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

grahamo

The Insider wrote: »

Have you guys actually read my posts?

kceire when you retire in 35 years time the max wage in your scale WILL NOT be 49k it will be more likely to be around the 120k mark or more (as I have explained in my previous posts). You will be guaranteed 50% of this which is 60k, take away the state pension (lets say it has doubled in that same period) and you are left with 36k per year, multiply this by 13 and you get close to 500,000. That's why it is so lucrative as there is no way you would have built up this much in the 35 year period.

grahamo a public sector worker will not cover the cost of his pension, I think my previous posts have clearly shown this... so the question is who is going to make up the difference?

I think this post will show a public sector worker does pay for his pension...Here goes....Here is a link to a basic compound interest calculator

www.bygpub.com/finance/InterestCalc.htm

OK. for an example,
KCEIRE's weekly contribution towards pension is say 75 euro. Pension plus pension levy.
You put this 75 euro into a savings account every week for 40 years.
after 40 years at a low interest rate of 3% (in reality interest rates would go between 3% and 6%. Even at the low of 3% kceire's contributions would be worth 305,548 euro.
(In reality the contributions would have earned a lot more)
Also if you gave an average annual pay rise of say 2% this would mean wages at retirement would be roughly double, meaning that steadily contributions would increase, further increasing the value of this fund. ( I know the maths are seriously complicated and it would be extremely difficult to work out accurately).

So What shortfall? I'll say it again. He/She is more than paying for that pension.

The Insider

grahamo wrote: »

I think this post will show a public sector worker does pay for his pension...Here goes....Here is a link to a basic compound interest calculator

www.bygpub.com/finance/InterestCalc.htm

OK. for an example,
KCEIRE's weekly contribution towards pension is say 75 euro. Pension plus pension levy.
You put this 75 euro into a savings account every week for 40 years.
after 40 years at a low interest rate of 3% (in reality interest rates would go between 3% and 6%. Even at the low of 3% kceire's contributions would be worth 305,548 euro.
(In reality the contributions would have earned a lot more)
Also if you gave an average annual pay rise of say 2% this would mean wages at retirement would be roughly double, meaning that steadily contributions would increase, further increasing the value of this fund. ( I know the maths are seriously complicated and it would be extremely difficult to work out accurately).

So What shortfall? I'll say it again. He/She is more than paying for that pension.

Your calculations are off, kceire already said he would only be doing a 35 year term and he pays €3654 a year not €3957, as I said before you are probably looking at about 100k over the period.

Even if we take your figure of €305,548 that's still not enough!

I say this for the last time, have you read any of my posts???

The Insider wrote: »

Yes they will but in the private sector it doesn't matter what your wage is when you retire, whatever is in your pension pot is just that (if your lucky enough to have one). You on the other hand are guaranteed 50% of your current salary when you retire no matter how little you have contributed to your pension!!!

So if your wages where 120,000 when you retire, that's 60,000 per year, let's say the standard pension doubles in the same period to keep everything equal, that means you are getting paid roughly 36,000 per year out of your pension, multiply this by 13 years and you are little short of 500,000 and that's not including the amount it will come up because it's index linked!! You will come no where near paying that amount of your 35 year period, not even close!

Not sure on the average PS salary for 1978 but here is a good link to show you the average PS salary's for the past 8 years, they have nearly doubled in size.

http://www.cso.ie/statistics/public_sector_earnings.htm

The Insider wrote: »

I would say its a fair assumption if you take into consideration the average wage 31 years ago was £3458

http://historical-debates.oireachtas.ie/D/0311/D.0311.197902060031.html

If you look at the increase in the wages in the Public Sector from 2000 - 2008 you will see they had nearly doubled

http://www.cso.ie/statistics/public_sector_earnings.htm

Saying a wage will treble in a time period 4.5 times longer is not unreasonable and in fact I would say it is being quite conservative.

The rate of state pension in all probability would not match the wages, but for arguments sake lets say it does, so we treble it and we get 36k, take that away from the 60k and you are left with 24k, multiply by 13 years and you get 312,000 and that's not including the lump sum or the index related increases over the 13 year period.

kceire's contribution would not come any where near this, so again I ask you where does the shortfall come from?

I ask one last time and then I give up since you refuse to answer the question.... who makes up the shortfall? It's a simple question with a simple answer.

NewDubliner

The Insider wrote: »

I ask one last time and then I give up since you refuse to answer the question.... who makes up the shortfall? It's a simple question with a simple answer.

The same people (Joe the Taxpayer) who makes up the shortfall on private sector pensions?

Private pension plans rely on property investment and the government is paying top dollar on rent plus it's supporting property prices by way of the bank bail-out.

We're all members of the same economic system.

K-9

NewDubliner wrote: »

Pre-1995 CS staff get paid less.

But pay less PRSI.

NewDubliner

K-9 wrote: »

But pay less PRSI.

Yes the difference is the amount of PRSI paid by the post 95'ers, so in effect, they pay same amount as everyone else, but are not entitled to many PRSI-related benefits.

grahamo

The Insider wrote: »

Your calculations are off, kceire already said he would only be doing a 35 year term and he pays €3654 a year not €3957, as I said before you are probably looking at about 100k over the period.

Even if we take your figure of €305,548 that's still not enough!

I say this for the last time, have you read any of my posts???

My apologies, I put 75 euro into the calculator rather than 70.26 euro
I think your maths are WAY OFF.
Assuming both wages and state pension increase in line with each other over the years.
OK, so 3654 makes 70.26 euro per week rather than 75 euro per week. Even that gives a fund of 283000 euro over 40 years. This is being seriously conservative because as salary increases so do contributions and we are assuming a very low long term return of 3% interest.

As he only paid in for 35 years he only gets so he only receives 7/8ths of pension and 7/8ths a lump sum.
Now if he is married (Most people are he will receive a state pension of lets say 42k (double todays rate) 50% of his salary is 40k, (lets say his salary also doubled in his lifetime to 80k) the state pension is more than 50% salary so he receives NO public sector pension. Where's the shortfall?
If salary is 80k lump sum will = 120k x 7/8ths = 105k.

His fund will be worth a lot lot more more than 283k but we'll go with that.
283k - 105k = 178k overpayment

Where's the shortfall?

If he's not married or has no dependents (Highly unlikely)
lump sum= 105k
Pension = 50% salary x 7/8ths (Seeing as he only has 35 years service)
State pension = 24k (double todays rate)
Therefore pension = 16k x 7/8 = 14k per annum.
If he lives to average life expectancy of 78
Pension= 14k x 13 years = 182k + Lump sum = 105k = 287k

I'll ask you again Seeing as his fund is seriously underestimated due to those contributions doubling from 70.26 euro to 140.52 euro over his/her working life.Where is the Shortfall?
If salary triples or quadruples contributions will triple or quadruple and I think its safe to say the state pension will increase in line with this in the future.

The Insider wrote: »

I ask one last time and then I give up since you refuse to answer the question.... who makes up the shortfall? It's a simple question with a simple answer.

Answer is above

The Insider

grahamo wrote: »

My apologies, I put 75 euro into the calculator rather than 70.26 euro
I think your maths are WAY OFF.
Assuming both wages and state pension increase in line with each other over the years.
OK, so 3654 makes 70.26 euro per week rather than 75 euro per week. Even that gives a fund of 283000 euro over 40 years. This is being seriously conservative because as salary increases so do contributions and we are assuming a very low long term return of 3% interest.

Should be doing that over 35 years grahamo and not 40. An average of 3% is what all pension managers etc will use when showing you calculations based on sticking your private pension into a bank account over a 30/35/40 year period.

grahamo wrote: »

As he only paid in for 35 years he only gets so he only receives 7/8ths of pension and 7/8ths a lump sum.
Now if he is married (Most people are he will receive a state pension of lets say 42k (double todays rate)

If he is married and his/her partner has worked very little throughout their life and is currently not working then he may be entitled to claim for adult dependency which is not the full amount of a normal state pension.

grahamo wrote: »

50% of his salary is 40k, (lets say his salary also doubled in his lifetime to 80k) the state pension is more than 50% salary so he receives NO public sector pension. Where's the shortfall?
If salary is 80k lump sum will = 120k x 7/8ths = 105k.

His fund will be worth a lot lot more more than 283k but we'll go with that.
283k - 105k = 178k overpayment

Where's the shortfall?

If he's not married or has no dependents (Highly unlikely)
lump sum= 105k
Pension = 50% salary x 7/8ths (Seeing as he only has 35 years service)
State pension = 24k (double todays rate)
Therefore pension = 16k x 7/8 = 14k per annum.
If he lives to average life expectancy of 78
Pension= 14k x 13 years = 182k + Lump sum = 105k = 287k

I'll ask you again Seeing as his fund is seriously underestimated due to those contributions doubling from 70.26 euro to 140.52 euro over his/her working life.Where is the Shortfall?
If salary triples or quadruples contributions will triple or quadruple and I think its safe to say the state pension will increase in line with this in the future.

Answer is above

The average public sector pay nearly doubled in the space of 8 years, the state pension increased by about 40% in the same period.

http://www.cso.ie/statistics/public_sector_earnings.htm

Do you really believe the max salary will only double over a 35 year time period?

One final thing, your public sector pension is index linked so over the 13 year period it will rise (with of course no additional contributions needed). As you can see from the link above the average public wage in the past 8 years nearly doubled so over a 13 year period I think its safe to assume an index linked pension will rise by a nice amount. Anybody in the private sector who was offered a guaranteed pension of 50% of their retirement salary which would be index linked for 11.5% of their monthly salary would bite your hand off.

At the end of the day grahamo you can deny it all you want but there is a shortfall in the public sector pensions bill ever year. How much you ask? Around €1.7billion out of the €20bn set aside for public sector pay this year. That's on a pay as you go basis by the way, so there will be a similar bill next year, and the year after that and the year after that.... well you get my drift.

grahamo

The Insider wrote: »

Should be doing that over 35 years grahamo and not 40. An average of 3% is what all pension managers etc will use when showing you calculations based on sticking your private pension into a bank account over a 30/35/40 year period..

They may use 3% as an example but you will get a lot more than a 3% return.
Even now with the lowest interest rates since WW2 I can find accounts offering better interest rates than 3%. Even over a 35 year period and at a time of historically low interest rates that fund would grow very well indeed'

The Insider wrote: »

If he is married and his/her partner has worked very little throughout their life and is currently not working then he may be entitled to claim for adult dependency which is not the full amount of a normal state pension.

You are right, it is slightly less than the full rate for an adult dependent. I think its around 22k /year for a married/cohabiting couple.

The Insider wrote: »

The average public sector pay nearly doubled in the space of 8 years, the state pension increased by about 40% in the same period.
Do you really believe the max salary will only double over a 35 year time period?.

Most peoples pay doubled over the last decade. Then again the cost of living doubled over the last decade. House prices more than doubled, A pint of Guinness more than doubled, the weekly shop more than doubled etc.
However, if you worked through the 1980's you will remember that wages remained almost static for years. (unless you were a TD):)
I think its very reasonable to assume that the state pension will increase in line with wages over the years.
Also, it doesn't matter whether wages double, triple or quadruple over the years as contributions rise to match this.

The Insider wrote: »

One final thing, your public sector pension is index linked so over the 13 year period it will rise (with of course no additional contributions needed). As you can see from the link above the average public wage in the past 8 years nearly doubled so over a 13 year period I think its safe to assume an index linked pension will rise by a nice amount. Anybody in the private sector who was offered a guaranteed pension of 50% of their retirement salary which would be index linked for 11.5% of their monthly salary would bite your hand off. .

As I've said, even if the pension doubled in this time, It is fairly safe to assume the state pension will increase in line with this so the married public sector pensioner will still be receiving a state pension worth more than 50% of salary so therefore no public sector pension.

The Insider wrote: »

At the end of the day grahamo you can deny it all you want but there is a shortfall in the public sector pensions bill ever year. How much you ask? Around €1.7billion out of the €20bn set aside for public sector pay this year. That's on a pay as you go basis by the way, so there will be a similar bill next year, and the year after that and the year after that.... well you get my drift.

You have to remember you won't be drawing out all this fund at once, over the 13 years or so of average life expectancy the money in a fund would still be earning interest.
I'm sure there may well be a pension shortfall from previous years as pre 1995 people who may be retired now didn't have to pay a lot for their pension (Pre 1995 people don't receive the state pension) but now we have a pension levy in I doubt very very much there will be a shortfall in the future as public sector staff are now paying more than twice the amount they were paying.( And the lower paid are paying a lot more for a lot less)
The only people who would get more out of it than what they put in now are the very highly paid public sector (TD's etc.) staff who are in the minority.

jimmmy

grahamo wrote: »

They may use 3% as an example but you will get a lot more than a 3% return.

After paying dirt tax etc you will not get "a lot more than a 3% return" on money invested now from a relatively reputable secure financial institution.

grahamo wrote: »

Most peoples pay doubled over the last decade.

It was the period of the last 8 years which was the time frame ; you have stretched this 25% . In addition, many people would have got promotion or additional qualifications over the past 8 years, so their pay would have gone up. No, the point is that average public service pay virtually doubled in the past 8 years ( May 2001 to May 2009.) Most pay rates in the private sector in May 2009 are not double what they were in 2001....for those lucky enough to still have a job.

kindajaded

The Insider wrote: »

I would say its a fair assumption if you take into consideration the average wage 31 years ago was £3458

http://historical-debates.oireachtas.ie/D/0311/D.0311.197902060031.html

If you look at the increase in the wages in the Public Sector from 2000 - 2008 you will see they had nearly doubled

http://www.cso.ie/statistics/public_sector_earnings.htm

Saying a wage will treble in a time period 4.5 times longer is not unreasonable and in fact I would say it is being quite conservative.

The rate of state pension in all probability would not match the wages, but for arguments sake lets say it does, so we treble it and we get 36k, take that away from the 60k and you are left with 24k, multiply by 13 years and you get 312,000 and that's not including the lump sum or the index related increases over the 13 year period.

kceire's contribution would not come any where near this, so again I ask you where does the shortfall come from?

i had a look at this link you posted http://www.cso.ie/statistics/public_sector_earnings.htm
and i am not sure how you have worked out that the ps wages have doubled in 8 years?
e.g. a garda on 737 in 2000 is on 1,076 in 2008 - that is a rise of approx 50% not 100%. the most generous raises are only barely 60% (civil servants) and alot (e.g. prison officers at 26%) much less.
there are lots of good reasons for this and one could argue that the raises should have been lower but they were not 100% - or doubled - as you keep saying. if you calculate what inflation alone would bring a salary of 737 in 2000 up to in 2008 it is approx 930 - so the actual wage increase was more like 100 euros.
in addition this rise occured during the 'benchmarking' period that is unlikely to be repeated on the same scale unless in the opposite direction.

wrt the 'shortfall' form PS pension contributions:
there should not be any shortfall (beyond what the fair and agreed employer contribution to a compulsory pensions should be.)
you keep saying that because of inflation pension fund will lose out.
if this is so then why can ANY worker go and buy a defined benefit pension with a 5% contribution from their employer and get the same payout as with a PS pension (PS worker contribution + 5% employer contribution - for those on 65k or less - i.e. nearly everybody)?
the answer is that having your money for 30 or 40 years is a great way of earning more money. there have not been any zimbabwe type problems with inflation here and i suspect that if there were PS pensions would be in just as much trouble as private ones.
in the meantime it is worth the while of private companies taking the money and absorbing the cost of inflation because they can make even more money out of the funds and you can choose how much risk you want to take to make even more oney if you are a gambler.

if the state is worried that they cannot make up the shortfall and think they are too incompetent to make money out of the large pension funds then all they have to do is send the money directly to a private pension fund - for a d.b., index linked etc pension that will pay out 50% of final salary.

i agree that the one of the changes that should be made is stopping the increases in retirees pensions as salaries go up for those working.
also any large jumps in salary should result in some adjustment in the final payout.

but most people just don't make very large jumps in salary over their working lifetime. working out the employer contribution for someone working 40 years with the 1st 10 years on a 10k-20k lower salary than what they retire on you still only get a 5% employer contribution to get a PS level pension and lump sum just by saving with rabo direct and eagle star (i.e. if you include the 5% contribution and exclude the state pension).
and if the governement don't want the advantages or the challenges of the pension funds they could simply put it all into a private company.

another point about the shortfall - how much money do you think it would have cost the government to borrow (if they had even been able to) the money they took from the pension fund to bail out the banks?

i think you also said something about the lack of security for private funds - this is a big problem. but it does look like the goverment might be trying to start something to improve this situation. another government:D might do more. most recently CIC and the government started to iron out a deal re using pension funds for state projects (should add that this only proves the point about the value of a fund to state - they will have to pay for this - they would not have had to pay if it were state pension money) anyway point is the state is working with the private pension fund in a way that will benefit both sides in the immediate future but, like it or not, will cost the taxpayer.

grahamo

jimmmy wrote: »

After paying dirt tax etc you will not get "a lot more than a 3% return" on money invested now from a relatively reputable secure financial institution.

It was the period of the last 8 years which was the time frame ; you have stretched this 25% . In addition, many people would have got promotion or additional qualifications over the past 8 years, so their pay would have gone up. No, the point is that average public service pay virtually doubled in the past 8 years ( May 2001 to May 2009.) Most pay rates in the private sector in May 2009 are not double what they were in 2001....for those lucky enough to still have a job.

I used a round figure of 10 years as wages clearly haven't doubled in 8 years.
'Virtually doubled' isn't 'actually doubled' Jimmmy:)
Also 10 years ago I was in the private sector and it was around 5 years before that ,1993/94 when wages started to really go upwards in Ireland after being stagnant for years on end.
As for 'most of the private sectors wage hasn't doubled' even the minimum wage has doubled since 10 year ago.
But then again the cost of living has more than doubled in 10 years. For instance, A pint in 1999
was about 2 quid, (about 2.40 in euro) Now its almost 5 Euro. (In Dublin anyway).

P. Breathnach

I recently did a little exercise. I happened to remember exactly what my annual PS salary was in 1971 and I was able to find what the salary was for the same grade in 2003. Nominally, it had increased by a little over 1500%. I adjusted for purchasing power changes over the same period: it fell by a bit over 90%. The net effect was that the real income for that job increased by 52%.

[I didn't bring it up to a more recent date than 2003 because I couldn't find the data conveniently, and I wasn't sufficiently interested to dig hard. The exercise was simply a minor amusement for me.]

jimmmy

grahamo wrote: »

I used a round figure of 10 years as wages clearly haven't doubled in 8 years.

Public sector ones more than have, as you well know. Not only that, public sector expenditure by the government doubled between 2003 and now.

grahamo wrote: »

A pint in 1999 was about 2 quid, (about 2.40 in euro) Now its almost 5 Euro. (In Dublin anyway).

And a lot of that money goes towards now paying the government and its employees and their big pensions. Not everything has doubled...eg look at car prices, petrol, oil, clothes, televisions, sports equipment, holidays, air fares ...the price of many things was never cheaper in real terms. eg the typical Irish public servant can easily afford a return trip to Australia and a few nights b+b thrown in for good measure for just one weeks gross salary. What other average public servant from any other country in the world is as well off / could afford that on one weeks gross salary?

P. Breathnach

jimmmy wrote: »

... the typical Irish public servant can easily afford a return trip to Australia and a few nights b+b thrown in for good measure for just one weeks gross salary. What other average public servant from any other country in the world is as well off / could afford that on one weeks gross salary?

Australian ones.

Mr. Presentable

jimmmy wrote: »

the typical Irish public servant can easily afford a return trip to Australia and a few nights b+b thrown in for good measure for just one weeks gross salary. ?

Really? Can you support this statement? My wife, a typical Public servant, might manage that trip on a month's salary. Are you suggesting she's holding out on me?

kindajaded

The Insider wrote: »

And since you don't seem to believe my figures no matter what I say, have a read of this if you are bothered

http://www.independent.ie/national-news/garda-pension-worth-836411m-1664588.html

i read this link that you also gave insider and for the entire article the massive value of pensions for gardai who retire very early, people who will retire soon and paid hardly any levy and the very highest paid - people who have made large jumps in salary are discussed. NOT most PS workers.

there is then this little bit at the end about Imelda Marcos the clerical worker:

"The Rubicon figures also show that a clerical officer who joins the service on a salary of €24,397 and retires on a salary of €39,568. This officer would have a tax-free lump sum of €59,352 and a pension of €19,784.
The pension pot of this worker would cost around €570,000 to buy on the open market."

i am not sure how they worked this out but if you take the contributions of a PS worker on 25k for 10 years and save it in an AIB saver account and then take their contributions on 39k and save it for 30 years you get about 280,000 euros.
next multiply 19,784 euros by 18 years (beign optimistic - let the guy live to be 83yrs) you get 356,112 plus lump sum = 415,464.

now :
A/ why someone would buy something worth 415,464 euros for "570,000 to buy on the open market" is beyond me and suggests that whoever wrote this either had an agenda or a problem with maths (and since it was supposedly an actuary i doubt they did)
B/ the actual contribution by the state = 135,000 which by contributing approx 5% of a salary of 25k for 10yrs and 5% of a salary of 39K for a further 30 years it could make up by savings alone `

what this means is that to "buy this pension on the open market" the worker would have to contribute no more than they are contributing now if their employer contributed no more than an extra amount in the region on 5% of salary.

it is obvious that the pensions of people in specific situations viz retirement and large salary jumps and v high salaries are too high but why do you keep on using the situations of these people to prove an argument that is clearly a completley different argument about the bulk (in terms of numbers not salaries) of PS workers who are in a completely different situation?

jimmmy

P. Breathnach wrote: »

Australian ones.

Wrong actually. Australian public sector pay is considerably less than ours. Now I ask you again : What other average public servant from any other country in the world is as well off / could afford that on one weeks gross salary?

grahamo

jimmmy wrote: »

Public sector ones more than have, as you well know. Not only that, public sector expenditure by the government doubled between 2003 and now.

Wrong again Jimmmy, Not one salary on that list has doubled and they certainly haven't 'more than doubled' :rolleyes:
http://www.cso.ie/statistics/public_sector_earnings.htm
see for yourself!

A

jimmmy wrote: »

[nd a lot of that money goes towards now paying the government and its employees and their big pensions. Not everything has doubled...eg look at car prices, petrol, oil, clothes, televisions, sports equipment, holidays, air fares ...the price of many things was never cheaper in real terms. eg the typical Irish public servant can easily afford a return trip to Australia and a few nights b+b thrown in for good measure for just one weeks gross salary. What other average public servant from any other country in the world is as well off / could afford that on one weeks gross salary?

:D:D
The argument about the 'big pensions' is constantly being blown out of the water here. I'll agree that if you are a top civil servant or TD you get a nice pension package. If you are an ordinary joe the pension is Very Ordinary
and you would earn more by putting your contributions in the fecking post office every week Prove me wrong Jimmmy. Fact is you can't!!!

As for the return trip to Australia????? WTF????

Any way, the point of the thread was a claim that taxpayers pay for public sector pensions.
If you were to take those same contributions and stuck them in the post office you would get 3.5% compound interest in a long term savings plan (more if you looked elsewhere) and by your retirement you would have enough money to fund a pension. Therefore OP is wrong! End of!

Thread is now gone back full circle again with accusations from Jimmmy as usual that the government spends all its money on its employees and their 'Big Pensions'

Do we really need to go through it all again?

jimmmy

nipplenuts wrote: »

Really? Can you support this statement?

certainly. If you had ready the rest of this thread there would be no need to do so. Average public sector pay in this jurisdiction is 966 euro per week, plus perks, as has been widely reported and is well known. Even the c.s.o. has confirmed that.

P. Breathnach

jimmmy wrote: »

Wrong actually. Australian public sector pay is considerably less than ours...

Not wrong actually. It's no problem for an Australian public servant to visit Australia. It appears that irony is wasted on some people here.

grahamo

jimmmy wrote: »

certainly. If you had ready the rest of this thread there would be no need to do so. Average public sector pay in this jurisdiction is 966 euro per week, plus perks, as has been widely reported and is well known. Even the c.s.o. has confirmed that.

Groan! Here we go again!:rolleyes:
Your now famous average earnings of 966 euro plus perks (What perks?):D
are got by taking the average wage of everyone in the public sector from the top TD's and ministers through judges,ministers,consultants,doctors,lawyers,
all the way down to the canteen ladies. You can be sure the ordinary joe earns nothing like what the top people earn.

P. Breathnach

jimmmy wrote: »

... Average public sector pay in this jurisdiction is 966 euro per week, plus perks, as has been widely reported and is well known. Even the c.s.o. has confirmed that.

Again I ask: what perks? And where has the CSO commented on public service perks?

Are you making things up?

jimmmy

grahamo wrote: »

and you would earn more by putting your contributions in the fecking post office every week Prove me wrong Jimmmy. Fact is you can't!!!

After paying dirt tax etc you will not get "a lot more than a 3% return" on money invested now from even " the fecking post office "
Fact. You are proven wrong yet again.

kindajaded

it would appear that some people have not understood that the use of savings account calculators in this thread has been as a proxy for calculating the value accrued by pension funds because it is very difficult to find a calculator that will give a more accurate figure.
it has been assumed by anyone, that i have read here anyway, that calculating in this way (which underestimates the amount made by the funds) that the savings will be tax free because they are being used for pension purposes.
so if one had their pension saved in a post office account, say, they would not pay dirt or any other tax in this hypothetical situation.

grahamo

Just to keep Jimmmy happy if I earned 966 euro a week my pension contributions would be 6274.62 per year. This is 120.67 euro per week. pension levy can be worked out here.

http://www.joinatradeunion.com/calculate.aspx


Stick this amount into a simple compound interest calculator at a VERY low long term return of 3%.

http://www.bygpub.com/finance/InterestCalc.htm
Lets imagine a 25 year old joins the public sector today on 50k per annum and has the choice to opt out of the mandatory pension fund and invest/save the contributions elsewhere.
Over 40 years this gives a fund of 485,098 euro. This is not taking into account the fact that contributions will increase over the years and you would have to be seriously unlucky to only get a 3% interest rate in the long term. Therefore the final total is seriously underestimated. Lets assume as before wages and state pension double over 40 years.



On retirement his wages is 100k
Lump sum = 150k
State Pension = 24k if single (assuming its doubled)
Pension = 26k = (50k-24k)
over 13 years it would cost 26k x 13 = 338k
Total cost = 338k + 150k = 488k

If he's married:
Lump sum = 150k
State pension = around 44k (assuming its doubled)
Pension = 6k

over 13 years it would cost 6k x 13 years = 78k
Total cost = 150k + 78k = 228k

Where is the Govt spending money on this pension Jimmmy?

jimmmy

P. Breathnach wrote: »

Again I ask: what perks?

Job security is just one ; there are others of course. Ask any public servant who is now on a pension ( it does not just have to be a guard after taking early retirement ) is he / she wants that or not ?

jimmmy

grahamo wrote: »

Stick this amount into a simple compound interest calculator at a VERY low long term return of 3%.

you would have to be seriously unlucky to only get a 3% interest rate in the long term. Therefore the final total is seriously underestimated.

With ECB rates now closer to ONE per cent, and deflation happening, dream on in your cossetted little public sector land if you think you can achieve a net guaranteed interest rate of " a lot more than a 3% " which you talked about.

P. Breathnach

jimmmy wrote: »

Job security is just one ; there are others of course. ...

Job security (to the extent that it exists) is one of the attractive features of many public service jobs. But it does not fall into the normal meaning ascribed to "perk", which is usually used to refer to an extra benefit to an employee that has a monetary value -- something like the use of a company car.

You are throwing around "plus perks" as if the average public service employee enjoys rewards in addition to salary. That is not the way things are, and you are creating a false impression -- I suspect deliberately.

Mr. Presentable

jimmmy wrote: »

certainly. If you had ready the rest of this thread there would be no need to do so. Average public sector pay in this jurisdiction is 966 euro per week, plus perks, as has been widely reported and is well known. Even the c.s.o. has confirmed that.

jimmmy, in the post I responded to you say "typical". You may not exchange that for "average". I also think your rates quoted are in any event disengenuous, and your reference to "perks" (unspecified) spurious and misleading.

Gumbo

jimmmy wrote: »

And a lot of that money goes towards now paying the government and its employees and their big pensions. Not everything has doubled...eg look at car prices, petrol, oil, clothes, televisions, sports equipment, holidays, air fares ...the price of many things was never cheaper in real terms. eg the typical Irish public servant can easily afford a return trip to Australia and a few nights b+b thrown in for good measure for just one weeks gross salary. What other average public servant from any other country in the world is as well off / could afford that on one weeks gross salary?

if i gave you my weeks salary to go book a flight and B+B for a few days, will you book it for me please?
i would imagine not.

i just tryed here to book a flight for next week, and i got a value of €1,051 for one person flying - http://www.australianholidays.ie/online-booking/cheap-flights.asp

jimmmy wrote: »

With ECB rates now closer to ONE per cent, and deflation happening, dream on in your cossetted little public sector land if you think you can achieve a net guaranteed interest rate of " a lot more than a 3% " which you talked about.

heres one example of a 4.9% savings account :
http://www.firstactive.ie/savings/rsa/index.aspx