Civil/Public Servants Pension Contributions Reduced?!

ixoy

I noticed this bit at the end of the budget announcement:

Pension Related Deduction for Public Servants

Changes to ameliorate impact of deduction on lower paid public servants, partly offset by increase on higher earnings, this will cost €100 million in 2009 and €150 million in a full year.

Existing arrangement

* first €15,000 of earnings – 3%,
* €15,000 to €20,000 of earnings – 6%,
* earnings over €20,000 – 10%.



New arrangement

* first €15,000 of earnings exempt,
* 5% on next €5,000 of earnings,
* 10% on earnings between €20,000 and €60,000 and
* 10.5% on earnings above €60,000.

Am I reading this right - are the pension deductions being reduced and thus the public sector pay bill increased?!

jim o doom

yeah that seems to be the gist of it - in an effort to reduce the financial burden on lower paid civil servants like myself (only on 25k), who like all people who still have jobs, will also be facing the new taxes and levies on top of the pension levy..

most likely throwing a bone to the CPSU (representing the lower paid) who were first out on strike and have been doing various bits and pieces of industrial action constantly since it came in and were showing no sign of abating unless the government did something for them..

an increase of 100m is a drop in the pond compare to what they have to save, in fairness..

Riskymove

yes they have exempted anyone under €15k from it,

but higher paid will pay slightly more than before

overall means a slight reduction in what they would bring in in a year

jimmmy

ixoy wrote: »

Am I reading this right - are the pension deductions being reduced and thus the public sector pay bill increased?!

yes. No wonder we are the basket case of Europe, with the highest cost of borrowing, when we have such a public sector gravy train

ixoy

Riskymove wrote: »

overall means a slight reduction in what they would bring in in a year

From their own figures, I'd hardly call 150m a year a "slight reduction". That's the cervical cancer vaccine right there for example. That's 50e out of my pocket.

Riskymove

ixoy wrote: »

From their own figures, I'd hardly call 150m a year a "slight reduction". That's the cervical cancer vaccine right there for example. That's 50e out of my pocket.

yes I thought someone might say that!!

but when you take into account the other budget changes that €150m is more than made up for!

from day 1 I thought it would be very hard for them to get away with not exempting the lowest paid people from the levy

Riskymove

jimmmy wrote: »

yes. No wonder we are the basket case of Europe, with the highest cost of borrowing, when we have such a public sector gravy train

lol....the levy is actually being increased for higher earners (including politicians)...not much of a gravy train

ixoy

Riskymove wrote: »

lol....the levy is actually being increased for higher earners (including politicians)...not much of a gravy train

Eh only by .5% - not much of an increase.

Did some quick sums there -
Pre-Budget a civil servant on 35k would appear to have been paying 2250 on their pension (based on the figures above).

Post-budget the same cost is now 1750 - a 500e reduction.

Now they're paying about 1050 more in other income levies and health levies but the effective hit is only 550.

Whereas a private sector employee would instead get just the 1050 (or almost double the loss).

While I appreciate that the pension levy was poorly implemented (and have said as much elsewhere), this hardly seems the right approach - why didn't they adjust the levy and ensure that they saved the same amount instead of 150m less - we can ill afford to throw away 150m more. C'mon we're all in this together!

Riskymove

ixoy wrote: »

Now they're paying about 1050 more in other income levies and health levies but the effective hit is only 550.

but the pension levy is also being paid so therefore over the last two months they will have lost 2900 by your calculations

plus if you choose someone on say 70k then there is no decrease, rather an increase as well as the latest levies

NewDubliner

Riskymove wrote: »

but the pension levy is also being paid so therefore over the last two months they will have lost 2900 by your calculations

plus if you choose someone on say 70k then there is no decrease, rather an increase as well as the latest levies

For someone on 70k, the difference between them and an early retiree on half pay, allowing for levies and taxes is about 300/week.

The Muppet

ixoy wrote: »

From their own figures, I'd hardly call 150m a year a "slight reduction". That's the cervical cancer vaccine right there for example. That's 50e out of my pocket.

I though the pension levy was to to be used to fund public service pensions , what has it got to do with funding cancer vaccinations ? Unless you are a public servant you dont pay the levy which is equal to nothing out of your pocket.

BroomBurner

ixoy wrote: »

While I appreciate that the pension levy was poorly implemented (and have said as much elsewhere), this hardly seems the right approach - why didn't they adjust the levy and ensure that they saved the same amount instead of 150m less - we can ill afford to throw away 150m more. C'mon we're all in this together!

How do you want them to do that?

The Muppet

ixoy wrote: »

Eh only by .5% - not much of an increase.

Did some quick sums there -
Pre-Budget a civil servant on 35k would appear to have been paying 2250 on their pension (based on the figures above).

Post-budget the same cost is now 1750 - a 500e reduction.

Now they're paying about 1050 more in other income levies and health levies but the effective hit is only 550.

Whereas a private sector employee would instead get just the 1050 (or almost double the loss).

While I appreciate that the pension levy was poorly implemented (and have said as much elsewhere), this hardly seems the right approach - why didn't they adjust the levy and ensure that they saved the same amount instead of 150m less - we can ill afford to throw away 150m more. C'mon we're all in this together!

By your own figures (which I think may be wrong, 35 k ps worker pension levy pre todays budget was nearer 3k) the last two budgets have cut a public service worker on 35 k by appox €2800 compared to €1050 cut for a private sector on the same salary and you claim the private sector worker is getting the raw end of that deal? The mind boggles. Obviously we are not all in this together.

ellips

I'm delighted the pension levy is down a small bit - my other half is in a temp contract in a university and has paid the same prsi rate as me, same pension contrib as I do in private employment, has not had a payrise together with the PPF increases - in short he has never been recognized as a public servant in the benefits end of it. But getting whacked with pension levy full on as he suddenly now qualifies as a public servant for this. Worth mentioning that it may be possible that the employer contribution of his pension is being charged back to the funding agency in charge of his contract so there is no state cost involved whatsoever. What a freakin disaster of a system....

tippspur

Some of ye are talking shyte lads,i'm a public sector worker and between the pension levy and now the doubling of the tax levy i am down 120euro take home pay per week.now thats a hard hit in anyones book,and no one in the private sector has taken a hit like that,i am fcuking raging over this,woulden't ye..:mad::mad::mad:

ixoy

The Muppet wrote: »

I though the pension levy was to to be used to fund public service pensions , what has it got to do with funding cancer vaccinations ? Unless you are a public servant you dont pay the levy which is equal to nothing out of your pocket.

No my point is that undoing some of this now leaves us with 150m more to pay to the coffers which could have instead been spent on reducing the debt or on other programs (I picked the cervical cancer one as it's emotive - bit cheap of me!)

BroomBurner wrote: »

How do you want them to do that?

Well I'd imagine that they could have upped the pension contributions at the higher end a bit more than the .5% extra? Actually I'd have left the contributions alone and instead focused on the levy. I'd imagine you could reduce the amount at the lower levels (for a CO) and increase more significantly at the higher levels (AP+) and recoup closer to the same amount. I think we both agree the disparity between top and bottom is too small.

The Muppet wrote: »

By your own figures (which I think may be wrong, 35 k ps worker pension levy pre todays budget was nearer 3k) the last two budgets have cut a public service worker on 35 k by appox €2800 compared to €1050 cut for a private sector on the same salary and you claim the private sector worker is getting the raw end of that deal? The mind boggles. Obviously we are not all in this together.

The levy wasn't part of the budget though was it? It was a separate thing, rushed through (in a half-arsed manner). I'm simply making the point that the hit today was less for the public/civil sector worker than the private sector and, ultimately due to the 150m hole there now, it's worse for all of us.
I believe we could have made some reprieves without going down 150m.

tippspur wrote: »

no one in the private sector has taken a hit like that,i am fcuking raging over this,woulden't ye..:mad::mad::mad:

Must've imagined the increases in unemployment then and posters here talking about their wage cuts and reduced hours...

dave80

ixoy wrote: »

I'm simply making the point that the hit today was less for the public/civil sector worker than the private sector

but if you take into account the hit the public sector took in feb when the pension levy came there worse off than private sector

podgeandrodge

As a public servant I had no major problem with paying more. But everyone seems to point to the "private sector job layoffs" or the "private sector wage cuts" - the only fair way to hit people, be they public or private, is to tax them according to what they earn. Hence the people laid off will pay nothing and the people with wage cuts will pay less. That's fair. So the public servant on e.g. €40k will pay the same tax as the private sector worker that earns €40k.

(in relation to the pension levy, bear in mind that while public servants may get a guaranteed pension of half salary (less than some private sector workers) this is a long way into the future. Right now they are being hit with the levy AND the other tax increases the private sector is getting.

And remember also, that the so called "over paid" etc etc public servants hit by the pension levy will have to cut back on spending - and that will hit no-one else other than....the private sector.

Welease

podgeandrodge wrote: »

As a public servant I had no major problem with paying more. But everyone seems to point to the "private sector job layoffs" or the "private sector wage cuts" - the only fair way to hit people, be they public or private, is to tax them according to what they earn. Hence the people laid off will pay nothing and the people with wage cuts will pay less. That's fair. So the public servant on e.g. €40k will pay the same tax as the private sector worker that earns €40k..

Noone would disagree with that, assuming we are talking about pay including benefits.. Now if public sector get given a pension that the private sector could not and would not pay it's people, then why should the private sector be asked to bear the cost of your inflated pension.. Have a look around the private sector and find how many companies offer guaranteed half-salary pension. When you find none, then ask yourself why you think it's reasonable that I should fund your inflated pension.

podgeandrodge wrote: »

(in relation to the pension levy, bear in mind that while public servants may get a guaranteed pension of half salary (less than some private sector workers) this is a long way into the future. Right now they are being hit with the levy AND the other tax increases the private sector is getting. .

lol some private sector workers?.. yes, a handful, but the vast majority don't get your pension benefits.. at least be honest about it. And so what if it's in the future? It's a benefit that you get.. if I want my pension to equal half my salary for life, then I would have to pay a hell of a lot more than the current levy to match that amount and it still wouldn't be guaranteed. Why should you again assume that you have an entitlement to that type of benefit that the wealth generating portion of this country doesn't get?

podgeandrodge wrote: »

And remember also, that the so called "over paid" etc etc public servants hit by the pension levy will have to cut back on spending - and that will hit no-one else other than....the private sector

I'm sorry but that's a terribly weak arguement... Why don't we pay public servants more so they can increase spending and drag us out of this recession?


The problem in essence is, if you want to balance the books for Ireland PLC.. then we need to look at models of how successful business's are run, and understand that if the private sector can't afford to have certain benefits, then there is no way that the public sector can afford to (or should) have them. Anything short of that, is just wasting tax payers money.

bug

In the last two months I've had a few hundred taken off me. Being realatively new to the "permanent" public sector I asked a few questions about this whole pension thing. I had been on contract before hand and like another poster said with none of the benefits but all of the red tape.

Aparently I can't take this pension with me if I leave to work in the private sector... ****.
I dont know how true this is, whether that relates my to contributons or whatever but i'll find out and report back.

My point is, public sector reform which I've stated on these forums time and time again is and was always badly needed, (it was needed five years ago or more) Will enevitably lead to lay offs. The fat cats at the top will get out now with the 50 years old early redunancy thing, but what of the rest of us non fat cat normal, non institutionalised lot?

A point to make is that those of us on the lower region wage being hit with these levvies etc probably wont even benefit in the long term from all the so called perks of the public service. We wont be there. When it comes to litagation and unfair dismissal the PS will always win if they want rid of you unless you have a good few hundred thousand to fight them in the bank and are just doing it as an aside whilst sipping... port at home at night in your smoking jacket planning tommorrows golfing outing.

They are making cuts already in staff i can tell you that.

Whatever crappy service you were getting before I can see it dwindling into a disheartened mess of a go-slow. Those who took on all responsibility for those that did nothing will be reviewing their personal situations.

Give me a A4 pad and a pen and i'll reform my little corner of the public service in a month. No consultants needed.

So FF you should have reformed the public service when times were good and people had alternatives.

Dont be calling us greedy or wasteful, we weren't running the country. We entrusted it to you, we assumed you at least had half an idea of what you were doing economically.
Either way this great divide between people and politicians in this country will be narrowed greatly over the next year. Its the only good thing that might come out of this great mess.

I hope they go down in flames.

Coup anyone?

ellips

Bug, in your investigation can you find out about the interesting points no 17 and 18 in the document below:

http://www.finance.gov.ie/documents/publications/other/2009/faqlevy4mar09.pdf

Do I read this right that were a contracted "public servant" to leave the position before 2 years they will get a refund of the pension levy paid but must pay it back with interest once they return to the public service at a later time in their career. WTF?????

BroomBurner

Ioxy, I agree that they should have raised the higher end of the contribution, but sure why would they punish themselves?

Bug, I also agree with the need for reform. I think you can get your money back from the standard payments in to the pension (I previously worked on contract in the public sector and when I left, I got a refund of my pension contributions), however, nobody knows if the pension levy itself will be refundable. If it's not, then I can only foresee legal action being taken in the future over it.

At the moment, there is a sense of prevailing fear though in the public sector which really annoys me. There is oppression from the top in places whereby you can't "rub people up the wrong way" so to speak without it coming back on you in a negative way. And by "rubbing people up the wrong way", I mean pointing out that they're wasting tax-payers money. It's because of this, I think, that nothing changes. There is that fear that if you say the wrong thing, you could end up decentralised or never considered for promotion. Hence, people won't open their mouth.

Alcatel

Aparently I can't take this pension with me if I leave to work in the private sector... ****.

The public sector is a good job for life.

In relation to them letting people go, that's people on contract. Tough, contractors all became dole scroungers (and quite a few worse off, thanks to the rules qualifying you for dole if you're self employed) quite a few months back in the private sector.

If you're permanent, you're job is safe. This public sector argument about people on contract being let go all the time doesn't wash with me, people on contract are on contract, and a contract can end at any time. I've met highly qualified, highly valuable contractors in, for example, IT who haven't had work since last year.

Giving 100m euro back to the public sector is a bad PR move. It should have been made up in other cuts elsewhere; even if they cut the stationary budget they likely could have made that much out of our very efficient public sector.

I don't disagree that lower paid PS workers should have got a break from the pension levy, but I do think that it should have been a debt neutral equation, paid for from somewhere else within the PS. As it is, in the private sector they cut your pay and your budget!

jimmmy

tippspur wrote: »

Some of ye are talking shyte lads,i'm a public sector worker and between the pension levy and now the doubling of the tax levy i am down 120euro take home pay per week.

Many a private sector worker, highly qualified and working longer hours than the average public sector worker, would love to be on a high enough secure salary where the percentage points you mention add up to 120 a week. You are obviously well overpaid.

stevoman

tippspur wrote: »

Some of ye are talking shyte lads,i'm a public sector worker and between the pension levy and now the doubling of the tax levy i am down 120euro take home pay per week.now thats a hard hit in anyones book,and no one in the private sector has taken a hit like that,i am fcuking raging over this,woulden't ye..:mad::mad::mad:

I agree. first i get hit with the 1% levy.. fair enough.

then a 4% pension levy.

now the income levy has doubled to 2% and i have an increase of 3% on PRSI.

On a salary of 30,000 a year thats a 9% paycut since december.

so not all public servants are on this famous gravy train. Im not anywhere near the bloody train tracks to be honest.

manc

stevoman wrote: »

I agree. first i get hit with the 1% levy.. fair enough.

then a 4% pension levy.

now the income levy has doubled to 2% and i have an increase of 3% on PRSI.

On a salary of 30,000 a year thats a 9% paycut since december.

so not all public servants are on this famous gravy train. Im not anywhere near the bloody train tracks to be honest.

Compared to me in the private sector your still well ahead.....

Salary cuts since december
2% income levy
2% PRSI increase
10% paycut

also let 10% of staff go and the rest of us could be gone by 3rd qtr.

from a pension side which always goes in 12% of salary, got my pension statement yesterday and after 12 years it is down nearly 50% up to last November.

I now have less in the pension than the actual amount I paid into it, how much has your pension dropped by...thats right 0% as it s guaranteed. And your pension levy is not a PAYCUT you get it back when you retire.


so my 26% trumps your 9%

stevoman

manc wrote: »

I now have less in the pension than the actual amount I paid into it, how much has your pension dropped by...thats right 0% as it s guaranteed. And your pension levy is not a PAYCUT you get it back when you retire.


so my 26% trumps your 9%

your 26% certyainly does trump my 9% but nonetheless as a lower paid public servant i have to say that i still oppose the pension levy.

the pension levy is still a paycut no matter what way i look at it though as the money is going straight back into the exchequer and not to any pension fund.

manc

stevoman wrote: »

the pension levy is still a paycut no matter what way i look at it though as the money is going straight back into the exchequer and not to any pension fund.

But the exchequer pays your pension, so it is going into a pension fund.

Welease

stevoman wrote: »

your 26% certyainly does trump my 9% but nonetheless as a lower paid public servant i have to say that i still oppose the pension levy.

the pension levy is still a paycut no matter what way i look at it though as the money is going straight back into the exchequer and not to any pension fund.

So would your support scrapping of the Levy AND the guaranteed 50% pension and paying the same % as private sector workers with a non guaranteed pension.. in essence levelling the playing field?

Or is it a case that you want to continue to have the unsustainable benefits of that pension but everyone else in the private sector should pay for it instead of you, while their pensions go down the swanny?

Cos honestly, thats what it sounds like to those of us who work in the private sector where bloated staffing levels, rediculous pension etc. would lead to being made unemployed if we implemented them.

pazza

stevoman wrote: »

your 26% certyainly does trump my 9% but nonetheless as a lower paid public servant i have to say that i still oppose the pension levy.

the pension levy is still a paycut no matter what way i look at it though as the money is going straight back into the exchequer and not to any pension fund.

The pension levy is not a pay cut, if you get 35K - you are now not getting a salary of 33K (or so) with a 4% decrease, you are being charged for the pension that you will receive at some time in the future. So you are paying for something you will get - not a pay cut. The message from the government is all wrong on this, Willie O'Dea on Q&A the other night (or was it Prime Time) was saying the same - the levy was a pay-cut, so with this message from on high, no wonder this is represented all wrong.

I like lots of other pay my own pension contributions - and have seen the value of my fund being decimated - I would gladly pay 4% (and a lot more) for the pension benefits the public sector gets, and wouldn't be treatening strikes that are driving a wedge between private and public sector workers.

stevoman

manc wrote: »

But the exchequer pays your pension, so it is going into a pension fund.

not it doesnt. im sure any informed person on either side of the arguement will agree with that.

pazza wrote: »

The pension levy is not a pay cut, if you get 35K - you are now not getting a salary of 33K (or so) with a 4% decrease, you are being charged for the pension that you will receive at some time in the future. So you are paying for something you will get - not a pay cut. The message from the government is all wrong on this, Willie O'Dea on Q&A the other night (or was it Prime Time) was saying the same - the levy was a pay-cut, so with this message from on high, no wonder this is represented all wrong.

I like lots of other pay my own pension contributions - and have seen the value of my fund being decimated - I would gladly pay 4% (and a lot more) for the pension benefits the public sector gets, and wouldn't be treatening strikes that are driving a wedge between private and public sector workers.

yes i agree with the wedge being driven and the goverment let the media have a field day with it, but also ihyave already been payiong pension contruibutions before any pension levy.


i agree we are all on the same vote, but the minsiter said he is going to revaluate the pension levy for lower paid public servants like myself so as to make it fairer whcih i agree with.

the pension levy is heavily flwaed. for instance my boss make 10k more than me , but pays less of a "pension levy". It is for ereasons like this that lower paid public servants have hit the picket lines.