Missed opportunity to reduce pensions

murphaph

Why oh why (well we all know why) did they not cut the state pension and public sector pensions? They keep going on about the falling cost of living (true) yet believe pensioners of all descriptions are imune to falling prices?? Nonsense, could have saved another billion easily with a 10% cut to all pensions. The rest of it wasn't too bad but they'll need to trim more next year, along with cutting the min. wage. Ireland is still far from competitive in a European sense.

Wonder will we see any strikes, wouldn't be surprised if we didn't tbh.

ceret

murphaph wrote: »

Why oh why (well we all know why) did they not cut the state pension and public sector pensions?

Pensioners vote in high numbers, and they tend to in favour of Fianna Fáil, (as opposed to Labour/Greens/etc.)

Boskowski

Not sure they can do this.

Whatever about future pensions but I mean they have to honor some contracts right?

ParkRunner

realcam wrote: »

Whatever about future pensions but I mean they have to honor some contracts right?

Only the contracts that suit them it seems

Godge

Agreed, cannot understand why they didn't cut public sector pensions.

Rody Molloy has had no cut in his €100,000 pension, Bertie Ahern and John Bruton, Garret Fitzgerald and Maire Geoghegan-Quinn all survive the cuts with their huge pensions intact.

A teacher who retired at the top of the scale with an A post allowance gained through seniority was already better off than a teacher starting out. They got no cut even thought their mortgage is probably paid off and their kids grown up. they probably didn't even notice as they were off in Spain in the winter apartment. The newly-qualified teacher in their second or third year probably has a negative equity mortgage and a family to support.

Cuts in public sector wages are fair. Excusing public sector pensioners from the effects is unfair.

Meself

By switching from final salary to a career average pension they have cut the pension. Essentially this reduces the future liabilities that the state has to ring fence to pay for pensions into the future. I'd imagine that this is a big saving for the government.

Drumpot

Had this discussion with a friend who is a pension specialist, particularly in this area . .

I had similar views as the OP, but he explained that its not simply a case of cutting all Pension entitlements on the Public service.

It has to be a long term strategy to reduce the benefits (which is hopefully what they started today). .

We (taxpayers) already have to contribute 1.3billion to whatever the public service contribute to to their pensions . The less the public service pay towards their pension, the more the taxpayer has to contribute to finance the existing receivers of state pensions.

I suggested increasing the pensions levy to 25-30% (a more realistic contribution in real terms) and give public servants a choice to "opt out" of the existing pension scheme (in turn they dont pay any levy). . Again, my friend pointed out, that while in the long term it would save us billions, it would actually cost us more in the short term (which is simply not affordable).

To reduce the actual received benefits of existing state public service pensions ? I dont think that would be legally possible. They did their time and they fullfilled the terms of their contract . . Where do we stop ? ?

murphaph

Meself wrote: »

By switching from final salary to a career average pension they have cut the pension. Essentially this reduces the future liabilities that the state has to ring fence to pay for pensions into the future. I'd imagine that this is a big saving for the government.

There's no concrete plan yet but yes, a good first step in reforming public sector pensions, but what about the state pension? It's the same as the dole FFS and the cost of living is falling, should have been cut 10% tbh.

westtip

Godge wrote: »

Agreed, cannot understand why they didn't cut public sector pensions.

Rody Molloy has had no cut in his €100,000 pension, Bertie Ahern and John Bruton, Garret Fitzgerald and Maire Geoghegan-Quinn all survive the cuts with their huge pensions intact.

A teacher who retired at the top of the scale with an A post allowance gained through seniority was already better off than a teacher starting out. They got no cut even thought their mortgage is probably paid off and their kids grown up. they probably didn't even notice as they were off in Spain in the winter apartment. The newly-qualified teacher in their second or third year probably has a negative equity mortgage and a family to support.

Cuts in public sector wages are fair. Excusing public sector pensioners from the effects is unfair.

Dead right on all counts they need to address this issue - perhaps the next time they will but it needs to be done. And sod contracts just pay them less and let them take the state to court if they dare - it particularly sickens me to think of Ahern drawing his pension as well as his TD salary I really fu*king hate that man.

He shoudl have said no polititical office pensions can be taken till they are 66 and anyone taking one now will be cut by 40% this year, 40% the following year and the final 20% stopped in three years time - and then wait till they are 66.

Godge

Meself wrote: »

By switching from final salary to a career average pension they have cut the pension. Essentially this reduces the future liabilities that the state has to ring fence to pay for pensions into the future. I'd imagine that this is a big saving for the government.

that proposal will only affect current public servants who got a pay cut today. It won't affect those already retired on big pensions who have had no cut in pay. Neither have they paid the pension levy.

hmmm

I think many PS pensioners are vastly overpaid. In saying that, I don't like the idea of pensions being changed for anyone so I support no changes.

Planning for a pension can take 30 years of someone's life. Future pensioners should be encouraged to work out how much they need to retire on and plan accordingly. You don't want someone to hit 65 and be suddenly told that their plans are being changed, that person has no means to make up the loss.

Pension changes should be made 20 or 30 years in advance with plenty of warning being given.

Godge

Drumpot wrote: »

Had this discussion with a friend who is a pension specialist, particularly in this area . .

I had similar views as the OP, but he explained that its not simply a case of cutting all Pension entitlements on the Public service.

It has to be a long term strategy to reduce the benefits (which is hopefully what they started today). .

We (taxpayers) already have to contribute 1.3billion to whatever the public service contribute to to their pensions . The less the public service pay towards their pension, the more the taxpayer has to contribute to finance the existing receivers of state pensions.

I suggested increasing the pensions levy to 25-30% (a more realistic contribution in real terms) and give public servants a choice to "opt out" of the existing pension scheme (in turn they dont pay any levy). . Again, my friend pointed out, that while in the long term it would save us billions, it would actually cost us more in the short term (which is simply not affordable).

To reduce the actual received benefits of existing state public service pensions ? I dont think that would be legally possible. They did their time and they fullfilled the terms of their contract . . Where do we stop ? ?

Public Servants pay a pension contribution of 6.5%, added to this is the pension levy averaging 7.5% giving a total of 14%. In the private sector, a good employer (banks, publicly quoted companies, MNCs, large private companies) matches the contributions of their employees. This would give a total of 28% contributed by employer and employee towards the cost of a public service pension. not too far off the actuarial cost. The pension levy should have put to bed some aspects of the public service pension debate. If Lenihan is clever he will stop deducting the pension levy from new entrants who join his new pension scheme and offer that option to existing public servants.

It is no more legally possible to reduce the salary of public servants than to reduce the pension of retired public servants. It requires new legislation to cut salaries so why can't the legislation include the pensioners.

Meself

Godge wrote: »

that proposal will only affect current public servants who got a pay cut today. It won't affect those already retired on big pensions who have had no cut in pay. Neither have they paid the pension levy.

Yeh thats true. something should have been done on that also.

Godge

Drumpot wrote: »

Had this discussion with a friend who is a pension specialist, particularly in this area . .

I had similar views as the OP, but he explained that its not simply a case of cutting all Pension entitlements on the Public service.

It has to be a long term strategy to reduce the benefits (which is hopefully what they started today). .

We (taxpayers) already have to contribute 1.3billion to whatever the public service contribute to to their pensions . The less the public service pay towards their pension, the more the taxpayer has to contribute to finance the existing receivers of state pensions.

I suggested increasing the pensions levy to 25-30% (a more realistic contribution in real terms) and give public servants a choice to "opt out" of the existing pension scheme (in turn they dont pay any levy). . Again, my friend pointed out, that while in the long term it would save us billions, it would actually cost us more in the short term (which is simply not affordable).

To reduce the actual received benefits of existing state public service pensions ? I dont think that would be legally possible. They did their time and they fullfilled the terms of their contract . . Where do we stop ? ?

hmmm wrote: »

I think many PS pensioners are vastly overpaid. In saying that, I don't like the idea of pensions being changed for anyone so I support no changes.

Planning for a pension can take 30 years of someone's life. Future pensioners should be encouraged to work out how much they need to retire on and plan accordingly. You don't want someone to hit 65 and be suddenly told that their plans are being changed, that person has no means to make up the loss.

Pension changes should be made 20 or 30 years in advance with plenty of warning being given.

most public service pensioners who retired more than 10 years ago (think guards and firemen who retire at 50, teachers who retire at 55 so not that old) have pension payments that are bigger than the salaries they received at the time. This is because the pension goes up when the salary goes up.

So why doesn't the pension go down when the salary goes down???

RGS

My mother is a pensioner on a non contributory pension as she was obliged to leave work when she got married in 1961 and you now want to reduce her pension of just over €200 per week.

She was not allowed work and therefore was unable to provide for her own pension and you want to reduce her pension. Thats no way to treat our elderly people.

Drumpot

Godge wrote: »

Public Servants pay a pension contribution of 6.5%, added to this is the pension levy averaging 7.5% giving a total of 14%. In the private sector, a good employer (banks, publicly quoted companies, MNCs, large private companies) matches the contributions of their employees. This would give a total of 28% contributed by employer and employee towards the cost of a public service pension. not too far off the actuarial cost. The pension levy should have put to bed some aspects of the public service pension debate. If Lenihan is clever he will stop deducting the pension levy from new entrants who join his new pension scheme and offer that option to existing public servants.

It is no more legally possible to reduce the salary of public servants than to reduce the pension of retired public servants. It requires new legislation to cut salaries so why can't the legislation include the pensioners.

Your figures are stuff myths are born from and public service unions cling to (in the hope that the uneducated will accept them as fact). .

Please quote me an extensive list of companies that "match" their employees contributions of 14% . . As a financial advisor (to both public and private sector employees), the ONLY time I have come across this is with directors of companies, people of great systemic importance to a company or owners of companies . And even at that, its a rarity . .

A private employers "requirement" under pension legislation is that they make a "meaningful" contribution with a minimum being one tenth of whatever an employee contributes. Thats assuming the company has a company pension arrangement. If the employee has their own PRSA, the company is not obliged to contribute anything (and usually they dont) .

And the old 30% of Salary chestnut . . Had this debate with what I can only describe as an "in the clouds" public servant (not saying you are, saying the debate was with one) and completely blew them away . .

I refer to . . .

http://www.boards.ie/vbulletin/showpost.php?p=62072783&postcount=270


If you read the continuing debate I had with our friendly , ill educated colorful but passionate character, you will see they stopped replying (they gave up quoting general information/waffle that didnt stack up when scrutinized).

http://www.boards.ie/vbulletin/showthread.php?p=62072783#post62072783


In truth, that 30% of salary figure assumes alot of consistent growth . .

That aside, I would love to have a debate with a pension specialist who would like to inform me how a defined benefit scheme in this day and age is equivalent to the average defined contribution pension. .

Bruce2008

RGS wrote: »

My mother is a pensioner on a non contributory pension as she was obliged to leave work when she got married in 1961 and you now want to reduce her pension of just over €200 per week.

She was not allowed work and therefore was unable to provide for her own pension and you want to reduce her pension. Thats no way to treat our elderly people.

I totally agree with you... the old age pensioners in this country should not be hit in these 'bad times' ... they are intitled to and deserve what they have.... at least we can hold our heads up and say we can allow our pensioners to have a 'good' standard of living in their old age....

Demonique

RGS wrote: »

My mother is a pensioner on a non contributory pension as she was obliged to leave work when she got married in 1961 and you now want to reduce her pension of just over €200 per week.

She was not allowed work and therefore was unable to provide for her own pension and you want to reduce her pension. Thats no way to treat our elderly people.

By your logic, reducing the disability allowance is no way to treat our disabled people.

If disabled people have their allowance cut then pensioners should too, to do otherwise is discriminatory

Dannyboy83

Pension reforms offers little in the way of political gain to the party implementing it, particularly in the budget witnessed today.

The amount of Public servants retiring this year is reputed to exceed the last several years combined. (Afaik, earned pensions cannot be adjusted retrospectively, or at least with great difficulty - according to Brian Lenihan when confronted with Rody Molloy's pension, who claimed that the government were open to litigation if attempting to do so.)
Future pensions do not have to be paid today & the hope is that the exchequer will recover during the interim.

Therefore, pensions are a can to be kicked down the alley, for future governments to deal with.

murphaph

Bruce2008 wrote: »

I totally agree with you... the old age pensioners in this country should not be hit in these 'bad times' ... they are intitled to and deserve what they have.... at least we can hold our heads up and say we can allow our pensioners to have a 'good' standard of living in their old age....

OAPs get a host of extra benefits over and above the basic state pension of 204 a week: fuel allowance, telephone allowance, living alone allowance, free medical care....

The average pensioner has no mortgage to pay. They only have to feed themselves and pay (subsidised) bills with it. If an OAP can't manage on 204 a week they are doing something very wrong, especially given the fall in the cost of living!

It is even more astonishing if a retired couple on 404 a week can't manage. There IS room to manouvre here. Social welfare should be directed where it's most needed, ie, not at 18 year olds living at home (addressed by the budget) and not at pensioners with no kids or mortgage etc. to pay.

westtip

murphaph wrote: »

OAPs get a host of extra benefits over and above the basic state pension of 204 a week: fuel allowance, telephone allowance, living alone allowance, free medical care....

The average pensioner has no mortgage to pay. They only have to feed themselves and pay (subsidised) bills with it. If an OAP can't manage on 204 a week they are doing something very wrong, especially given the fall in the cost of living!

It is even more astonishing if a retired couple on 404 a week can't manage. There IS room to manouvre here. Social welfare should be directed where it's most needed, ie, not at 18 year olds living at home (addressed by the budget) and not at pensioners with no kids or mortgage etc. to pay.

This really says it as it is - there is no doubt your consumption goes down as you get older, and homeowners are in the position of no mortgage to pay as many many pensioners are. The pension could have been shaved by a nominal amount somewhere between 5 and ten euro a week.

Bruce2008

westtip wrote: »

This really says it as it is - there is no doubt your consumption goes down as you get older, and homeowners are in the position of no mortgage to pay as many many pensioners are. The pension could have been shaved by a nominal amount somewhere between 5 and ten euro a week.

I'd like to think that after working my whole life that at the end of my days I would not have to just survive on a basic living standard.... If I had an extra pension then maybe that should be looked at... but at least the basic pension should be left alone... do they not deserve it!!! They have raised us, fed us, clothed us, worried about us, now that they have finished working let them have it!!!

RGS

Demonique wrote: »

By your logic, reducing the disability allowance is no way to treat our disabled people.

If disabled people have their allowance cut then pensioners should too, to do otherwise is discriminatory

Yes i believe the disability pension and the carers allowance should not be cut.

I cannot believe we Irish have gone so me fein and want to screw our old and infirmed.

Hope you are never put in there position.

moceri

Such largesse on Brian Lenihan's part to Top up the pensions of Revenue Comissioners' Staff by Euro 100M. Nice One Brian - will you top up my Pension Plan?

Oh silly me; as a Public Sector Employee I can't afford one.

http://www.independent.ie/national-news/lenihan-backs-8364100m-pension-topup-schemes-1950729.html

murphaph

RGS wrote: »

Yes i believe the disability pension and the carers allowance should not be cut.

I cannot believe we Irish have gone so me fein and want to screw our old and infirmed.

Hope you are never put in there position.

What should be cut, in your opinion then?

I KNOW (or hope) I will be old some day. I KNOW I will likely need a lot less to live on then than I do now.