For those interested in the Public / Private sector wage debate

Long Onion

Jimmmy, what are you asking exactly, look at the quotes from yourself and the answers below

jimmmy wrote: »

I actually asked "What group from the private sector can retire after only 30 years service ? Well ? ?????????"

Riskymove wrote: »

anybody can retire whenever they decide to

Long Onion wrote: »

As already stated by another poster, you can retire whenever the hell you like. I presumed that you meant on full pension as to do otherwise would mean that the question was really, really stupid - oh well ...

Long Onion wrote: »

A 35 year old paying any tax at the 41% marginal rate would have a €1,000,000 pension pot (assuming growth of 6% p.a. which is below the average) by the age of 65 for a net monthly contribution of €488.99 per month. Hardly ultra high flier stuff there Jimmmy.

jimmmy wrote: »

I actually asked "What group from the private sector can retire after only 30 years service ? Well ? ?????????" Your answer is not helpful.

jimmmy wrote: »

But the question is "What group from the private sector can retire after only 30 years service ? " ( like the Gardai do, who earn an average of 60k a year each before they retire ) ...what other group from society can retire aged 50 , after only 30 years service , with a pension pot of over a million?

jimmmy wrote: »

"What group from the private sector can retire after only 30 years service ?

jimmmy wrote: »

what percentage do you think can retire after only 30 years working ( eg at age 50 ), with a state guaranteed pension pot worth over a million ?

jimmmy wrote: »

What group of employees from the private sector could do that ?

Are you asking:

1) What group in the private sector can retire after 30 years service full stop. If you are, the answer is all groups, individuals can retire whenever the hell the feel like it.

or;

2) What group in the private sector can retire after 30 years with a pension pot of €1,000,000 euro in which case the answer is anyone who funds their pension sufficiently.

What are you having the difficulty in grasping here?

jimmmy

Riskymove wrote: »

it has a striaght answer that we all know as you have phrased it ina loaded fashion...no private sector worker gets a state pension (outside of PRSI related welfare)..as we all know

I know that, but thats not the question I asked : "out of the 1.8million private sector workers, what percentage do you think can retire after only 30 years working ( eg at age 50 ), with a state guaranteed pension pot worth over a million ?"

Just call it a pension pot instead of a state guaranteed pension pot, if that makes it easier for you. ( although we all know which type would be better to have for the individuals lucky enough to have one )

As I said, All guards can retire after 30 years service eg at age 50 if they joined at age 20, a not unreasonable age to suggest is the average Garda joining age....some may have been younger, some a bit older. Their pension pot is worth over a million. What group of employees from the private sector could do that ?

jimmmy

Long Onion wrote: »

2) What group in the private sector can retire after 30 years with a pension pot of €1,000,000 euro in which case the answer is anyone who funds their pension sufficiently.

Given the pension pot of the average Garda who takes early retirement ( say this year, in 2009 ) aged 50 is over a million, do you not think something is askew when this figure exceeds the total gross income of the average industrial worker over the past 30 years all added up ?

As Shakespeare said, something is rotten in the state of Denmark.

Eddie Hobbs was right about the public service pensions.

dearg lady

These constant debates and repetition are painful. Jimmmy you're like a dog with a bone over the pensions, did you have such an issue 5 years ago? I don't want to get involved in this thread which is a repeat of the same thread that's been posted constantly lately. Fair play to OP for trying to get some genuine reasonable debate on the issue, but unfortunately it has gone the same way as every thread before.

Long Onion

jimmmy wrote: »

I know that, but thats not the question I asked : "out of the 1.8million private sector workers, what percentage do you think can retire after only 30 years working ( eg at age 50 ), with a state guaranteed pension pot worth over a million ?"

This is not the question you asked at all. As you can well see from my post above. You are playing semantics and at the same time changing the question every time.

jimmmy

Long Onion wrote: »

This is not the question you asked at all.

It is actually. See my post number 85. "out of the 1.8million private sector workers, what percentage do you think can retire after only 30 years working ( eg at age 50 ), with a state guaranteed pension pot worth over a million ? ".
Seems like exactly the same question and wording to me .lol

I suppose its pointless expecting an answer from a public sector person. Or indeed to my question below which remains unanswered : "All guards can retire after 30 years service eg at age 50 if they joined at age 20, a not unreasonable age to suggest is the average Garda joining age....some may have been younger, some a bit older. Their pension pot is worth over a million. What group of employees from the private sector could do that ?"

SafeSurfer

My opinion is that both the public sector and the private sector and indeed welfare recipients are paid too much.

One can compare the Irish public sector with those of France, Norway, UK etc and they are paid more. If you compare a shop worker, a carpenter, a dentist, a solicitor, a plumber, a doctor in Ireland they are all paid more than their counterparts in almost every other EU country.

We need to reduce wages and welfare across the board in Irish society. Then prices would fall too and instead of a vicious circle of rising wages chasing rising prices we could have a virtuous circle of falling prices following falling wages.

This would prevent the IMF from taking our economy in hand and doling out the hard medicine.

The only cost that remains variable is mortgage repayments, but if all other costs fall in proportion to a fall in wages then your mortgage payments remain constant.

The Public Vs Private debate is a distraction. That old Charlie Haughey clip which can be seen in the Aviva ad is as relevent today as it was in the 80's.
"As a society we are living way beyond our means".

Diarmuid

Long Onion wrote: »

2) What group in the private sector can retire after 30 years with a pension pot of €1,000,000 euro in which case the answer is anyone who funds their pension sufficiently.

Long Onion. I queried your figures earlier but got no reply. When you say fund your pension sufficiently, I think the figures you gave are very optimistic.

The CAGR of the S&P500 since 1950 is 6.8%. No pension fund manager will invest in 100% equities so in reality you are looking optimistically at 5.5% return on your investment. To retire in 30 years with €1m @ 5.5% you would need to save €275/week.

So, yes, anyone who funds their pension sufficiently can retire with €1m. However not many are in a position to put away €1100 per month to get there.

Long Onion

Diarmuid wrote: »

Long Onion. I queried your figures earlier but got no reply. When you say fund your pension sufficiently, I think the figures you gave are very optimistic.

The CAGR of the S&P500 since 1950 is 6.8%. No pension fund manager will invest in 100% equities so in reality you are looking optimistically at 5.5% return on your investment. To retire in 30 years with €1m @ 5.5% you would need to save €275/week.

So, yes, anyone who funds their pension sufficiently can retire with €1m. However not many are in a position to put away €1100 per month to get there.

But you have adjusted for inflation, as we are looking at a flat fund of €1,000,000 i have not adjusted for inflation, the S&P CAGR over this period would be 10.88%. As for the asset split, I know many, many individuals who have invested in equity only funds through their pensions (not wise in my own mind but each to their own), they have fared particularly badly over the past 2 years but made huge gains prior to this many sold out and bamked the majority of the gains sat in cash and are now dipping their toes back in - mostly in Asia. Don't forget that the contribution figure quoted was the net cost to the individual after tax relief and not the gross payment each month into the fund.

The calculations were performed on a revenue approved calculator which is provided by a registered pension provider. Hope this helps (sorry about not replying earlier, my connection went down and then I just forgot)

jimmmy

Diarmuid wrote: »

Long Onion. I queried your figures earlier but got no reply. When you say fund your pension sufficiently, I think the figures you gave are very optimistic.

The CAGR of the S&P500 since 1950 is 6.8%. No pension fund manager will invest in 100% equities so in reality you are looking optimistically at 5.5% return on your investment. To retire in 30 years with €1m @ 5.5% you would need to save €275/week.

So, yes, anyone who funds their pension sufficiently can retire with €1m. However not many are in a position to put away €1100 per month to get there.

1100 as month would have been difficult to save 28 / 29 / 30 years ago ...those who did and whose pension funds did indeed grow at 5.5% ( many did not ) 9+may indeed have a million now, which is almost as much as the average pension pot of a Garda retiring now who left school / started work in 1979. I know someone who invested a lump sum in Irish life in the 1980's and its not worth that much more now, so 5.5% is a wildly optimistic return to expect in my opinion, after all charges and commissions are taken from the pension. I know some pensions now after ten years are worth less than what was paid in to them. So even if the Garda had paid 1100 each and every month over the past 30 years, he would have paid in 396,000 in total....a long way short of the 1 million plus his pension pot is now worth, courtesy of the taxpayer .

Tipp Man

Long Onion wrote: »

But you have adjusted for inflation, as we are looking at a flat fund of €1,000,000 i have not adjusted for inflation,

Surely any debate on pensions, and in particular when talking about pension figures has to include inflation, otherwise the numbers are meaningless??

Long Onion

jimmmy wrote: »

It is actually. See my post number 85. "out of the 1.8million private sector workers, what percentage do you think can retire after only 30 years working ( eg at age 50 ), with a state guaranteed pension pot worth over a million ? ".
Seems like exactly the same question and wording to me .lol

This is the question you asked after you asked a completely different one in posts 38,46,70 and 76. When you were told the answer time after time, you then changed to the question in post 85 and are now starting all over again.

jimmmy wrote: »

I suppose its pointless expecting an answer from a public sector person.

I am a private sector worker - always have been

jimmmy wrote: »

Or indeed to my question below which remains unanswered : "All guards can retire after 30 years service eg at age 50 if they joined at age 20, a not unreasonable age to suggest is the average Garda joining age....some may have been younger, some a bit older. Their pension pot is worth over a million. What group of employees from the private sector could do that ?"

Pilots, Senior managers in the banking industry, senior managers in MNC's, successful company directors, barristers, solicitors, accountants, actuaries, GP's (even those who will not see medical card holders), pharmacists ... should I go on?

Long Onion

Tipp Man wrote: »

Surely any debate on pensions, and in particular when talking about pension figures has to include inflation, otherwise the numbers are meaningless??

In the real world, i would agree with you totally, especially when it comes to planning retirement. For the point in hand though, I was merely giving a specific answer to a specific question.

jimmmy

Long Onion wrote: »

In the real world, i would agree with you totally, especially when it comes to planning retirement. For the point in hand though, I was merely giving a specific answer to a specific question.

You must take inflation in to account though. As I said, 1100 as month would have been difficult to save 28 / 29 / 30 years ago , and even if a Garda left school in 1979 and had paid 1100 each and every month over the past 30 years in to a pension fund, he would have paid in only 396,000 in total....a long way short of the 1 million plus his pension pot is now worth, courtesy of the taxpayer

Diarmuid

Long Onion wrote: »

But you have adjusted for inflation, as we are looking at a flat fund of €1,000,000 i have not adjusted for inflation, the S&P CAGR over this period would be 10.88%.

But you have to adjust for inflation. When we talk about retiring with a pot of €1m it only makes sense to talk about €1m in 2009€ not 2039€. (to understand why imagine this extreme scenario. I tell you today that in 30 years I will give you €1m. 30 years time after a huge bout of inflation, €1m is the price of a pint. Now that promise of €1m doesn't amount to much does it? However if I promise to give you €1m inflation adjust in 30 years that's a very different story.)

Sure you can take non-inflation adjusted figures but then you have to adjust the final pot to be equivalent to €1m in 2009€. That's why you should (it is easier to) use inflation adjusted figures.

EDIT: I just saw the other replies pointing out the same thing. It seems like a small thing but makes a huge difference to the calculations

Long Onion wrote: »

As for the asset split, I know many, many individuals who have invested in equity only funds through their pensions (not wise in my own mind but each to their own), they have fared particularly badly over the past 2 years but made huge gains prior to this many sold out and bamked the majority of the gains sat in cash and are now dipping their toes back in - mostly in Asia.

That is why a) you would not invest 100% in equities and b) we look at the performance of equities over 60 years to get an idea of the long term expected returns

Long Onion wrote: »

Don't forget that the contribution figure quoted was the net cost to the individual after tax relief and not the gross payment each month into the fund.

That's true however I don't know how long this scheme will last with the bearded breathern complaining about this tax break. But point taken.

Diarmuid

Long Onion wrote: »

In the real world, i would agree with you totally, especially when it comes to planning retirement. For the point in hand though, I was merely giving a specific answer to a specific question.

But it had huge implications for your calculations. weekly contributions of €122 vs €275

Long Onion

I agree with you that if you were actually planning your own pension, you must take future value into account, but arguing with Jimmmy, king of the pedants dictates that you must answer only the question posed and no other question.

Then again, I see that he has now changed tack and is arguing for inflation to be factored in as it no doubt strenghtens his position for the point in hand (though it undermines the raises in salaries in the public sector over the last 30 years - he will no doubt ignore this)

At the end of the day, the problem with figures is that you can always find the one that suits you if you look hard enough ...

jimmmy

Long Onion wrote: »

Pilots, Senior managers in the banking industry, senior managers in MNC's, successful company directors, barristers, solicitors, accountants, actuaries, GP's (even those who will not see medical card holders), pharmacists ... should I go on?

No, not all of the above elite group ( even though they are more highly educated ... and on average, more intelligent than their Gardai class mates of 30 years ago ! ) do not retire after 30 years with a pension pot worth over a million. A few lucky ones, maybe, or maybe a few who are exceptionally talented and/or who have worked very long hours, but most bankers ( ie people who work in the banks ) , successful company directors ( any who can keep their head above water these days is successful, never mind ones who dream of a p.s. lifestyle ), solicitors ( some have been laid off lately and would laugh at you if you said they could retire at 50 ) etc, can not and do not retire after only 30 years service with a pension lot equal to or exceeding that of a Guard . While I respect the Gardai, its not as if Guards ( in general ) were or are the calibre of rocket scientists or brain surgeons either .
Until the excesses of the p.s. can be identified and admitted, there is little prospect of universal acceptance of the public pay + pensions cuts which are long overdue but coming.

Long Onion

Diarmuid wrote: »

But it had huge implications for your calculations. weekly contributions of €122 vs €275

I disagree, I was merely saying that a net contribution of €488.99 per month would yield a fund of €1,000,000 assuming growth of 6% per annum, this is true regardless of inflation no?

Long Onion

jimmmy wrote: »

No, not all of the above elite group do not retire after 30 years with a pension pot worth over a million.

Your use of the double negative contradicts your point - I too can do semantics.

jimmmy

why assume growth which has not being achieved ( do not believe everything the insurance salesmen will tell you about projected growth etc. It took 27 years for the Dow to recover after 1929. Japanese real estate and shares are still much less than they were 20 years ago. And those are examples of heavily industrialised, innovative, exporting nations in those eras ) .

jimmmy

Long Onion wrote: »

Your use of the double negative contradicts your point - I too can do semantics.

typo...apologies ...I meant
"No, not all of the above elite group retire after 30 years with a pension pot worth over a million."

Diarmuid

Long Onion wrote: »

I disagree, I was merely saying that a net contribution of €488.99 per month would yield a fund of €1,000,000 assuming growth of 6% per annum, this is true regardless of inflation no?

eh no. That would yield € 491,197.81 (=fv(0.06/12,30*12,-488.99,0)

but I understand what you are saying.

P. Breathnach

jimmmy wrote: »

... Garda ... 1 million ... pension pot...

I was tempted to do a search to find out how many posts jimmmy has made with those terms in them, but the search function is down. I suspect that the number is quite large.

Long Onion

Diarmuid wrote: »

eh no. That would yield € 491,197.81 (=fv(0.06/12,30*12,-488.99,0)

but I understand what you are saying.

Have you forgot the net/gross thing again?

Long Onion

P. Breathnach wrote: »

I was tempted to do a search to find out how many posts jimmmy has made with those terms in them, but the search function is down. I suspect that the number is quite large.

1 million?

Diarmuid

Long Onion wrote: »

Have you forgot the net/gross thing again?

now who's playing with semantics?

You are confusing the issue as it would depend on the marginal tax rate of the person making the contributions and there are limits on the AVCs you can make.

jimmmy

Long Onion wrote: »

1 million?

I guess that size pension pot may not seem that big to you, but to most people in the country - certainly most of the 1,800,000 in the private sector - it it something they can only dream of. The reality is that much of the € 25,000,000,000.00 or so the country is borrowing is going on public expenditure such as that. That is why the EC has told our govt to cut spending / borrowing by 4,000,000,000.00 in the next budget alone.

Long Onion

Diarmuid wrote: »

now who's playing with semantics?

You are confusing the issue as it would depend on the marginal tax rate of the person making the contributions and there are limits on the AVCs you can make.

I wasn't being sarcastic there by the way. I had stated from the outset that the example was for a higher rate tax payer paying €488.99 net so the gross amount hitting the fund would be €828.80 per month. As the example was for a private sector worker, there is no limit on the AVC element.

Diarmuid

Long Onion wrote: »

As the example was for a private sector worker, there is no limit on the AVC element.

yes there are
(and the original bill)