Public Service pension

jetski

Afternoon,

im in the public service... ive been here two years and am wondering whats the deal on pensions... im absolutly sick to the teeth of paying it every month and ive recently just got a pay increase and most of its swallowed up by the pension + leavy. ive contacted finance and they say its manditory but ive never signed or agreed to anything. has anyone had any luck in getting out of it. i dont want to pay it and have no intention of needing it.

Tks

leeroybrown

The salary scale point that your public service contract is located at will have a pension contribution included. When you took the job you effectively agreed to pay it even if it isn't explicitly mentioned in any contract. You won't be able to get out of it. As you've been there over two years you're entitled to a 'preserved pension' that will stay in the system for you even if you leave.

It's somewhat melodramatic to claim that most of your pay increase has been swallowed up by it. The standard public sector pension contributions are quite modest as a percentage of gross pay and the absolute maximum percentage of your pay increase that will be going to the pension levy is 10.5%. Both of these deductions also qualify for tax relief at the marginal rate. In fact, most of your pay increase is being swallowed up by income tax, the income levy and the health contribution not by your pension contributions or the pension levy.

Also, it's important that you remember that the 'pension levy' has very little to do with your pension. In reality it's effectively a pay cut that's been called a 'pension levy' due to the generous nature of public service pensions. The only situation where it's actually directly coupled to your pension is if you leave after less than two years in which case you can get it refunded as you don't qualify for a preserved pension.

Mrs OBumble

jetski wrote: »

i dont want to pay it and have no intention of needing it.

What are you planning on doing - dying before you get to old to be able to work? Having LOTS of kids so they can afford to look after you in your old age? Becoming a multi-millionaire (maybe with lotto, unlikely if you continue working for the man). Emigrating (but even so, you're still going to be getting old somewhere)? Working forever (hope your body and mind both hold out).

Firetrap

Mortgage repayments starting to bite?

No, you can't get out of paying it. I would also be very surprised if you didn't sign something when you started.

BroomBurner

What's with the sniping and personal questions?

Maybe the OP has a private pension fund, or is a millionaire, ya just never know. They were only asking one question.


Yeah, the pension payments are in the handbook/contract, as far as I can remember, OP. You could try a legal route, be a trailblazer.

Mrs OBumble

BroomBurner wrote: »

What's with the sniping and personal questions?

Maybe the OP has a private pension fund, or is a millionaire, ya just never know. They were only asking one question.

I really don't care what the answers are.

I was using the questions to point out that the vast majority of people DO need pension arrangements, even if (during their 20-somethings) they think they're bullet-proof and won't.

The OP was bitching about employment conditions that s/he should have been well aware of: as you say, it's in the handbook. And the OP has access to a gold-standard pension scheme that the rest of us would give our eye-teeth for (inflation indexed). I'm finding it a bit hard to be sympathetic!

BroomBurner

JustMary wrote: »

I really don't care what the answers are.

I was using the questions to point out that the vast majority of people DO need pension arrangements, even if (during their 20-somethings) they think they're bullet-proof and won't.

The OP was bitching about employment conditions that s/he should have been well aware of: as you say, it's in the handbook. And the OP has access to a gold-standard pension scheme that the rest of us would give our eye-teeth for (inflation indexed). I'm finding it a bit hard to be sympathetic!

I know this is off topic, but there is nothing but yourself stopping you from setting up a good pension plan and investing wisely. You can choose what kind of investments aswell, isn't that helpful?

The OP wanted questions about the possibility of getting out of the pension. I myself have issues with the pension, but they are moral ones.

Mrs OBumble

BroomBurner wrote: »

I know this is off topic, but there is nothing but yourself stopping you from setting up a good pension plan and investing wisely. You can choose what kind of investments aswell, isn't that helpful?

Agreed. But it's extremely unlikely that anyone will be able to invest wisely enough to give "government-guaranteed, inflation adjusted". Think about the last year or so: even the best-managed pension plans have lost value. But government pensions haven't: retired civil servants are still getting the same pensions.

censuspro

jetski wrote: »

im absolutly sick to the teeth of paying it every month and ive recently just got a pay increase and most of its swallowed up by the pension + leavy

What I find interesting is that public sector workers are getting pay increases while everyone else gets a pay cut.

chocgirl

I doubt the OP is getting a pay increase, more likely that it was an increment.

OP if you leave your job and go work for a private company you will get your pension contributions back then, just think of it as a good way of saving.:)

leeroybrown

chocgirl wrote: »

I doubt the OP is getting a pay increase, more likely that it was an increment.

Most likely it is an increment but ultimately it's a pay increase, even if it's a contractually defined one.

chocgirl wrote: »

OP if you leave your job and go work for a private company you will get your pension contributions back then, just think of it as a good way of saving.:)

I'm open to correction on this one but my understanding is that those who hold public service pensions lose their entitlement to a refund once they qualify for a preserved pension after two years of contribution. Those without an entitlement to a preserved pension can get a refund of their own employee's contributions (less income tax) and may also apply to have their pension levy contributions refunded.

Kristopherus

The OP must be getting an increment. Public Service salaries are frozen until end of 2010 at the earliest.

Riskymove

censuspro wrote: »

everyone else gets a pay cut.

everyone?

BroomBurner

Kristopherus wrote: »

The OP must be getting an increment. Public Service salaries are frozen until end of 2010 at the earliest.

That's the first I've heard of that. Could you please post your source?