Public sector pensions eat the UK

[spygirl]

Mentioned several times here, on different threads.

Worthy of of it's own thread as tge liabilities are massive.

https://www.thisismoney.co.uk/money/markets/article-11152005/amp/Taxpayers-6bn-pension-bombshell-public-sector-retirement-bill.html

Gold-plated pensions handed out to MPs, civil servants and other public sector workers will cost the taxpayer an extra £6billion this year alone due to rampant inflation, experts warned last night. 

This will add to the huge annual bill for retired state employees, which already stands at £60billion – one-third more than the entire defence budget. 

...

Taxpayers are on the hook for a colossal £2.6trillion to pay for existing inflation-proofed pensions for public sector workers now and over decades to come. The vast pension liability is not included in official Treasury borrowing forecasts, but it is greater than the entire output of the economy and, if included, would more than double the national debt of £2.4trillion. 

Pensions expert John Ralfe said: 'This is off-balance sheet financing that makes Enron, the collapsed US energy group, look like amateurism.' 

Public sector schemes protect against inflation, no matter how high prices rise or how great the cost to UK taxpayers. With inflation running at more than 10 per cent, this is an extremely valuable benefit for recipients. Ralfe added: 'The annual cost to the taxpayer is increasing and the gulf between the public and private sector pensions is widening. 

'The problem is policymakers have no skin in the game. It doesn't matter to MPs or civil servants if inflation is 2 per cent or 10 per cent. Their pensions are automatically increased by the full rate.' The security enjoyed by retired public employees is in stark contrast with those forced to rely on a private sector pension for their old age. At best, company plans give only limited protection against inflation, leaving pensioners vulnerable to increases in the cost of living. 

 

[King Penda]

Oh dear

[Guest]

UK governments cocked up badly by not putting all public sector workers onto funded pensions. Some other countries did a better job of it e.g. Ontario Teachers is one of the biggest institutional investors in the world.

[Spiney Norman]

Its fucked up, thats for sure.

When I try to explain the size of the problem to the people who are or will be  in reciept of these pensions (my Mrs is one) their eyes glaze over, and they turn into Zombies. Absolute denial about the size of the problem, absolute denial about ever changing the system, absolute denial about the unfairness to private sector workers pensions.

the good news however, is that change is now inevitable or the economy collapses.

[spygirl]

57 minutes ago, Spiney Norman said:

Its fucked up, thats for sure.

When I try to explain the size of the problem to the people who are or will be  in reciept of these pensions (my Mrs is one) their eyes glaze over, and they turn into Zombies. Absolute denial about the size of the problem, absolute denial about ever changing the system, absolute denial about the unfairness to private sector workers pensions.

the good news however, is that change is now inevitable or the economy collapses.

To fund the typical public sector pension is about 40% of salary.

They are still doing 10% employee 10% employer.

Gor Rome firemen, police women, it's over 100% salary.

Public sector women cost another 30% more than blokes - the extra 5 years is massive.

If ukgov had any sense theyd push to replace wimmin with men in public sector.

[humdrum]

I was a civil servant.

I can't say that my pension is all that great, but it has to be said that I didn't do much to earn it either.

I guess we should meet in the middle. I will feel guilty, but not much

[sarahbell]

3 hours ago, Darude said:

UK governments cocked up badly by not putting all public sector workers onto funded pensions. Some other countries did a better job of it e.g. Ontario Teachers is one of the biggest institutional investors in the world.

Was it Ontario Teachers pension who owned the UK lottery?

40 minutes ago, humdrum said:

I was a civil servant.

I can't say that my pension is all that great, but it has to be said that I didn't do much to earn it either.

I guess we should meet in the middle. I will feel guilty, but not much

How much of it did you pay in?

[Formerly]

41 minutes ago, humdrum said:

I was a civil servant.

I can't say that my pension is all that great...

Yet it'll be better than that offered to 99% of private sector workers.

[One percent]

4 hours ago, spygirl said:

Mentioned several times here, on different threads.

Worthy of of it's own thread as tge liabilities are massive.

https://www.thisismoney.co.uk/money/markets/article-11152005/amp/Taxpayers-6bn-pension-bombshell-public-sector-retirement-bill.html

Gold-plated pensions handed out to MPs, civil servants and other public sector workers will cost the taxpayer an extra £6billion this year alone due to rampant inflation, experts warned last night. 

This will add to the huge annual bill for retired state employees, which already stands at £60billion – one-third more than the entire defence budget. 

...

Taxpayers are on the hook for a colossal £2.6trillion to pay for existing inflation-proofed pensions for public sector workers now and over decades to come. The vast pension liability is not included in official Treasury borrowing forecasts, but it is greater than the entire output of the economy and, if included, would more than double the national debt of £2.4trillion. 

Pensions expert John Ralfe said: 'This is off-balance sheet financing that makes Enron, the collapsed US energy group, look like amateurism.' 

Public sector schemes protect against inflation, no matter how high prices rise or how great the cost to UK taxpayers. With inflation running at more than 10 per cent, this is an extremely valuable benefit for recipients. Ralfe added: 'The annual cost to the taxpayer is increasing and the gulf between the public and private sector pensions is widening. 

'The problem is policymakers have no skin in the game. It doesn't matter to MPs or civil servants if inflation is 2 per cent or 10 per cent. Their pensions are automatically increased by the full rate.' The security enjoyed by retired public employees is in stark contrast with those forced to rely on a private sector pension for their old age. At best, company plans give only limited protection against inflation, leaving pensioners vulnerable to increases in the cost of living. 

 

Some are gold plated, others not so much.  

[humdrum]

44 minutes ago, sarahbell said:

Was it Ontario Teachers pension who owned the UK lottery?

How much of it did you pay in?

All of it.

The pension was part of the wages.

Towards the end the government finally twigged that civil servants weren't dying off as fast as before. When I first joined the Civil Service ran on goodwill, fags and alcohol, but the management suddenly got overcome by attacks of delirium tremens of virtue and we ended up being able to see across the office and awash with Perrier's Water. Sad stuff, but the result is that me and a lot of my mates are still here and Uncle will have to pay our pensions forever and ever  

[humdrum]

47 minutes ago, Formerly said:

Yet it'll be better than that offered to 99% of private sector workers.

Yippee !

I am part of the top 1% !

I will still talk to you guys, but don't get ideas above you station right ?

[Formerly]

44 minutes ago, humdrum said:

Yippee !

I am part of the top 1% !

I will still talk to you guys, but don't get ideas above you station right ?

Still got the public servant manner then?

Seriously, my point was that a lot of the private sector now have to make do with employer contributions of <3% of their earnings (or as hmrc prefer to say, 3% of qualifying earnings) and 5% paid by the employee unless thy opt out. There's no defined benefit, no guarantee, and the likelihood is that it will be deducted from what will be a means tested state benefit if they get to retirement.

Agreed, you're only getting paid what your contract stated. It's a shame that the majority of the private sector, who pay all public sector pensions by one means or another, have had to cut their cloth to pay them.

 

[humdrum]

3 minutes ago, Formerly said:

Still got the public servant manner then?

Seriously, my point was that a lot of the private sector now have to make do with employer contributions of <3% of their earnings (or as hmrc prefer to say, 3% of qualifying earnings) and 5% paid by the employee unless thy opt out. There's no defined benefit, no guarantee, and the likelihood is that it will be deducted from what will be a means tested state benefit if they get to retirement.

Agreed, you're only getting paid what your contract stated. It's a shame that the majority of the private sector, who pay all public sector pensions by one means or another, have had to cut their cloth to pay them.

 

Alright, I take it back.

I will talk to all of you except Formerly, who seems to enjoy being glum.

[One percent]

23 minutes ago, Formerly said:

Still got the public servant manner then?

Seriously, my point was that a lot of the private sector now have to make do with employer contributions of <3% of their earnings (or as hmrc prefer to say, 3% of qualifying earnings) and 5% paid by the employee unless thy opt out. There's no defined benefit, no guarantee, and the likelihood is that it will be deducted from what will be a means tested state benefit if they get to retirement.

Agreed, you're only getting paid what your contract stated. It's a shame that the majority of the private sector, who pay all public sector pensions by one means or another, have had to cut their cloth to pay them.

 

Private sector pensions used to be final salary. They were very good. I guess being largely non-unionised, it was relatively easy for cuntish employers to roll them back. 

[humdrum]

33 minutes ago, One percent said:

Private sector pensions used to be final salary. They were very good. I guess being largely non-unionised, it was relatively easy for cuntish employers to roll them back. 

And easy to run off with the cash.

I have said some hard words to Uncle, but at least the pension was there when I retired.

[Formerly]

1 hour ago, One percent said:

Private sector pensions used to be final salary. They were very good. I guess being largely non-unionised, it was relatively easy for cuntish employers to roll them back. 

I have a few years worth of a DB deferred one. First they moved back the pension age - how is that legal? Then they reduced the accrual rate from 40ths to 60ths i.e. one year of contributions gets you 1/60th of your final salary. At the same time they changed it from RPI to CPI linking capped at 2.5%. Then they closed it to new entrants. Despite all of these cuts it's still miles better than anything I've been offered in the 18 years since leaving that company.

[One percent]

9 minutes ago, Formerly said:

I have a few years worth of a DB deferred one. First they moved back the pension age - how is that legal? Then they reduced the accrual rate from 40ths to 60ths i.e. one year of contributions gets you 1/60th of your final salary. At the same time they changed it from RPI to CPI linking capped at 2.5%. Then they closed it to new entrants. Despite all of these cuts it's still miles better than anything I've been offered in the 18 years since leaving that company.

I don’t see how the goalposts can be moved on what you have already paid. It is a contractual arrangement. Seems though that employers can do what the fuck they like. And government wonder why everyone who possibly can is escaping from work. Cunts. 

[Formerly]

The accrual changes were to new contributions, so complete previous years were still 40ths. The retirement age was a big one. I guess all that was contracted was that I'd receive my pension at retirement age. I still will. It's just that they've decided on a new retirement age.

[Uncle Buck Rogers]

2 hours ago, humdrum said:

And easy to run off with the cash.

I have said some hard words to Uncle, but at least the pension was there when I retired.

Sorry, i wasn't paying attention at the time.

[Funn3r]

1 hour ago, Formerly said:

The accrual changes were to new contributions, so complete previous years were still 40ths. The retirement age was a big one. I guess all that was contracted was that I'd receive my pension at retirement age. I still will. It's just that they've decided on a new retirement age.

Ours was same, the change was that new contributions were under a different deal due at a later retirement age 65 instead of 60. 

If you did the maths it wasn't too bad because the existing part you were due at 60 increased by 1%/month (12%/year) for the 5 years between 60 and 65. Called it delayed retirement factor or something like that. So by 65 years and 8 months or so you would get the pension you would have got at 65 anyway.

However, after the change was made, in a separate exercise, the delayed retirement factor was reduced to 5%/year...

[humdrum]

59 minutes ago, Uncle Buck Rogers said:

Sorry, i wasn't paying attention at the time.

Never explain a joke, particularly when it is as half arsed as mine. But I was in HMRC and the management was referred to as Uncle.  Hard to believe, but not a bad bunch

[DurhamBorn]

10 hours ago, spygirl said:

To fund the typical public sector pension is about 40% of salary.

They are still doing 10% employee 10% employer.

Gor Rome firemen, police women, it's over 100% salary.

Public sector women cost another 30% more than blokes - the extra 5 years is massive.

If ukgov had any sense theyd push to replace wimmin with men in public sector.

I reckon its round 65% on top of salary.That and bennies are why we are where we are in the UK.They are the two most destructive forces.The blame lies with the polos,but the public sector are more like a mafia now,they do what they want,like at the moment most of local government management is all at home doing next to nothing refusing to go back to work.

[Stuey]

The spousal inheritance benefits add another layer on top too. 

[spygirl]

16 hours ago, humdrum said:

All of it.

The pension was part of the wages.

Towards the end the government finally twigged that civil servants weren't dying off as fast as before. When I first joined the Civil Service ran on goodwill, fags and alcohol, but the management suddenly got overcome by attacks of delirium tremens of virtue and we ended up being able to see across the office and awash with Perrier's Water. Sad stuff, but the result is that me and a lot of my mates are still here and Uncle will have to pay our pensions forever and ever  

No, wages are paid when the bill falls - monthly.

The issue with public sector pensions is that the public sector carried on blindly for 20 years after the cost became apparent to the private sector.

The problem with the public sector - inc the CS- is they are pitched, mainyl by the unions, as these hard working, highly  trained crack troops.

They are not.

For almost 30y as part of the costing of public services, the CS/providers have gone down the road to prove that the public sector is more cost efficient than the private sector.

It just isnt, and thats with give in the public sector the advantages  it as - ability to have roughly cost free access to money (tax).

Just accounting for the sick rate in the public sector (@10d /y more than the private sector) blows the costing out.

Chuck in the true pension cost - 40% - and about 50% of the public sector - all the pointless paper based clerks and layers of control are blown away.

 

 

 

 

[spygirl]

2 hours ago, Stuey said:

The spousal inheritance benefits add another layer on top too. 

Id expect the spouse add on to go, or be severely restricted.