Subsidising those public sector pensions

[Pudding]

As someone who has had to move back to the UK because of a failing private sector pension, I cannot help feeling a bit miffed to say the very least with those who have gold plated public sector pensions which, through income and local council tax, I am still obliged to subsidise.

I've a good idea that there are many in both France and Spain sitting pretty on this,  so I'll throw this discussion to the wolves and see what remains.

Envious? you bet.  Concerned about the tax burden being passed on to my kids? Oh yes.

[Gluestick]

Sadly, Pudding, as more and more private sector pensions vanish as corporate plans crash and burn over the next couple of years, we will all be subsidising many more.

And as the disastrous performance of pensions funds managers are already showing, I fear that many will be struggling to survive.

But not such as Sir Fred Goodwin you understand.................

And all the other architects of the disaster.

[:@]

[Benjamin]

This is not a dig at ex-local authority workers but I was very shoked to hear a repot a few days ago (on the BBC, I think) that one fifth of all council taxes are spent on paying existing pensioners. This is surely unsustainable for future generations to bear when so many are suffering and going to suffer as this debacle has to be paid for by our children and future generations.

[Gastines]

Yes but do you think anyone in power is ever likely to amend things? Perhaps they might spare a thought after they get their £40.000 EXTRA that they are after. After all it appears that M.Ps pay is first and they make the decisions that affect the rest of us.

Regards.

[ali-cat]

Okay;  I'll play.

With deepest sympathies to those who have lost out;  presumably you chose to work in the private rather than public sector and that this choice was because the private sector held certain attractions to you.  In purchasing a private pension you purchased an investment vehicle like shares or property.  Like negative equity in property a shrinking pension is the flip side of the boom years.

Public sector pension schemes are part and parcel of the terms and conditions of work which otherwise, by and large, are much less attractive than those in the private sector whether it be salary levels, annual pay rises, performance rewards, career opportunities, workplace conditions, job satisfaction etc.  In comparison to comparable private sector opportunities, its small wonder that civil service management level jobs in London a few years ago had to be filled by casual staff.

I'm sure you're right to feel aggrieved that your investment didn't return what you were led to believe it would but I fail to see why you should then be miffed with public sctor workers - were they in some way responsible,  If you do wish to question the very existence and likely future costs of public sector pensions that is an other issue entirely.  Given the choice over again, knowing what you now know, would you have chosen to work in the public sector?

PS - Public sector workers pay tax also.

Mr Cat

 

 

 

[Gluestick]

I might also play later, Mr Cat.

For now I'll hold my fire and see what other's perspectives are.

[blink]

[Frederick]

  This public sector worker was paying 13% of salery towards his pension .

[krusty]

[quote user="Pudding"]

As someone who in part has had to move back to the UK because of a failing private sector pension.

[/quote]

I thought a pension once in payment can not be touched ? .........Or have I got a shock coming any day soon ?

[Chancer]

Dont worry, even if there is a shock waiting only part of you will need to move back to the UK [6]

[Pudding]

Private sector pensions krusty were subject to the market, public sector pensions are protected/ring fenced/subsidised.... whatever you like to call it.  My feeling is why should one sector be allowed to decline whilst the other is not - and at the continuing expense of the British taxpayer?

Sniffing the air here seems to indicate a smug silence from recipients of the latter.

And as for low paid public sector workers, really? Some heads in the sand methinks. I worked many years and many hours over and above any public sector worker you care to name, self employed, and  making what I thought was a good provison for my retirement.

 

[Kitty]

What worries me for the future is that so many more public sector jobs were created since 1997.  How are future generations going to pay for those pensions?

[babcock]

I thought that these days one had to pay "the market rate" to get people who were good at the particular jobs? So no lower pay in lieu of a better pension

[woolybanana]

Recent numbers suggest that public sector pay in the middle ranks has moved ahead of the private sector, therefore, no need for special pleading any more. I am not talking about frontline staff who should be rewarded but the phoney jobs in such as the NHS, which should largely be eliminated.

[krusty]

"In April 2010, there is a change to pension legislation which means that the minimum retirement age increases from 50 to 55."

[Scooby]

Well I'll add my twopenn'th worth in here.  My OH has a (very generous) public sector pension.  He'll happily admit he's been paid more than the going rate in the private sector for his job, has a contract that requires him to work 'hours to suit the job'- i.e. frequently leaves early, goes in late and has extended lunches.  He has had six weeks annual leave (plus BH's) for as long as I can remember and will retire at 60 with a pension of £35k+ and a lump sum in excess of six figures.  I work in the private sector having retrained after I had my daughter so I had a more flexible career.  I have studied for more years than my OH, I frequently work in excess of 60 hours a week, have 5 weeks holiday a year and my pension (at the grand old age of 65) is - diddly squat.  Fortunately, I have my OH's generous pension to fall back on but he would happily (and frequently does) admit that I have trained for longer, work harder and earn less qpq than him.  The whole thing about public sector pensions being compensation for low salaries is b*ll**ks and has been for some time.  Technicians in his department with OND / HND are earning substantially more than very good graduate, post grad professionally qualified people with several years experience who work alongside me.  In addition his technicians have guaranteed 'pay spine increments' pretty much regardless of performance - here in the private sector we have no such guarantees and can have a pay freeze or even a cut in salary.  I won't even go into the 'early retirement and enhanced pensions due to ill health issues' that are available in the public sector!!!!! 

As an aside my OH has read the above and agrees with everything I have said but says this is changing.  The changes will force salaries towards those more in keeping with the private sector but these changes are unlikely to extend to pensions because of union pressures. ('Managers' will get more, professionals will get less!)

[woolybanana]

Great Bobo, at last someone has been honest. Thank you Scooby. Stop it now and maybe reclaim a bit through non-indexing.

[chrisb]

Well that's great for your OH Scooby - but let me assure that that experience is NOT typical of workers in local government. Yes there have been plenty of examples of the public sector paying ridiculaous salaries for newly invented top management "to compete with the private sector" but the vast majority of middle and lower ranking staff are paid what would be considered derisory salaries elsewhere.

I joined a frontline service with a nice new professional qualification over 30 years ago at a salary that roughly equated to the then national average wage and having risen to what is considered a senior middle management post within that service I now earn - you guessed it - the National Average Wage. And it has been my choice to stay in that field so I'm not complaining.

BUT why should my pension (to which I have contributed 13% of my salary throughout my working life) suddenly be the object of envy and criticism from those who have consistently had a better deal than me. We've never seen bonuses and above inflation wage increases that have kept others going over the years.

Perhaps the lesson is that you can't generalise about either the private or the public sector. It's certainly better for staff in the education sector than other sections of the public sector - the six weeks holiday for a start!

[Scooby]

OH doesn't work in the education sector.  He's an NHS employee in a clinical department.  Certainly members of my family who work for local government don't have derisory salaries for their qualifications.  They also seem to be able to take an inordinate amount of sick leave (usually what they perceive as their 'annual entitlement'!).  If I have more than two occasions of sick leave in a year I would be interviewed by HR - with the potential of possible disciplinary action!  As an aside my pension contributions have been at the same level as yours, chrisb - over a working career of 32 years to date (with another 18 years to do before I hit the magic age of 65).  That's a 50 year career compared to the ~35 put in by many public sector employees.  (My OH will have completed 37 years when he retires at 60.) So I will have paid significantly more contributions over my working life but my pension will be paid for far fewer years.  If you add the fact that those retiring later tend to live shorter lives it doesn't compare well at all.

[krusty]

It amazes me people talking about staying until retirement age to get their full pension ..........get out early , so it will be reduced , ...how much do you need ?

[Scooby]

I've no intention of staying until retirement age.  I plan to finish in three years time when I will done 35 years (f/t).  I'm not in the best of health and have raised three children so I think I will be ready to take it easier then. However, I won't be able to draw my pension for another 15 years (maybe 18 if the government has its way) so we will be living on my OH's pension.  On current forecasts, even if I get to 65, my pension is worth very little.

As an aside I think one of the biggest discrepancies between public and private sector pensions is that the former are all final salary schemes - these disappeared a long time ago in the private sector.  With the collapse of many company pension funds over recent years the discrepancy has become obscene. The government needs to force the public sector into line with the private.

[Pudding]

Looking at the viewing figures for this topic lots of readers it seems are keeping their heads down.

More ex public sector employees perhaps? 

 

[Clair]

You seem to be angling for a verbal joust and it could be that the silent majority is not interested in arguing...

That does not mean the non-participants are to be seen as guilty of what you consider an injustice.

[Pudding]

Well yes Clair... but this is a forum is it not?

And maybe 'non participants' are not guilty of what myself (and others it must be said) consider an injustice, but a figure of close on to 500 would in part at least suggest otherwise.

Critical debate I'd call it and, in an appropriate arena.

 

 

[andybear]

I've been watching this with some amusement. As a former public servant and having  taken early retirement I feel obliged to make a few points.

Firstly - my money that I paid as National Insurance for 30+ years is now being used to pay for others as the UK government will not make any payment towards my health cover and it's costing us to be a part of the French system.

Secondly - my pension contribution to the local government scheme was 11.6%. Unlike many people in the private sector who had non-contrbutary or pension breaks.

I genuinly feel sorry for people who are in trouble but life is like that - for many years I had to put up with the c**p that the worst end of society thtew at me for not a fantaatic wage and now I am getting the benefit!

[Benjamin]

[quote user="andybear"]

 and now I am getting the benefit!

[/quote]

Which is exactly the point I was making (3rd posting page 1).

This situation isn't the making of the ex-local authority or government pensioners and isn't the making of those currently employed. Whilst the opening poster sounds like a Daily Wail reporter none of these people are to blame; they simply agreed to the terms of their employment.

What does have to be acknowledged is that this situation needs addressing as the provision of these type of pension schemes can no longer be supported by future tax payers. If this means that salaries have to be increased then normal financial conditions must come into play and local and national government must expect to be treated in the same way as public sector workers. Lay offs, short time working to save cash, voluntary or compulsory redundancies and all the other unfair conditions that workers outside the sector are currently enduring.