For those interested in the Public / Private sector wage debate

Riskymove

jimmmy wrote: »

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.

public servants generally do not have an individual "pension pot" in any event

That is why the EC has told our govt to cut spending / borrowing by 4,000,000,000.00 in the next budget alone.

nope...the Government put forward that plan to the EU who approved it

its now looking more like a planned €6bn reduction

Long Onion

Diarmuid wrote: »

yes there are
(and the original bill)

But you are referring to an occupational pension scheme and not a personal pension plan no?

lmimmfn

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?

I would hardly consider a guard in the same league as any of those

Diarmuid

Long Onion wrote: »

But you are referring to an occupational pension scheme and not a personal pension plan no?

I to admit I don't know the difference. Can you enlighten me? Google isn't cutting it on this one.

jimmmy

Riskymove wrote: »

public servants generally do not have an individual "pension pot" in any event

Call it what you want but it amounts to the same thing. Its the value of the pension. A guard ( or indeed other public servant retiring ) does indeed have a pension : the value of this is calculated by the payout, likely life expectancy etc. If the term "pension pot" as applied to public servants is good enough for Eddie Hobbs, its good enough for me. Eddie Hobbs said a guard would need to be paying 48% of his salary in to his pension if he was to pay the full economic cost. ( RTE TV, last Monday night week ).

Riskymove wrote: »

nope...the Government put forward that plan to the EU who approved it

its now looking more like a planned €6bn reduction

the Government put forward that plan in order to be able to continue to keep borrowing from the EC for the forseeable future. Because the difference between income + expenditure is growing all the time for the govt, yet it should look at a figure greater than the 4 billion.

Long Onion

Diarmuid wrote: »

I to admit I don't know the difference. Can you enlighten me? Google isn't cutting it on this one.

The revenue impose limits on the proportion of ones salary that can be contributed to an occupational pension scheme and be eligible for relief at the marginal rate. The percentage increases according to the age of the contributor. You can contribute more than this if you like, but the excess witll not accrue relief.

A personal pension plan can be taken out by anyone with a non-pensionable source of income - so someone who works with an employer who does not offer an occupational scheme or someone who has a second source of income (e.g. a farmer who also works as a PAYE worker).

Whilst personal plans are strictly speaking subject to the same limits, there is a whole rage of ways that these can be by-passed, taking into account missed years, years that were underfunded etc. To throw more into the mix, company directors can set up directors pensions with wildy generous limits (there is another thread recently opened on this) the 'company' can pay up to 1000% of their annual salary into a pension fund and use pre-tax money to do so - thus the director pays no income tax on this money. The fund can accumulate a maximum of €5.4 million (indexed maximum) there are old rules and new rules in existence allowing funding for tax free cash and max funding, there are ARF's AMRF's etc etc so I'm not surprised that Google isn't cutting it.

The long and the short of it is that pensions are hard to fathom to say the least which is probably why there are so many ways of accumulating funds and circumventing revenue limits.

gurramok

Riskymove wrote: »

nope...the Government put forward that plan to the EU who approved it

its now looking more like a planned €6bn reduction

€6bn? Link?

It was 4bn per yr till 2013 with approval from the Commission or else Ireland will have action taken against her for breaches. Greece has till next year I believe and other countries have dates before 2013 to fall in line.

Riskymove

gurramok wrote: »

€6bn? Link?

no link

its pretty much just based on talk around the public sector orgs i am involved in; the Head of an org mentioned €6bn in a recent talk

jimmmy

Riskymove wrote: »

no link

its pretty much just based on talk around the public sector orgs i am involved in; the Head of an org mentioned €6bn in a recent talk

Maybe the 6 he mentioned was 6 million in the case of his pension, 600,000 in the case of his salary or 60k in the case of his junket expenses in Florida ? :D:D Or 6 hours work a week not surfin' the net ?

Riskymove

jimmmy wrote: »

Maybe the 6 he mentioned was 6 million in the case of his pension, 600,000 in the case of his salary or 60k in the case of his junket expenses in Florida ? :D:D Or 6 hours work a week not surfin' the net ?

the voice of reasonable debate strikes again :rolleyes:

Diarmuid

Long Onion wrote: »

Whilst personal plans are strictly speaking subject to the same limits, there is a whole rage of ways that these can be by-passed, taking into account missed years, years that were underfunded etc.

What percentage of private employees are actually contributing AVC with these limitless amounts over their working life? I'd imagine it's pretty small (ie sub 5%)

jimmmy

Riskymove wrote: »

no link

its pretty much just based on talk around the public sector orgs i am involved in; the Head of an org mentioned €6bn in a recent talk

lol. Everyone else is talking about 4 billion in cuts, and of course the unions are against that as well ( to say the least ).

Hopefully there will be 6 billion at least in cuts in public expenditure.

Bear in mind the pensions levy saves just over one billion. Cannot see the public sector wanting cuts on public expenditure nearly 6 times that, even though the govt is having to borrow 20 to 25 billion just to keep paying everyone it does as much as it does.

Sarn

jimmmy wrote: »

Hopefully there will be 6 billion at least in cuts in public expenditure.

Bear in mind the pensions levy saves just over one billion. Cannot see the public sector wanting cuts on public expenditure nearly 6 times that, even though the govt is having to borrow 20 to 25 billion just to keep paying everyone it does as much as it does.

The net Public Sector wages and pensions bill for 2009 is estimated by the Department of Finance at €18.3 billion. There's 6 billion saved in just one post. :P Social welfare will cost about €21 billion.

Riskymove

jimmmy wrote: »

lol. Everyone else is talking about 4 billion in cuts, and of course the unions are against that as well ( to say the least ).

you'll find its more than just Unions, it can be easy (for me and you and others) sometimes to simply say "cut €6bn" but there are those who need certain services (health, mental health, disability etc) who are concerned due to their or their loved ones needs and thats fully understandable

its not as easy as it seems to be entirely objective!

Hopefully there will be 6 billion at least in cuts in public expenditure.

indeed that would help things

Bear in mind the pensions levy saves just over one billion. Cannot see the public sector wanting cuts on public expenditure nearly 6 times that, even though the govt is having to borrow 20 to 25 billion just to keep paying everyone it does as much as it does.

I'd expect an increase in the levy

but bear in mind the €6bn is made up of all areas not just pay

I'd expect €2bn welfare, €2bn pay €1-2bn everything else

cyclopath2001

jimmmy wrote: »

Eddie Hobbs said a guard would need to be paying 48% of his salary in to his pension if he was to pay the full economic cost.

What is the full economic cost of the state-guaranteed social welfare pension plus increase for adult dependent paid to a retired private-sector employee who, with his spouse both live to age 85? (include 'perks' such as medical car, free fuel, telephone allowance and home-help service.)

jimmmy

cyclopath2001 wrote: »

What is the full economic cost of the state-guaranteed social welfare pension plus increase for adult dependent paid to a retired private-sector employee who, with his spouse both live to age 85? (include 'perks' such as medical car, free fuel, telephone allowance and home-help service.)

I do not know but I would love to know. It would obviously depend on the age which they retired at.....some p.s. are retiring at 50 now ( I know a few.....who would have thought 30 years ago that these people - hardly the brightest sparks in their class at school - would now effectively be retired millionaires , having had an easy enough working life as ordinary rural Gardai ).
There was another thread on pensions on this board and it showed a report from a pensions expert...and there are a few other links on this board showing p.s. "pension pots" ...but they do not include for the extra cost ( to the taxpayer ) of the spouse etc.

cyclopath2001

jimmmy wrote: »

I do not know but I would love to know. It would obviously depend on the age which they retired at.....

Simple math would be 416,000 euro, assuming no increases and leaving out the perks, such as free travel, fuel, TV license, telephone, home help and medical card. Now how much did the private sector worker pay by way of PRSI?

So you must, therefore agree that state-guaranteed pensions paid to private sector employees are quite substantial and don't bear any relationship to the amount paid in? And that it would be wrong to say that private sector workers 'have no pensions' or that they don't have 'gold plated, index-linked' pensions?

jimmmy

cyclopath2001 wrote: »

So you must, therefore agree that state-guaranteed pensions paid to private sector employees are quite substantial and don't bear any relationship to the amount paid in?

All employees are entitled to the state pension as a minimum pension. Not all private sector workers have got the pension. Some self employed etc for years did not qualify for such pensions ( despite sometimes gathering hundreds of thousands / millions for the revenue + submitting it through income tax, vat, cgt, cat, stamp duty taxes / payments etc ) - I am not sure of the position for them now. However I agree that the old age pension here in this country is far too much. In the UK for example its less than half what it is here. Its only a matter of time before the old age pension here is brought in to line with international levels.