senior manager. My pension is £4K a year.

 

This is the same irrespective of sector - women take time out and work part time in the private sector as well. So for the purposes of comparison they negate each other.

 

That is not to say that this is not important, it is, however this is more an issue with pensions as a whole as opposed to being sector specific.

[CHAPEL END CHARLIE]

From reading some of the moaning on here you could be forgioven for thinking that HMG was planning to abolish state sector pensions alltogether !

 

Don't worry so much all you 'key' workers and associated pen pushers. The facts are that you'll certainly still be getting a much better deal than a great many others in the workforce can ever hope for. According to Hutton you are being asked to pay a mighty 3.2% more (on average) and some of you may even have to work as long as the rest of us will.

 

How (not very) unfair.

[badgerx16]

So, if I read that right, after say 45 years - you would be entitled to 56% of the final salary as well as lump sum of 20 months salary. (unless there are limits)

 

So taking the social worker they would have a pension of £15,120 pa and £45,000 lump sum.

 

Or if you were starting now, an annual pension £20k pa and no lump sum (again assuming no limits)

 

Just saw BTF response as well - beaten to it

 

Remember that at current contribution rates, 6.5% of the Social Worker's salary would have been deducted to cover their contributions, my rough maths puts that at £79k over 40 years, although there is a small NI discount. If only we knew how many years each of us would be drawing our pensions for, it would enable us to draw neat and accurate comparisons !

[CB Saint]

Remember that at current contribution rates, 6.5% of the Social Worker's salary would have been deducted to cover their contributions, my rough maths puts that at £79k over 40 years, although there is a small NI discount. If only we knew how many years each of us would be drawing our pensions for, it would enable us to draw neat and accurate comparisons !

 

One of the things that the public sector have done well, is the level of personal contributions that are required. I only wish that when I started in the big bad world that my employers had done the same for me, instead of letting me figure it out for myself many years down the line.

 

What I do know is that "they need to get on with it and have the final soltion sorted out and then leave them alone. All this chopping an changing does not encourage people to save, as they do not trust that the goal posts will be moved again. Whilst this is about public sector pensions at the moment, I am sure it is having a detrimental effect on the private sector employee's view of pensions. In fact, in the words of a 22 yr old employee today when asked if she was joining the contributory scheme - "what's the point, it won't be worth anything when I retire"

[buctootim]

The argument over what constitutes a 'good' pension for people on different wage levels and lengths of service is interesting but irrelevant to the question of whether it is affordable.

 

If pensioners keel over after 5 or 6 years of drawing a pension then it is likely affordable. If life expectancy increases (in part because of increasing spend on the NHS) and they draw a pension for 20-25 years -the maths dont work anymore. Any comnbination of increasing contributions, delaying retirement age and trimming benefits is not some ideological crusade, its pretty much common sense.

Edited 5 December, 2011 by buctootim

[Viking Warrior]

The Scottish LGPS was changed from April 2009 - There was no strike or industrial action then from what I can recollect

 

New contribution rates in Scotland from 1 April 2009

From April 2009, scheme members will no longer pay a flat contribution rate. Instead, a five tier contribution system has been introduced - with contributions based on how much of your pay falls into each tier. This has been designed to give more equality between the cost and benefits of scheme membership.

 

If you work part-time, your contribution rate is worked out on the whole-time pay rate for your job, although you will only pay contributions on the pay you actually earn.

 

Here are the tiers from April 2009:

 

Whole Time Pay You pay a contribution rate of:

On earnings up to and including £18,000 5.5%

On earnings above £18,000 and up to £22,000 7.25%

On earnings above £22,000 and up to £30,000 8.5%

On earnings above £30,000 and up to £40,000 9.5%

On earnings above £40,000 12%

 

 

 

The pay ranges will be increased each April in line with the cost of living.

 

Let's take a look at someone who works full- time at a pay rate of £22,000.

They'll pay 5.5% on their pay up to £18,000, and 7.25% on the next £4,000. That gives an overall contribution rate of 5.8% - around £106 a month in contributions.

 

If they were working half-time, they'd still pay the same contribution rate. That's because the whole-time rate for their job is still £22,000, but their contributions would be based on their part-time earnings, so instead they'd pay half - around £53 a month.

 

If you pay tax and National Insurance, you'll get tax relief on your contributions and pay a lower rate of National Insurance, so the actual cost to you is less.

 

If you're currently an employee paying a protected rate of 5%, your rate will be changed in the same way as all other scheme members from 1 April 2009.

[badgerx16]

From reading some of the moaning on here you could be forgioven for thinking that HMG was planning to abolish state sector pensions alltogether !

 

Don't worry so much all you 'key' workers and associated pen pushers. The facts are that you'll certainly still be getting a much better deal than a great many others in the workforce can ever hope for. According to Hutton you are being asked to pay a mighty 3.2% more (on average) and some of you may even have to work as long as the rest of us will.

 

How (not very) unfair.

 

What irks is not paying more per se, it's Government ministers publicly admitting that this has nothing to do with addressing the affordability ( or not ) of pensions by pumping the extra funds into the schemes, and everything to do with raising money to assist the Treasury's efforts to trim the deficit.

[bridge too far]

So, if I read that right, after say 45 years - you would be entitled to 56% of the final salary as well as lump sum of 20 months salary. (unless there are limits)

 

So taking the social worker they would have a pension of £15,120 pa and £45,000 lump sum.

 

Or if you were starting now, an annual pension £20k pa and no lump sum (again assuming no limits)

 

Just saw BTF response as well - beaten to it

 

The cut off point for reckoning is 40 years' service.

[CB Saint]

The cut off point for reckoning is 40 years' service.

 

That was the bit you beat me to!

[bridge too far]

That was the bit you beat me to!

 

Oh sorry! Can I just add something, though. Whilst it would probably be difficult, it is possible for an 'at home' woman (or man) to continue to pay into a private scheme, albeit the 'employee' element only. AFAIK that isn't the case with a public sector pension.

 

I suspect that there aren't that many public sector employees that work the full 40 years. The exception might be doctors (GPs as well as consultants) and nurses. Both groups can retire earlier than 60 / 65 ATM, although I think the proposals would mean a nurse has to work until s/he is 68 as would a therapist, such as a physio (I can see that that would be difficult, physically).

[Lord Duckhunter]

So Lord Hutton a former Labour minister tasked with looking at pensions says that the Govt deal is "perfectly credible". Flys in the face of what the Brothers have been saying, and now shows how irresponsible the "strike" was.

 

"The former pensions minister told BBC Radio 4's The World This Weekend that his original assessments about the sustainability of future pension arrangements had been too optimistic."- I lost count of the number of posters on here, who quoted Hutton saying they were sustainable. As circumstances have changed, he's changed his mind. A sensible approcach to any problem.

 

He says "we could be heading for the rocks unless we make adjustments now."

 

In light of this, the Brothers should sign the generous deal and thank their lucky stars they've still got a pension based on their salary.And the Labour party should get out the pockets of the unions, and tell it how it is. Even that old leftie Kinnock stood up to them more then Red Ed is...........

[um pahars]

Another good question is how on earth you justify treating one set of (state) workers far better than the private sector bods who must ultimately pay for everything in society.

 

Tony Wilson of the Evening Standard wrote this on the very subject:

 

"The real scandal in pensions is the way a combination of misguided accounting standards and crassly ill-considered government tax and regulatory policy has destroyed private-sector pension provision over the past 20 years.

 

But rather than seek to right that wrong, the Government has embraced the notion that it is "unfair" that public-sector schemes have not been similarly destroyed.

 

Why else should it be a criticism that public-sector pensions are "more generous" than those of the private sector?"

I do agree that there is a very real danger of there being a race to the bottom and all we are doing is solving our short term debt crisis, only to be hit by a much larger problem in the years to come.

 

I think there have to be changes to the Public Sector pension schemes, but I am very concerned that the current short term quest for austerity has overshadowed a more realistic and honest debate on the future of the Public Sector pensions issue (as well as creating an even bigger problem if increased contributions and a downgrading of pensions means peopl opt out or do not sign up).

[Jonnyboy]

I'm not sure if you mean that pensions are affordable for all of us, or merely a public sector elite. In any case that well know right wing radical Lord Hutton certainly doesn't agree it would seem:

 

 

 

This is key - it is not just about today, the real question is whether the system is to be affordable in the future. Another good question is how on earth you justify treating one set of (state) workers far better than the private sector bods who must ultimately pay for everything in society.

 

When your boss rocks up in his Bentley do you doff your workcap?

[Jonnyboy]

Anyway, didnt I read that MPs get the best terms out of anyone yet they arent proposing to change their pensions?...

[CB Saint]

Anyway, didnt I read that MPs get the best terms out of anyone yet they arent proposing to change their pensions?...

 

Turkeys voting for Xmas, anyone?

 

Now that we have career politicians, they need a decent pension, because what else are they going to do when they don't get re-elected. After all they sacrifice so much, so that we can have a better life

[um pahars]

Anyway, didnt I read that MPs get the best terms out of anyone yet they arent proposing to change their pensions?...

 

The Cabinet are due to make changes to their pension contributions that will cost them a decent wedge. However, it is somewhat relative and probably not going to hit the 13 millionaires on Cameron's front bench!!!! All in it together!!!