I am paying more for somebodys public sector pension than my own Private pension

P. Breathnach

grahamo wrote: »

... I attempted to show the average Joe in the public service is not getting back what he paid in. I stand by it...

You should never stand your ground when you are in a bad place. I'm not going to do the sums, because good sums involve an amount of research and effort.

My imputed contributions in the 1970s seemed large, at a few hundred pounds a year. Viewed from 2009, they seem small. But in the 1970s I never imagined that I would have (or need) a pension of the size I now get. To do good calculations, I would need to research changes in cost of living or the purchasing power of money, rates of interest over the years, tax rates over the years, and then there is a need to take account of incremental scales and a case to make for adjusting for promotion from one scale to another. One need also to take account of changes in life expectancy and the adjustment of pensions to keep in line with current remuneration levels. As I said, I'm not going to do the sums, but I know that I am benefitting from a good package.

Naz_st

grahamo wrote: »

ALL the people on contract I know will get nothing back as even though they don't pay into the pension fund they are still charged the pension levy (Is that a rip off or what?).

I agree completely. The way it was implemented was grossly unfair. Par for the course for this government it seems.

Personally, I think a maximum cap on public pensions makes sense - the really big earners such as the politicians and higher levels of the civil service really cream it off the top with 100k+ pensions. There should be maybe a 50k cap and if you want a 100k pension, put some of your income into a private DC pension to augment the public one. The state could use the excess gained by that to bolster the pensions for the lower paid public service worker. Having a cap (so long as the cap rose with inflation to some degree) would also limit the effects of the pay-pension parity link which I think is seen by many as unfair only because of the effect on making some already very generous pensions even more generous.

Anyway, I'll leave the further calculations to Thoie since I've no time this week to look into it any further. It's been an interesting exercise for me though, even if all I proved is that it's far too complicated to make simple generalisations about! And that goes for both "sides"! (And "sides" really is the wrong term as I genuinely think that P. Breathnach's point on us all being in the same boat is the most important one.)

10000maniacs

grahamo wrote: »

In reply to the OP who stated that he is paying for all public sector pensions

The original PM is right on the money;), and has yet to be proved wrong on this forum.
This forum has exposed the unsustainable pension apartheid that exists in this country. I am confident that it will soon be sorted out for once and for all if not by the government, then by the IMF.

grahamo

10000maniacs wrote: »

The original PM is right on the money;), and has yet to be proved wrong on this forum.
This forum has exposed the unsustainable pension apartheid that exists in this country. (Where?)I am confident that it will soon be sorted out for once and for all if not by the government, then by the IMF.

Right on the money? yeah right!:rolleyes: as I said before have a look at post #2 and tell me which bit you think is wrong. There only figures off the top of me head but its still a hell of a lot more of an argument than you've contributed to the thread.
All I see in your posts are bile & bitterness

P. Breathnach

10000maniacs wrote: »

The original PM is right on the money;),

It's essentially a rant, and the header is demagoguery.

and has yet to be proved wrong on this forum.

Rants are normally beyond the range of proof or disproof.

This forum has exposed the unsustainable pension apartheid that exists in this country. I am confident that it will soon be sorted out for once and for all if not by the government, then by the IMF.

Jaysus! Have we another of those those who want the IMF in?

P. Breathnach

grahamo wrote: »

Right on the money? yeah right!:rolleyes: as I said before have a look at post #2 and tell me which bit you think is wrong...

Several bits, in fact. Most particularly: "the public sector employee pays 6.5% of income".

ParkRunner

P. Breathnach wrote: »

Several bits, in fact. Most particularly: "the public sector employee pays 6.5% of income".

http://www.cspensions.gov.ie/faq2.pdf

4. Do I pay contributions for these benefits? Officers who are in the
contributory scheme pay a personal contribution. These officers also
pay Class A PRSI but their salary is higher (i.e. 20/19ths) than the
standard salary.
The personal contribution is 1½% of pensionable remuneration plus 3½
% of net pensionable remuneration.
Officers also pay contributions of 1½% of pensionable remuneration for
spouses’ and children’s pension

Not only this 6.5% contribution but now also the pension levy on top of this. None of this is optional either

grahamo

EF wrote: »

http://www.cspensions.gov.ie/faq2.pdf



Not only this 6.5% contribution but now also the pension levy on top of this. None of this is optional either

Exactly! Nobody has the choice. If it was up to me I'd stick all me contributions in the post office. I'd earn more from it that way.

cd27

If public sector unions want their pensions so bad, maybe we should ask that they actually contribute the real cost of what it would cost to fund them. Small problem, they're so generous it would cost them have their week's wages!

The whole pay and pension thing for the public sector is out of control.

grahamo

cd27 wrote: »

If public sector unions want their pensions so bad, maybe we should ask that they actually contribute the real cost of what it would cost to fund them. Small problem, they're so generous it would cost them have their week's wages!

The whole pay and pension thing for the public sector is out of control.

Are you on a wind up? Have you actually read through this thread?
What they actually cost and what they actually contribute has been discussed all the way through it!

P. Breathnach

EF wrote: »

http://www.cspensions.gov.ie/faq2.pdf

Not only this 6.5% contribution but now also the pension levy on top of this. None of this is optional either

Let's not be too selective in quoting. I was picking up a claim that "the public sector employee pays 6.5% of income". You hit back with the fact that people pay a total of 6.5% on pensionable remuneration, a claim that I do not contest. It should be made clear what this "pensionable remuneration" is, and that is actually done in the same document you cite:

Pensionable remuneration is basic salary plus pensionable allowances.
Net pensionable remuneration, for the purpose of contributions, is
pensionable remuneration, less twice the maximum rate of Social
Welfare State Pension (Contributory) payable to a single person.

So the 6.5% is currently levied on only that part of salary that exceeds about €407 pw.

Given that grahamo was basing his illustration on a salary of €40k pa, it makes a big difference that just over half of it is exempted from the 6.5%.

I'm not here to knock the public service -- far from it. But let's present the facts fairly.

I'd happily give any public servant the option to stay out of the superannuation scheme, but I would think anybody who exercised the option (unless there were special circumstances) to be making a bad mistake.

K-9

EF wrote: »

http://www.cspensions.gov.ie/faq2.pdf



Not only this 6.5% contribution but now also the pension levy on top of this. None of this is optional either

So they get 1/20 extra pay to pay the PRSI. Nice!

P. Breathnach

K-9 wrote: »

So they get 1/20 extra pay to pay the PRSI. Nice!

No, that's not why they get more (and, with my preference for getting things right, I should point out that is 1/19, not 1/20). I explained what it was about in one of our earlier public-service-bashing threads, and think it was to you I offered the explanation.

It seems to be a bit of a futile project to set out here the facts and the rationale underlying policy and practice.

K-9

P. Breathnach wrote: »

No, that's not why they get more (and, with my preference for getting things right, I should point out that is 1/19, not 1/20). I explained what it was about in one of our earlier public-service-bashing threads, and think it was to you I offered the explanation.

It seems to be a bit of a futile project to set out here the facts and the rationale underlying policy and practice.

I understand that, but really, it does look like that!

jimmmy

cd27 wrote: »

If public sector unions want their pensions so bad, maybe we should ask that they actually contribute the real cost of what it would cost to fund them..

I agree 100%

A typical Garda taking early retirement for example has a pension pot worth over 1 million euro ....imagine if he was in the private sector and was to have funded that himself !

cd27 wrote: »

The whole pay and pension thing for the public sector is out of control.

Even the RTE programme on a month ago, devoted to public sector gravy train, agreed with you there. George Lee, Eddie Hobbs, every economist there is and 1,800,000 people in the private sector agree with you.

P. Breathnach

jimmmy wrote: »

Even the RTE programme on a month ago, devoted to public sector gravy train, agreed with you there. George Lee, Eddie Hobbs, every economist there is and 1,800,000 people in the private sector agree with you.

Source for your numerical claim? Or are you making things up again?

grahamo

jimmmy wrote: »

I agree 100%

A typical Garda taking early retirement for example has a pension pot worth over 1 million euro ....imagine if he was in the private sector and was to have funded that himself !



Even the RTE programme on a month ago, devoted to public sector gravy train, agreed with you there. George Lee, Eddie Hobbs, every economist there is and 1,800,000 people in the private sector agree with you.

Average garda pension worth a million euro?? Why did you not join the gards then? Mind you if he was in the private sector he wouldn't have to fund it all himself as the employer would make contributions. (If he was any good of an employer);)

badlyparkedmerc

The why didn't you join the Gardai so "argument" is as facile as somebody making a comment like "why don't you become a TD".

Many thousands of people do try to join the Gardai, enormous demand for those jobs. Some will be ruled out by health reasons etc. but the demand is so high it's virtually a lottery for eligible candidates. Many people who want to become policemen for reasons outside money end up emmigrating and following their dream abroad.

Check out the Garda pages on boards - the discussions on how to join are usually only topped in lenght by Liverpool transfer discussions. Does it look like a job that's struggling to attract people?

The reason a Garda pension is worth a million is because it's obtainable at 50, so they retire they'll get a lump sum of around 90k tax free, and a 30k salary linked pension for an expected 30-40 years. The contributory pension will kick in at 66 but to be honest I'd expect 1 million is an under estimate of the pension value since annuities are so low now.

A good employer who'll pay somebody a million pension pot by age 50 would also be known as a bankrupt employer, i.e a bad employer. The only private sector companies who can offer such pension are ones working in effective monopolies or professions with highly regulated entrance rules (no foreigners please), in my view these are also bad employers as they're ripping off the general public.

jimmmy

Excellent points well made badlyparkedmerc

P. Breathnach

grahamo wrote: »

Average garda pension worth a million euro??

It's in the right ballpark, for the reasons given by baldyparkedmerc.

...Mind you if he was in the private sector he wouldn't have to fund it all himself as the employer would make contributions...

That's a fair point, one that the public service bashers tend to ignore.

ixoy

P. Breathnach wrote: »

It's in the right ballpark, for the reasons given by baldyparkedmerc.

It was in the Irish Independent as well (surprise). It's true even if it's a more extreme example of the pensions.
There was a topic on the Emergency Services forum about it and some tried to say that the figures supposed a retired-Garda lived for 30 years afterwards but they claimed many only lasted 5-10 years. Never saw any evidence to corroborate that claim though.

That's a fair point, one that the public service bashers tend to ignore.

Are employers legally obligated to match these? I believe so - it's only if you take out your own private pension that you won't get matching contributions.

Thoie

ixoy wrote: »

Are employers legally obligated to match these? I believe so - it's only if you take out your own private pension that you won't get matching contributions.

Sorry I didn't get to do the figures last night, and it will be Tuesday before I get a chance again.

However, employers have no legal obligation to match pension contributions in any way. My experience is that the majority don't. In my current job my employer is contributing (first of my employers to do this), but they're not matching my contribution - if I pay x% of my salary, they put in y% of my contribution (not of my salary).

grahamo

Thoie wrote: »

Sorry I didn't get to do the figures last night, and it will be Tuesday before I get a chance again.

However, employers have no legal obligation to match pension contributions in any way. My experience is that the majority don't. In my current job my employer is contributing (first of my employers to do this), but they're not matching my contribution - if I pay x% of my salary, they put in y% of my contribution (not of my salary).

Yes its not mandatory, but lets face it. You would want to be a pretty ****ty employer to refuse to help out your employees with a pension. Every job bar 1 that I had in the private sector had a pension scheme, 2 matched contributions, 1 doubled contributions.(I've had 4 long term jobs before my current job) All bar 1 threw in free health insurance too. If you want the best staff. You will offer the best pension scheme you can.

kindajaded

badlyparkedmerc wrote: »

The why didn't you join the Gardai so "argument" is as facile as somebody making a comment like "why don't you become a TD".

Many thousands of people do try to join the Gardai, enormous demand for those jobs. Some will be ruled out by health reasons etc. but the demand is so high it's virtually a lottery for eligible candidates. Many people who want to become policemen for reasons outside money end up emmigrating and following their dream abroad.

Check out the Garda pages on boards - the discussions on how to join are usually only topped in lenght by Liverpool transfer discussions. Does it look like a job that's struggling to attract people?

The reason a Garda pension is worth a million is because it's obtainable at 50, so they retire they'll get a lump sum of around 90k tax free, and a 30k salary linked pension for an expected 30-40 years. The contributory pension will kick in at 66 but to be honest I'd expect 1 million is an under estimate of the pension value since annuities are so low now.

A good employer who'll pay somebody a million pension pot by age 50 would also be known as a bankrupt employer, i.e a bad employer. The only private sector companies who can offer such pension are ones working in effective monopolies or professions with highly regulated entrance rules (no foreigners please), in my view these are also bad employers as they're ripping off the general public.

the average life expectancy for irish men at age 60 yrs is around 18 years not 30 - 40 years. that is unless most gardai are living to be 100!!
also the contributory pension wil NOT kick in at all: PS workers don't get the contributory pension - it's included in the 50%
i've wasted some of afternoon working out the figures though (for biffo - see below!!) and if a garda retires at 60 years their pension is very good value - much better than an eagle star pension. if they retire at 65 it isn't... and it may be off the point, and i stand to be corrected, but isn't retirement at 60yrs compulsory for gardai? i think there was a recent case where a garda wanted to keep working and wasn't allowed - maybe that should be changed.

jimmmy

grahamo wrote: »

You would want to be a pretty ****ty employer to refuse to help out your employees with a pension.

I do not think some cosseted public service can comprehend that the majority of the 1,800,000 private sector workers can not get a big fat public service type pension that eg a Garda taking early retirement gets.
As someone else wrote " A good employer who'll pay somebody a million pension pot by age 50 would also be known as a bankrupt employer, i.e a bad employer. The only private sector companies who can offer such pension are ones working in effective monopolies or professions with highly regulated entrance rules (no foreigners please), in my view these are also bad employers as they're ripping off the general public. "

kindajaded

cd27 wrote: »

If public sector unions want their pensions so bad, maybe we should ask that they actually contribute the real cost of what it would cost to fund them. Small problem, they're so generous it would cost them have their week's wages!

The whole pay and pension thing for the public sector is out of control.

ok cd27, biffo et al: you keep making these assertions but have not provided the figures.

i have worked this out using the following strategy:

• take a male currently aged 35 who has reached the top of their scale and will retire on that wage (i can't include more than that too complicated but the eagle star calculator assumes a rise of 3% per annum)
• this guy started working at 25yrs of age and for the last 10 years they have contributed a pension equal to the PS contribution at salaries of 25k for people earning 25k or 35k at 35 yrs; at rates for 35k for 10 yrs if on 45k at 35yrs; at rates of 45k if earning 55k or 65k at 35 yrs; at 55k if earning 85k at 35yrs. i used the 'rabo-direct' calcualtor for savings - so this contribution is made monthly for 10yrs and then as a single deposit for the final 30yrs
• i used the value of the savings of pension contributions for the first 10yrs in lieu of the lump sum at 65yrs
• i used the 'eagle star' calculator to work out how much a male currently aged 35 would have to contribute until retiring at 65 yrs with the state pension included (because that is how it is worked out for PS workers) and with no spouse pension (because that is also the case for PS workers) and index linked
• i made the comparisons based on how much you would have to contribute to 'eagle star' and save with 'rabo direct' to get the same pension as with a public service pension
• for very high earners (over 85k - 100k) i stopped calcuting early because the value of the PS pension over private pension and savings starts to rise slowly and does so exponentially for those earning over 150k at retirement who would have made large jumps in earnings from starting at age 25 yrs - so for these people biffo et al you are indeed correct

these are the comparisons to get the same pension and lump sum:

1. for a 35 yr old man making 25k at who started work on 25k : private contribution to pension would be 101 euro/month with eagle star and is 239 euros with PS and the lump sum would be 73k with savings and 37.5k with PS
2. for same man on 35k at 35yrs and on 25k for first 10yrs: eagle star cost = 311 euros/month; PS = 379e/month; savings = 73k; lump sum = 52.5k
3. on 45k age 35yrs and 35k first 10yrs: eagle star = 520e/month; PS = 525e/month; savings = 119k; lump sum = 67.5k
4. on 55k age 35yrs and 45k for the first 10 yrs: eagle star = 730e/month; PS = 641e/month; savings = 135k; lump sum = 77.5k
5. on 65k age 35yrs and 45k first 10yrs: eagle star = 940e/month; PS = 784e/month; savings = 135k; lump sum = 97.5k
6. on 85k age 35yrs and 45k first 10 yrs: eagle star = 1359e/month; PS = 1062; savings = 135k; lump sum = 127.5k

so lads you see:
A/ people below 45k (e.g. porters, caterers, some nurses) would actually be better off if they were allowed to keep the money and save for the first 10yrs and buy a pension after that - in fact those on 25k - 35k would be a lot better off
B/ those on 55k - 65k (e.g teachers, some nurses, mid - upper grade admin etc) would pay between 90 and 160 euros less on the PS for the same pension but get between 58k and 37.5k less in lump sum than if they saved the money - for these people there is no advantage or a slight disadvantage/advantage to the PS in that if you saved the 90 - 160 euros you get less but if it was added to an eagle star pension you'd probably get a bit more (sorry getting too tired to work that bit out)
C/ those on 85k are getting a very good deal in the PS pension - the savings are only slightly more than the lump sum but the ealge star pension would cost almost 300e/month more

that's it! anyone got any other calculations?
it looks to me like some adjustment within the 25k - 65k range might equal things out within the PS but that it should be possible for the state to continue the overall pensions bill with no cost (see below).
above and not including 65k PS workers would have to contribute more to make it cost neutral for the state.
in the case of very high earners - i.e. over 100k some combination of reducing the pensions and increasing the contributions would probably be necessary.
i say cost neutral because if eagle star and rabo-direct can make money on this thing then surely the state can at least break even.

P. Breathnach

jimmmy wrote: »

I do not think some cosseted public service can comprehend that the majority of the 1,800,000 private sector workers can not get a big fat public service type pension that eg a Garda taking early retirement gets...

jimmmy, have you anything else to offer? We have got the message that you feel outraged, and it becomes just a tad repetitive after a while.

Arguments supported by relevant data would be an interesting idea. Lord knows, even getting the basis of your rants right might be welcome (the point about Garda pensions was not based on their taking early retirement, but on the normal retirement conditions for Gardai).

grahamo

jimmmy wrote: »

I do not think some cosseted public service can comprehend that the majority of the 1,800,000 private sector workers can not get a big fat public service type pension that eg a Garda taking early retirement gets.
As someone else wrote " A good employer who'll pay somebody a million pension pot by age 50 would also be known as a bankrupt employer, i.e a bad employer. The only private sector companies who can offer such pension are ones working in effective monopolies or professions with highly regulated entrance rules (no foreigners please), in my view these are also bad employers as they're ripping off the general public. "

Don't talk rubbish Jimmmy, MOST employers are good enough to offer a pension scheme to their workers. Some are better than others. BTW where are you getting the rubbish from that only monopolies or professionals get pensions? By highly regulated entrance rules do you mean exam qualifications???;) Ithink a lot of people have them these days:rolleyes:
Also would your 'No foreigners' remark be implying that companies that offer pensions are somehow racist?
Your arguments just get more and more ridiculous.!!!
I've already acknowledged that SOME public sector pensions are VERY good value, for example TD's pensions,Gardai pension where you can retire early etc. but these are EXTREME cases, 99% of public sector workers WILL NOT get these massive pensions that you and a few others go on and on about relentlessly.
There are plenty of FACTS about public sector pensions on these boards and you acknowledge none of them, you just continuously post the same posts over and over and over ignoring facts, ignoring debate.
Its been posted on this thread that some married public servants retiring at 65 will get NO PENSION as the SW contributory pension will make up 50% or over of his salary yet you still manage to turn this big fat ZERO into a Big Fat Public Service Pension by using extreme cases as your examples. Mind you, I haven't actually seen any numerical data from you at all. Just Rants.

jimmmy

PBreathnach, instead of personally attacking me, can you not understand the point I made ?
Another poster wrote "You would want to be a pretty ****ty employer to refuse to help out your employees with a pension." Do you not understand what I wrote : "the majority of the 1,800,000 private sector workers can not get a big fat public service type pension that eg a Garda taking early retirement gets. "
As someone else wrote " A good employer who'll pay somebody a million pension pot by age 50 would also be known as a bankrupt employer, i.e a bad employer. The only private sector companies who can offer such pension are ones working in effective monopolies or professions with highly regulated entrance rules (no foreigners please), in my view these are also bad employers as they're ripping off the general public. "

Many an Employer is going out of business without providing big pensions for their employees...and are finding it hard enough to pay the bills they already have.

kindajaded

jimmmy wrote: »

I do not think some cosseted public service can comprehend that the majority of the 1,800,000 private sector workers can not get a big fat public service type pension that eg a Garda taking early retirement gets.
As someone else wrote " A good employer who'll pay somebody a million pension pot by age 50 would also be known as a bankrupt employer, i.e a bad employer. The only private sector companies who can offer such pension are ones working in effective monopolies or professions with highly regulated entrance rules (no foreigners please), in my view these are also bad employers as they're ripping off the general public. "

jimmy - could you please read my calculation just below your last post - i did this using online 'eagle star' and 'rabo-direct' calculators - you keep saying that people in PS get great pensions and that it costs the state but if you actually spend the time to work it out you are wrong for anyone on less tha approximately 85k - and that is using conservative estimates and not including any profit the state could make from having a large pension fund - e.g. using it as a bail out for the banks