Public sector workers willing to take pay cuts?

P. Breathnach

irish_bob wrote: »

anyone that believes private sector pensions are every bit as solid as those in the public sector has some sort of vested interest, either they have family who work for the state or some other connection

Or perhaps they are trying to be fair and reasonable.

kippy

irish_bob wrote: »

anyone that believes private sector pensions are every bit as solid as those in the public sector has some sort of vested interest, either they have family who work for the state or some other connection

Almost everyone has family who works for the state in some way, shape or form.

Private sector pensions are not in general "Guaranteed" and are subject to the whims of pensions managers as to what they are invested in. That is the main issue with them.
Over the long term, a well managed private sector pension will return similar or higher values if managed correctly.
There is a need for an overhaul of the pensions "industry" in this country however and the sooner that is done the better for those paying into one.

I also believe that that 1 billion "deficit" in the pensions fund will be well and truly demolished by the "pensions levy" and the overflow has been used to prop up the banks.

I would like to see the figures that woman in the independent report worked off of as I believe them to be flawed in many ways.

di2772

irish_bob wrote: »

anyone that believes private sector pensions are every bit as solid as those in the public sector has some sort of vested interest, either they have family who work for the state or some other connection

irish_Bob.

To show you that i am not a vested interest and i am looking at all sides, you can check this out yourself. But please post the results here for everyone to see. If i am wrong, you can prove it very simply. If im not, well you wont be able to prove i am will you. I'm even telling you how to prove me wrong if you want to try.

Yes, i do have 1 neice working in the public sector (motor tax office).
But i have about 15 immediate relatives working in the private sector including myself, my wife, brothers and sisters of us both and neices and nephews. So theres my cards on the table.

Do me a favour and run various sample figures of your own choosing on www.pensionsboard.ie ?

Pick several different salary ranges. Then compare the pensions that come out of your research to public sector pensions for similar, and post them here. And pensionsboard.ie is on the conservative side for growth too.

Also, find out about how pensions are invested. And then come back and tell us the what you found. ie how will they be invested 5 years, 10 years, 15 years from retirement. How save is your pension from market movements at each of those points in time. I think you'll find that you can choose the risky route, which is gambling with your pension, or the safe route.

Please post all that info here and SHOW people if im wrong, instead of random quips. They can all repeat your findings themselves or do their own research if they need to. Anyone can go to that website and do their own research without believing you or i at all.

On the plus side, people might even realize the importance of starting their pensions early. Imagine how good you'll feel then.

Drumpot

di2772 wrote: »

Defined contribution are not more risky at all.
Where are the pensions that have performed badly long term? As i said before, if anyone got caught by the recent downturn in the markets, and were near retirement in the last few years, they were just gamblers. They should not have allowed their pension to be exposed to the markets at that stage. Anyone not near retirement has nothing to worry about at all.

But by all means, let the PS opt out of the pension levy and set up their own pensions. They would be better off.

Have you run the figures yet? Which do you think is better after running them?

D.B.'s are a dieing beast because they usually cost the employer far too much to justify them . Im not really sure how you can try to suggest that D.C. is more favourable to employees.

Anybody invested in a D.C. pension arrangement will most likely be in a good level of exposure of equities until their final 10 years of the pension. So firstly most people outside of the last 10 years of retirement will of lost a huge portion of the value of their pension. (thats a majority of people in D.C.). I know the consensus funds lost on average of 45% and they are the medium risk funds!

If a person doesnt "gamble" in the earlier years of their pension they would struggle to get a decent return on their investment. Most quotes assume a steady compounded growth of 5% or 6%, which in many cases is not reflective of what they will get unless they happen to of timed everything correct with regards to getting out of riskier funds. .

Assuming you are retiring at 65, If you have a pension shortfall at age 55 you have a couple of options. One is to contribute more (how much you need to contribute may vary) and/or take a chance with your investment funds in the hope that fund performance helps close the gap.

Your also taking the personal factor out of this debate. If Ive been investing in a pension for 25 years and seen it tank 40% in the last year, I will instinctively put it into cash and gilts and will never recover my losses. This really blows all those kind of pensionsboard quotes away. A quote that assumes a compounded return over a 40 year term is unrealistic to say the least.

The public service has NONE of this worry. They know what they are getting, they dont need to worry about shortfalls (as the govt Subsidises this), they dont need to worry about what they will have at retirement (as they can calculate it out at any stage).

Seriously, I cant believe that this is actually being debated .

Somebody mentioned an "opt in" option to public servants. In principle I agree with the idea, but since we have to make these savings, I dont think we are in a position to start letting people decide what level of savings we will make. Theres still this whole "we cant do this" attitude as if we have loads of choices with regards to tightening the public purses.

di2772

Drumpot wrote: »

D.B.'s are a dieing beast because they usually cost the employer far too much to justify them . Im not really sure how you can try to suggest that D.C. is more favourable to employees.

Anybody invested in a D.C. pension arrangement will most likely be in a good level of exposure of equities until their final 10 years of the pension. So firstly most people outside of the last 10 years of retirement will of lost a huge portion of the value of their pension. (thats a majority of people in D.C.). I know the consensus funds lost on average of 45% and they are the medium risk funds!

If a person doesnt "gamble" in the earlier years of their pension they would struggle to get a decent return on their investment. Most quotes assume a steady compounded growth of 5% or 6%, which in many cases is not reflective of what they will get unless they happen to of timed everything correct with regards to getting out of riskier funds. .

Assuming you are retiring at 65, If you have a pension shortfall at age 55 you have a couple of options. One is to contribute more (how much you need to contribute may vary) and/or take a chance with your investment funds in the hope that fund performance helps close the gap.

Your also taking the personal factor out of this debate. If Ive been investing in a pension for 25 years and seen it tank 40% in the last year, I will instinctively put it into cash and gilts and will never recover my losses. This really blows all those kind of pensionsboard quotes away. A quote that assumes a compounded return over a 40 year term is unrealistic to say the least.

The public service has NONE of this worry. They know what they are getting, they dont need to worry about shortfalls (as the govt Subsidises this), they dont need to worry about what they will have at retirement (as they can calculate it out at any stage).

Seriously, I cant believe that this is actually being debated .

Somebody mentioned an "opt in" option to public servants. In principle I agree with the idea, but since we have to make these savings, I dont think we are in a position to start letting people decide what level of savings we will make. Theres still this whole "we cant do this" attitude as if we have loads of choices with regards to tightening the public purses.

If you read my post you'll see that i was talking about gambling when you are approaching retirement - when you should be consolidating.

Same challenge to you by the way.

Prove me wrong. Ive provided a site where anyone can get the figures. Run whatever figures you want in it. Show us all if a 40 year defined contribution pension doesnt beat a 40 year civil servant on the same salary.

Hint - I posted sample figures earlier in the thread, but they were just ignored.

Stark

Have a look at the assumptions:

Assumptions used: Investment return will be 5% per year before age 65 and 4% per year after age 65
Salary will increase at 3% per year
Pension will increase at 2% per year in retirement.
The State Pension will increase in line with salary increases.

My pension for one is worth 50% of what I put into it, so it definitely fails on the 5% return point. It might recover in value when the economy picks up but that's not guaranteed. Also an increase in earnings of 3% a year isn't something that's guaranteed in private sector jobs (with the exceptions of those that are part of the social parasite program).

di2772

Stark wrote: »

Have a look at the assumptions:



My pension for one is worth 50% of what I put into it, so it definitely fails on the 5% return point. It might recover in value when the economy picks up but that's not guaranteed. Also an increase in earnings of 3% a year isn't something that's guaranteed in private sector jobs (with the exceptions of those that are part of the social parasite program).

I think you are wrong on all counts here.
Pensions are long term, not short term. There will always be ups and downs short term. Go to Yahoo and see for yourself what happens over the long term. So what was your pension down by in March this year? I bet its up at least 30% since March. Sure someone who started their pension in March 2008 could say their pension is up 30%. It means nothing at this point, because long term is the way you should be looking at it.

And dont forget that you get the state pension too. And tax relief on your pension contributions.

5% per year is easily achievable. In fact i think its a bit on the pessimistic side.

3% a year is also a bit pessimistic for your salary expectations over the long term. Look at your salary when you were 20 and compare it to now. And anyway, anyone who cant increases their salary by an average of 3% a year over their working life, needs more than a pension. They probably need to be put down tbh.

dearg lady

Interesting letter in Irish times today suggests there hasn't been as many wage cuts in general as we might think. Letter on 'pay squeeze'.
Will look for the surveys later, don't know if they're available online though..


http://www.irishtimes.com/letters/index.html#1224254549583

FGR

What I'd like to know is - What size of paycut should the PS take to make those who are anti PS happy?

By the looks of things a 50% pay cut with a loss of pension wouldn't even do!

Which, for the record, is not the most fair of things. It's scapegoating and that's not satisfactory.

Sure; I agree that many are earning far too much - but those on the front line are squeezed with the Pension levy as it is. Couples in the PS, in particular, are already down a fair amount. I know many people in the private sector who haven't had a pay freeze or a cut.

Why the isolation of the PS? The Government are leading the public very easily..which is disappointing considering how the public want them out.

thebman

ForegoneReality wrote: »

What I'd like to know is - What size of paycut should the PS take to make those who are anti PS happy?

By the looks of things a 50% pay cut with a loss of pension wouldn't even do!

Which, for the record, is not the most fair of things. It's scapegoating and that's not satisfactory.

Sure; I agree that many are earning far too much - but those on the front line are squeezed with the Pension levy as it is. Couples in the PS, in particular, are already down a fair amount. I know many people in the private sector who haven't had a pay freeze or a cut.

Why the isolation of the PS? The Government are leading the public very easily..which is disappointing considering how the public want them out.

In fairness, most people aren't asking for that size of a cut. There is no isolation of PS really either.

You have the government as an employer losing more than 20 billion a year. Of course cuts are necessary in both services and wages.

Same as any employer losing money at the moment will have to scale back the services they offer if there isn't demand and let people go or put them on part time.

For the record, many people who have had a pay cut may not want to admit to it. Likewise the article in the Irish Times is a user comment not really any hard evidence in there.

I know many people who have been let go and have had wages reduced and all have degrees and were in job roles you'd expect for those degrees.

The live register figures speak for themselves. Many employers will let one person go before reducing wages as it will be perceived that if you reduce wages, employee's won't work as hard. So if any employer can avoid a wage cut then they will but many can't or will have to do so shortly.

Anyway if a private business is making enough to pay its workers what it currently is, why should they cut wages to make the public service happy??

It doesn't make any sense, the only reason people are calling for public sector wage reductions (really other than people who will call for them no matter what) is because the government is losing 20 billion a year and there is no sign that it will improve within a few years.

The need for cuts is quite logical unlike the emotional outbursts attempted in defense of the current wage bill for the public sector which is obviously unsustainable. The reality is the government binged spent and now we all have to pay the price for that with worse services and lower pay. PS are employed by the government so they will feel it first and most obviously.

Just think of the companies that won't get contracts renewed in private sector, those people are going to end up being let go or having wages reduced too

No way around it. Nobody wants other people to get a wage cut, a wage cut is a necessity.

niffle

what is everyones view on the CEO's in 48 semi state bodies , many of whom did not take a voluntary pay cut. the head of the NTMA earned over 1 million euro last year. In my humble opinion the cuts need to start at the top and only then will the pain be seen as fair. we cannot afford to pay such vast sums to these CEO's . we also have a breed of politicians who refuse to be accountable for vast expenses. why not attack these groups instead of the ordinary PS who works for average wage!

kippy

niffle wrote: »

what is everyones view on the CEO's in 48 semi state bodies , many of whom did not take a voluntary pay cut. the head of the NTMA earned over 1 million euro last year. In my humble opinion the cuts need to start at the top and only then will the pain be seen as fair. we cannot afford to pay such vast sums to these CEO's . we also have a breed of politicians who refuse to be accountable for vast expenses. why not attack these groups instead of the ordinary PS who works for average wage!

Because, we wouldn't really save anything close to 20 billion if we did that.
I reckon, even if we cut the Dail in Half, Disbanded the Seanad and cut the salaries of all these ceo's by 75 percent, wed still only save a couple of hundred million per annum.
To shave 20 Billion of the wage bill demands cuts all over the shot, not JUST at the top.
I aint standing up for anyone, just making the point.

irish_bob

ForegoneReality wrote: »

What I'd like to know is - What size of paycut should the PS take to make those who are anti PS happy?

By the looks of things a 50% pay cut with a loss of pension wouldn't even do!

Which, for the record, is not the most fair of things. It's scapegoating and that's not satisfactory.

Sure; I agree that many are earning far too much - but those on the front line are squeezed with the Pension levy as it is. Couples in the PS, in particular, are already down a fair amount. I know many people in the private sector who haven't had a pay freeze or a cut.

Why the isolation of the PS? The Government are leading the public very easily..which is disappointing considering how the public want them out.

i would like to see a 35% cut in wages for consultants , judges and politicians , a 25% cut over two years for teachers nurses and guards and a 10% pay cut for clerical officers who are still considerably better paid than secretary and recptionists in the private sector

that would still put theese professions ahead of countries of equal wealth to us


ps , i would also like to see the dole and the old age pension reduced by around 25%

Trishis

niffle wrote: »

what is everyones view on the CEO's in 48 semi state bodies , many of whom did not take a voluntary pay cut. the head of the NTMA earned over 1 million euro last year. In my humble opinion the cuts need to start at the top and only then will the pain be seen as fair. we cannot afford to pay such vast sums to these CEO's . we also have a breed of politicians who refuse to be accountable for vast expenses. why not attack these groups instead of the ordinary PS who works for average wage!

EXACTLY! They do need to put their hands in their pockets first! I take the point that it wont be enough money, but it'll be a start...why should the low paid be hit again while the top paid give nothing

Trishis

irish_bob wrote: »

i would like to see a 35% cut in wages for consultants , judges and politicians , a 25% cut over two years for teachers nurses and guards and a 10% pay cut for clerical officers who are still considerably better paid than secretary and recptionists in the private sector

that would still put theese professions ahead of countries of equal wealth to us


ps , i would also like to see the dole and the old age pension reduced by around 25%

The role and duties of a clerical officer and that of a receptionist/secretary are totally different....some clerical officers work very hard and have a lot of pressure and dealines....

optocynic

Trishis wrote: »

The role and duties of a clerical officer and that of a receptionist/secretary are totally different....some clerical officers work very hard and have a lot of pressure and dealines....

And the people in the private sector, with shrinking markets, no pensions and higher standards expected (evaluations etc) don't have pressure.. and deadlines???

Pish!!!

Trishis

optocynic wrote: »

And the people in the private sector, with shrinking markets, no pensions and higher standards expected (evaluations etc) don't have pressure???

Pish!!!

Higher standards expected? are you under some illusion that clerical officers dont work hard, or dont have to?
Do you think the civil service in the same as it was in the 70's or something?

My point was that you cannot compar a clerical officers job i the civil service with a secretary's job in the private sector as a celrical officers job is very varied from Department to Department and they work extremely hard in some cases. They are not secretaries and therefore why should their salaries be compared....

It is not the low paid in the PS that have casused shrinking markets in the private sector.

Riskymove

kippy wrote: »

Because, we wouldn't really save anything close to 20 billion if we did that........To shave 20 Billion of the wage bill demands cuts all over the shot, not JUST at the top.

quote of the week on this thread.....the entire public wage bill is around €20bn

optocynic

Trishis wrote: »

It is not the low paid in the PS that have casused shrinking markets in the private sector.

No one said it was.
But the money has to come from somewhere... and the time for blame-storming is over, we know who is to blame.. but they are not able to foot the whole bill.

And, as a private sector worker, who 'consumes' public services... I am not happy with the standard/speed of the public sector on a whole.

Also, what is wrong with the revisions of benchmarking, using the same comparisons that gave the public sector workers so much previously? If it was fair then... it is fair now!

kippy

Riskymove wrote: »

quote of the week on this thread.....the entire public wage bill is around €20bn

Are you being sarcastic?

I know the fallacies in the comment, I was just making a point.
Of course the wage bill wont be cut by 20 billion , you'd have a lot of people working for nothing if that were the case. Just highlighting how much money has to be saved (approximately 20 billion difference between income and expenditure) and how little difference cutting the salaries of those top paid would make on its own.

Dannyboy83

People need to get past the 'attack' mentality.

The lowly paid Public Service worker is not responsibile for the current drama, nor is the lowly paid private sector worker.

The point is, the private sector pays the public sectors wage.
And currently, those wages are too high, they need to be reduced as our expenditure exceeds our income.
Past that, nobody is attacking anyone.

Your government are not willing to making pay reform where it is demanded at the top (i.e. grossly over paid politicans, judges, PS managers, consultants).

So instead, pay reform will have to be made where people can't do anything about it, the bottom sectors of the PS etc.

Sucks, but the cuts have to come from somewhere.
The lowly paid PS workers are taking one for the PS team.

redhugh

Trix wrote: »

I work in the public sector and i pay taxes. don't we all?

No actually you dont pay tax, its factored into yoru salary but in essence you dont pay it, private sector workers pay tax so as to provide services & pay the public sector, so in reality the public sector just consume collected taxes. To say that public sector workers pay tax is a bit of a phantom statment and just results in fudged up figures by the collector general, it defeats the cannons of taxation

optocynic

Dannyboy83 wrote: »

People need to get past the 'attack' mentality.

The lowly paid Public Service worker is not responsibile for the current drama, nor is the lowly paid private sector worker.

The point is, the private sector pays the public sectors wage.
And currently, those wages are too high, they need to be reduced as our expenditure exceeds our income.
Past that, nobody is attacking anyone.

Your government are not willing to making pay reform where it is demanded at the top (i.e. grossly over paid politicans, judges, PS managers, consultants).

So instead, pay reform will have to be made where people can't do anything about it, the bottom sectors of the PS etc.

Sucks, but the cuts have to come from somewhere.
The lowly paid PS workers are taking one for the PS team.

Harsh but true... we all wish the current government had the cajones required to take a bite out of their cronies at the upper scale as well as benchmarking the whole Public Sector correctly... but, alas, cowards they remain!

thebman

niffle wrote: »

what is everyones view on the CEO's in 48 semi state bodies , many of whom did not take a voluntary pay cut. the head of the NTMA earned over 1 million euro last year. In my humble opinion the cuts need to start at the top and only then will the pain be seen as fair. we cannot afford to pay such vast sums to these CEO's . we also have a breed of politicians who refuse to be accountable for vast expenses. why not attack these groups instead of the ordinary PS who works for average wage!

eh we aren't going to decide who gets hit though, the politicians are so go ask them to cut their pay instead of yours.

No point asking me to cut the guy at the tops wages.

Riskymove

Are you being sarcastic?

no

I know the fallacies in the comment, I was just making a point.

you said "To shave 20 Billion of the wage bill demands cuts all over the shot, not JUST at the top"....

if you knew the figures were wrong, why say that?
why add to the ignorance?

Just highlighting how much money has to be saved (approximately 20 billion difference between income and expenditure) and how little difference cutting the salaries of those top paid would make on its own

fair enough, I think that's clear but not a reason not to cut pay at the top. If for no other reason than leadership for those at the bottom who will be also asked to take a cut

MrMicra

Trishis wrote: »

Higher standards expected? are you under some illusion that clerical officers dont work hard, or dont have to?
Do you think the civil service in the same as it was in the 70's or something?

My point was that you cannot compar a clerical officers job i the civil service with a secretary's job in the private sector as a celrical officers job is very varied from Department to Department and they work extremely hard in some cases. They are not secretaries and therefore why should their salaries be compared....

It is not the low paid in the PS that have casused shrinking markets in the private sector.

That is an extraordinarily arrogant thing to say. It may or may not be the case that some clerical workers are hardworking. I can assure you that secretary's and PAs in the private sector work hard.

I would suggest that in the 1970s the natural level of ability of a clerical worker or anyone outside the higher civil service was much higher than it is now. In the public sector people with ability have a great deal of opportunity for personal improvement in a way that is directed at their career. Those who remain clerical officers for a long time it is reasonable therefore to assume are lazy no marks.

IrishBob your attitude is tokenistic.
The public sector payroll has to be halved. I would cut all salaries by 50% and all pensions by 60%. This will not in fact cut the wage bill in half because it is not reasonable for a civil service pensioner to have his pension reduced to the level of the means tested pension. There is also an obvious impact on the tax take of the state.

However the bulk of the expenditure on salaries is to people who are very well paid for the work they do but do not earn huge salaries. There may be a moral argument in favour of cutting salaries at the top but the economic argument is in favour of cutting those at the bottom.

50% pay cut for all public servants. They've got us into this mess.
Brian Cowen, Bertie Ahern and Patrick Neary are all public servants.

MrMicra

optocynic wrote: »

Also, what is wrong with the revisions of benchmarking, using the same comparisons that gave the public sector workers so much previously? If it was fair then... it is fair now!

We need a third tranche of benchmarking to cut public service wages. I generally vote labour, but will be voting Fine Gael at the next election as I believe that only Fine Gael will have the stomach to cut public sector salaries.

dresden8

redhugh wrote: »

No actually you dont pay tax, its factored into yoru salary but in essence you dont pay it, private sector workers pay tax so as to provide services & pay the public sector, so in reality the public sector just consume collected taxes. To say that public sector workers pay tax is a bit of a phantom statment and just results in fudged up figures by the collector general, it defeats the cannons of taxation

If we don't pay taxes, we just get less money into our hands, you must accept the the pension levy is in fact a pay cut.

Thanks, that's that one sorted.

MrMicra

dresden8 wrote: »

If we don't pay taxes, we just get less money into our hands, you must accept the the pension levy is in fact a pay cut.

Thanks, that's that one sorted.

I accept that it is a pay cut, now all you need is another 40% off your wages and the country can start getting back to normal. Do you accept that my wages are my net pay but a public servants is his gross pay.

amacca

MrMicra wrote: »

IrishBob your attitude is tokenistic.
The public sector payroll has to be halved. I would cut all salaries by 50% and all pensions by 60%. This will not in fact cut the wage bill in half because it is not reasonable for a civil service pensioner to have his pension reduced to the level of the means tested pension. There is also an obvious impact on the tax take of the state.

However the bulk of the expenditure on salaries is to people who are very well paid for the work they do but do not earn huge salaries. There may be a moral argument in favour of cutting salaries at the top but the economic argument is in favour of cutting those at the bottom.

50% pay cut for all public servants. They've got us into this mess.

And your attitude sir is comedic! :rolleyes:
.
.
.
go on, have a little re-read of what you wrote.
.
.
.
for your next gag, you should come back and re-post the above a couple of times and see if you can get Jimmmy to thank you when he returns from his self imposed exile.


on a related note, yes the economic argument is in favour of cutting those in the middle and the bottom (that much is obvious) but does that mean you just leave out the ones at the top? if you were fair minded and reasonable would'nt you include that the ones at the top and dont you think they should take cuts and proportionally bigger ones?

I can think of a couple of non-moral arguments for such an arrangement btw

1) It could possibly be easier to implement cuts if they are implemented across the board.

2) It may yield more money than you think.


furthermore

I think the percentage cuts you consider appropriate to be too large.

I think your statement that public servants as a whole got us into this mess is incorrect.

IMO,Peoples greed, shortsightedness, laziness and just plain stupidity got us into this mess, pretty much the same factors that have gotten large groups of people into messes throughout history, Neither public sector nor private sector comes out of this one smelling of roses..... but of course if you insist on blaming it on one section of society because thats easier and it gives you a group of people you can scapegoat then I suppose who am I to interfere with such a nice neat solution that helps you sleep at night and not have to think too hard.

P.S. On the offchance that you may be in need of some bedtime reading, might I be so bold as to recommend

"Extraordinary popular delusions and the madness of crowds" by Charles Mackay,

that is of course if you have not already read it.

I was amazed at the parallels between almost every situation described in that book and what went on in this country over the past 10/15 years. Although most of the events described happened hundreds of years ago the prevalence of the aforementioned greed, shortsightedness, laziness and just plain stupidity in every event described was uncanny.