Subsidising those public sector pensions

[Gastines]

Perhaps some of the vitriolic comments should be directed not at the pension receivers but at the pension investment managers? We do not have the worry of pension funds but we are not without our losses too. Interest  drop on our savings pot has left us virtually £200 a week worse off. In about 6 months I expect we shall have to start digging into our capital as well as digging our own veggies.

Regards.

[Scooby]

[quote user="andybear"]Just to rub salt into the wounds of the poor unfortunats who chose to follow a career in the private sector where they could sit safely behind their desks and never be threatened, shot at, abused or be expected to put their lives on the line for others - I had a letter today informing my pension has increased by2% ! [/quote]

I'm guessing you were a police officer.  The worst example I came across of excessive public sector pensions was the parent of one of my son's school friends.  She was retired from the police force at age 24 because she was diagnosed with asthma and so was unable to do her old job as a constable.  She was given a pension for life of £500 per month even though she immediately retrained as a teacher.  That has to be an unnecessary burden on the tax payer.

[andybear]

Yup, also other things, and did my time. But as I made the point in my first post - the pension contribution for some of us was as much as 11.6% so the idea that we get something for nothing is not quite true. I also know of people who have 'worked the system' but  I also made the point about those people who had many years of non-contributary schemes, not many posts from them.

[ali-cat]

[quote user="Scooby"]Why on earth then should your statement make me feel sorry for public sector employs??? 
[/quote]

I didn't ask you, or anyone to feel sorry for Public Service employees. Why would I? - I certainly don't.  I only pointed out that the example of your husband is anything but typical & therefore hardly relevant.

Instead of blaming Civil Servants for lose of pensions surely the blame would be better aimed at the bosses who raided pension funds or the Government for pouring taxpayers money into bailing our greedy bank bosses.

I've kept most of my past health problems off this forum, but as a member of the “bad back brigade” I would like to point out that I did not want to leave the Civil Service when I did. I was diagnosed with arthritis at the grand old age of 16, worked through treatment for cancer in my 30's, came into work 2 days after finishing treatment for viral meningitis & returned to work the day after having the tendons & ligaments in my hand stitched, happy to type & file one handed – so I can assure you that when I was medically retired it was not at my behest ... & it certainly wasn't the lure of my £1,200 pension either!!

 

[Gluestick]

[quote user="andybear"]Yup, also other things, and did my time. But as I made the point in my first post - the pension contribution for some of us was as much as 11.6% so the idea that we get something for nothing is not quite true. I also know of people who have 'worked the system' but  I also made the point about those people who had many years of non-contributary schemes, not many posts from them.[/quote]

Perhaps we all need to step away from the Private v Public debate and consider the totality?

In the case of the Private Sector, whilst yes, non-contributory schemes became the norm for many: but not all: which is why government tried to introduce the concept of "Stakeholder": which hasn't been very successful in take up. (Mainly since a worker on MW or just above can't actually afford it! Not rocket science really).

Furthermore, non-contributory schemes became the norm: mainly after the Thatcher government reformed state pensions, removed earnings related contributions, per se (and of course, earnings related benefits: but increased NIC!) and introduced the newer form of SERPS: corporate pensions then took advantage of contracted-out tax breaks.

But these reforms took place between 1980 and 1995: and prior to this, many corporate pensions schemes were the older form of contributory or "Super-Annuation" schemes.

And many who started work in the 60s, in the Private Sector, did not have any form of pension; other than state: which was why Labour introduced SERPS in its original form in 1975 (Barbara Castle).

Additionally, employers used the non-contrib pension as a methodology of refraining from significant and repetitive salary rises, since they were tax efficient.

And as we know, many companies raided pension funds with the assistance of a tame actuary: took a draw out, paid the Corporation Tax and then declared a Pension Holiday! Hanson used this ploy much when he asset stripped take over targets: as did many others.

Many established companies carried out devious tricks: like the well publicised raid on the old BOAC and BEA  contributory funds!

Now despite Norman Fowler (Secretary of State for Social Services, 1983) promising to "Ring Fence" corporate pensions away from the depredations of greedy executives, this never happened: furthermore and perhaps worse, various figures in business stated that "As employees have not paid for these pensions the money pot is ours; not theirs!"

Since that time, of course, we have seen many corporate pensions crash and burn as the companies have gone into liquidation: and many of these were contributory too.

Public Sector pensions enjoy the government as their Funds Managers!

What could be worse!

So sadly, I fear, as you public sector pensioners may well discover in the not too distant future, your "Funds Managers" have "Done a bit of a Maxwell"!

And as corporate funds are shrinking (and thus reducing their ability to meet expected payout), so are Public Non-Funded pensions as well.

Thus both Public and Private sector are in very much the same boat.

I'm sure we all know or know off people in both sectors who retired with "A fabulous pension and lump sum": those days are now well and truly over.

 

[Thibault]

Of course, we should not forget that MPs' generous pension arrangements are part of the public sector pension system.  An interesting side effect of replacing MPs' second home allowance with an increased salary (which has been mentioned a few times) is that their pension pots will increase as a result.

 

 

[Dog]

To get back to the point of this thread...

We shouldn't forget that the UK is in denial about its Madoff style pyramid scheme that holds up generous public sector pensions with unsustainable immigration and decreasing manufacturing.

Something must be done to ameliorate the system and change it fundamentally before it collapses.

[Gluestick]

I fear it already has collapsed!

The question now is how to pick up the pieces and glue them back together again: and who is capable of doing this?

George Osborne and Call Me Dave?

Err....no.

Plus ca change.......................

[just john]

Surely Gluey, even Jean-Baptiste would not be happy to continue going to hell in bucket with this lot, "je veux bien que messieurs les assassins commencent"
Brown should go, though I think he has plenty more rope to  . . . .  himself,
what a poison chalice for he who dares[8-|]

[Gluestick]

Well my own view, for what it's worth, John, is that Britain is in a similar situation to WWII: when party politics were suspended for the duration and the state run by a coalition.

Also worth remembering that West Germany as it was, achieved its best economic and social stability through coalition governments for man, many years.

Britain has to shelf all the idiotic party political ideology and focus on sorting out firstly the economy and second society.

NuLab are still trying to plough ahead with insane policies developed on the back of silly idealogy: and wasting billions of essential government funds in so doing.

I have always believed there is little difference between a personal budget: a small business budget: a mega-business budget: and a state budget. Only a matter of scale.

When times is hard what does a major company do?

Cuts wasteful spending: cuts headcount: creates performance improvement at all levels.

When (Not if!) the IMF Inspectors with their big boots come marching in, the first thing they will do is insist on Government massively scaling back its profligate spending.

Apparently, UK is still giving foreign aid to: China and India! Amongst others.

Total insanity!

Charity begins at home.

 

[PaulT]

Well Scooby if your OH has hours to suit and he goes in late, home early extended lunches etc then he is ‘lucky’. I work in the public sector and my contract is for a minimum of 37.5 hours but working for whatever the job takes with no extra pay. Today is Sunday, I am sitting at my desk and have taken a few minutes out to look at the forum.

As for pay spines, within the NHS this was brought in via Agenda for Change and people have to go through two points whereby if their performance is not good enough they will not move up the scale.

As for early retirement – yes, I have been able to take that since I was 50. However, there are reductions for this and, I will have my 40 years in just before I am 60 but cannot afford to retire early on the reduced amount.

I am writing this as I read the comments. I note your husband works for the NHS. Well, his trust seems very lax on sickness. In my trust it is much stricter and after just a few periods of sickness then the person is interviewed and the matter is taken extremely seriously.

And just to reinforce, a full NHS pension is after 40 years service – admittedly there are different rules for doctors etc and those working in mental health.

The moan about final salary schemes. They have been the conditions when I started in the NHS at 19. What would the reaction be if private pensions had done really well. Would you now be saying ‘it is unfair on those with final salary schemes because those on private non-final salary schemes are getting far more’.

The public sector pensions are not paid without both employee and employer making contributions. I.E. it is not like some private pension schemes non-contributory by the employee. Plus, we are not given a company vehicle, petrol expense account etc.

Benjamin – do not run away with the notion that it is a job for life. Within my career it has been a case of re-organisation and applying for jobs – those who are not successful are out of the door.

Scooby also states that people cannot be fired in the public sector because they cannot do their job – that is a myth, colleagues of mine have been fired for that reason.

As for public sector pensions not being funded, the government has had my contributions as well as my employers. If they decide to use it for something else then at the end of the day they need to make good. If they have used it as a loan then as with all loans they have to be paid back.

As for changes in the public sector pay arrangements, the NHS scheme has recently changed so that normal retirement age for entrants after a certain date will be 65.

And Scooby – ill-health retirement, difficult to get in my trust. And as stated above sickness periods are taken very seriously. On a personal point, I went off with stress, due to a manager (he is one who has been outed due to incompetence) and had three weeks off. Prior to that my last sickness had been 1975 and nothing since 2000.

Plus the private sector has some amazing deals, admittedly they might not be a large number but, screw up a bank and walk away with a huge pension at 50.

In case it upsets anyone, when I retire it will be on half my final salary with a lump sum of 1.5 times the final salary with the pension index-linked. That has been part and parcel of the conditions under which I have worked.

Paul

[krusty]

Whoopee doo  the pension cost of living increases come through this month , 5% on the NHS one , 3% on the company one.

Don't cover the exchange rate loses , but mustn`t grumble .[Www]