Time to Reduce Retired Civil Servants Pensions

OhNoYouDidn't

murphaph wrote: »

Where do the current PS workers get their money to pay in as a pension contribution? From the taxpayer!

Is this news to you?

murphaph wrote: »

The taxpayer funds ALL PS pay and pensions without exception.

No true with pensions, but crack on with your epiphany that someones employers pay them and contribute to their pensions.

murphaph

OhNoYouDidn't wrote: »

Is this news to you?

No, but it's clearly news to a lot of deluded folk out there who believe in some sort of perpetual money making machine.

OhNoYouDidn't wrote: »

No true with pensions, but crack on with your epiphany that someones employers pay them and contribute to their pensions.

Where are PS pensions funded from if not ultimately the taxpayer? (Hint: Don't tell me the NPRF because the money to invest that fund came from....the taxpayer!)

murphaph

Riskymove wrote: »

ah sure taxpayers pays their mortgage, buys their food and so on

ah sure just dont give them any salary so!! let them die penniless in the gutter in old age!!

This is a completely illogical response to my post tbh.

I have no ideological difficulty with a state in which taxpayers fund public services. It is just a matter of clarity that all the revenues used by government to fund such services come ultimately from the taxpayer.

OhNoYouDidn't

murphaph wrote: »

No, but it's clearly news to a lot of deluded folk out there who believe in some sort of perpetual money making machine.

So are you proposing not paying staff?

murphaph wrote: »

Where are PS pensions funded from if not ultimately the taxpayer? (Hint: Don't tell me the NPRF because the money to invest that fund came from....the taxpayer!)

That and the staff themselves....

OhNoYouDidn't

murphaph wrote: »

This is a completely illogical response to my post tbh.

I have no ideological difficulty with a state in which taxpayers fund public services. It is just a matter of clarity that all the revenues used by government to fund such services come ultimately from the taxpayer.

And in breaking news, the Pope is a Catholic and bears deficate in forests.

murphaph

OhNoYouDidn't wrote: »

So are you proposing not paying staff?

YES!!! When the country is flat broke, it has to cut its cloth to suit its measure. Staff will have to be let go from the PS en masse over the coming months and years. The staff who are lucky enough to keep their jobs must reckon with reduced pay.

OhNoYouDidn't wrote: »

That and the staff themselves....

The staff's pay and hence the deductions from it all comes from exchequer revenue which ALL comes from the taxpayer.

jmayo

Riskymove wrote: »

the benchmarking awards were not applied to pensions

But wait weren't some pensions linked to the pay scales of the positions the pensioner once had and if they were benchmarked are the pensions then by extension getting increases because of benchmarking ?

Riskymove wrote: »

pension contributions from existing PS cover the cost of pensions

he he ever think of going into standup ?
I would bet the current pension contributions would come nowhere near covering the defined beneift pensions of ex public servants.

murphaph wrote: »

No, but it's clearly news to a lot of deluded folk out there who believe in some sort of perpetual money making machine.

Yeah it's called the "private sector middle class taxpayer".

OhNoYouDidn't wrote: »

And in breaking news, the Pope is a Catholic and bears deficate in forests.

I thought bears sh** in the woods ?
Ah well you leanr somehting new everyday.

BTW ian paisley I hear has a different interpretation of what the pope is

NewHillel

PKen wrote: »

Defined Benefit pensions would be illegal in the Private Sector.

Defined Benefit Pensions are not illegal in the private sector, indeed, they were quite common until the current crisis hit.

Just to clarify...
There are two common types of pension in Private Industry: Defined Benefit and Defined Contribution see here for further information and a comparison between the two.

However, that is not the full story. Typical Defined Benefit Pensions pay a pension based on number of years service. That pension may be based on the final salary, or much more likely, a "career average" salary. Index linking is common, but more and more pension plans have capped the yearly increase, regardless of the rate of inflation. Even with those constraints, more and more companies are moving to the cheaper (for the employer) Defined Contribution Pension.

Public Sector Defined Benefit Pension (aka as the Gold or Platinum standard):
This shares many characteristics with the "commoner" version. However, not only is it based on final salary but it is linked to the pay scale of the "Grade" the pensioner held, at retirement. If the current public servants, of that grade, get a pay increase, so does the pensioner. This is unprecedented in Private Industry.

This largesse also applies to Politicions - e.g. TDs salaries are linked to the Principal Officer Grade. However, they have additional Gold Plating -they get a pension after serving only two years. Ah but, some politicians have Gold Armour Plating - additional Defined Benefit Pensions for being ministers, former teachers, whatever. This means that politicians have a large vested interest in protecting the status quo - even though this is clearly inequitable in the current circumstances. Driving for change in this area would restore some semblance of moral authority to a deeply discredited political establishment.

The 2002 benchmarking exercise awarded average increases of 8.9% to public sector pensioners, and retired politicians. This had no possible justification, there was no possibility of a productivity gain for pensioners! This is the minimum amount by which all pensioners, who received such increases, should have their pensions cut. Given the vested interest amongst politicians, this will not happen without sustained public pressure.

cyclopath2001

NewHillel wrote: »

There are two common types of pension in Private Industry: Defined Benefit and Defined Contribution .

.....and the state contributory social welfare pension (OAP) which is effectively 'defined benefit' and not linked to the amount contributed. Most private sector workers receive this pension and then their occupational pension on top.

Pre-1995 Civil Servants are not entitled to the OAP and only get the defined benefit pension provided by the state. The typical amount of a CS pension is about equal to the OAP plus adult dependent rate.

gizmo555

OhNoYouDidn't wrote: »

Public sector earnings are NOT better than private sector ones. Its been debunked to death on here.

Well, it has been denied to death in the face of the irrefutable facts, which isn't quite the same thing.

As we've already seen, average pay in the public sector excluding health and semi-states is on average 25% higher than in the private sector.

Health sector and semi-state workers get substantially more.

Hand waving and obfuscating by saying not everyone is on the average (we knew that thanks, and it applies equally to the private sector) or introducing non sequiturs such as "what about highly paid self-employed barristers and doctors?" when the comparison is between salaried employees in the private and public sectors, does not a debunking make.

cyclopath2001

gizmo555 wrote: »

As we've already seen, average pay in the public sector excluding health and semi-states is on average 25% higher than in the private sector.

The thread is about pensions. Do PS pensioners get a higher pension than those retired from similar jobs in the private sector? For example, bank officials?

gizmo555

cyclopath2001 wrote: »

The thread is about pensions. Do PS pensioners get a higher pension than those retired from similar jobs in the private sector? For example, bank officials?

Well, since:

(a) The pensions are proportional to pay, and on average PS pay is substantially higher

and

(b) PS pensioners receive percentage increases in their pensions in line with increased pay for the post they retired from (something which is unheard of in the private sector)

on average, yes.

What the thread is about, is whether pension increases attributable to benchmarking should be rolled back. In my view, they ought to be.

NewHillel

cyclopath2001 wrote: »

.....and the state contributory social welfare pension (OAP) which is effectively 'defined benefit' and not linked to the amount contributed. Most private sector workers receive this pension and then their occupational pension on top.

You are right, most private sector pensioners receive the contributary old age pension. For many, this is the only elemenent of their pension that is in any way index linked. All that receive this, have it taken into account when their occupational pension is calculated.

barney4001

THEY SHOULD BE MADE TO RETIRE AT 60/65 INSTEAD OF CONTINUEING ON AND MAKEING FOOLS OF THEMSELVES

Geuze

jmayo wrote: »

But wait weren't some pensions linked to the pay scales of the positions the pensioner once had and if they were benchmarked are the pensions then by extension getting increases because of benchmarking ?

CORRECT. All public service pensions are linked to the grade you retired from.

I would bet the current pension contributions would come nowhere near covering the defined beneift pensions of ex public servants.

A typical public servant paying 6.5% of salary obviously in no way comes close to funding the true long-run cost of their pension benefits.

...

PKen

NewHillel wrote: »

Defined Benefit Pensions are not illegal in the private sector, indeed, they were quite common until the current crisis hit.

You've quoted me from Post #79. Kindly read my later Post #116. In it, I explain the context, where such a Defined Benefit Pension WOULD be illegal. In fact, could everyone, please carefully read all contributions made, before commenting!

ISAW

barney4001 wrote: »

THEY SHOULD BE MADE TO RETIRE AT 60/65 INSTEAD OF CONTINUEING ON AND MAKEING FOOLS OF THEMSELVES

And this would have the opposite effect to that which you want! for example suppose you take a more extreme case. Retire at 50. Say they began work at 20 and are now 40 ( actually Gardai can retire at 50 so we are not far from that). so they have paid tax for 30 years and get a full pension. Now you have a fully qualified person forced to retire and someone with much less experience replacing them. So suppose the retiree lives to 90? Where will you get the money to pay for their pension for the next 40 years?

thebullkf

barney4001 wrote: »

THEY SHOULD BE MADE TO RETIRE AT 60/65 INSTEAD OF CONTINUEING ON AND MAKEING FOOLS OF THEMSELVES

and you should learn how to spell.so you don't
continue to make a fool of yourself.

dan_d

As an aside to this, here's an interesting little exercise carried out by the Indo today.

http://www.independent.ie/business/personal-finance/pensions/cutting-pension-tax-reliefs-would-hit-ministers-hard-2406910.html

As it was carried out for them, it's hard to see exactly where some numbers come from. However it's a deeply shocking result.

Riskymove

jmayo wrote: »

But wait weren't some pensions linked to the pay scales of the positions the pensioner once had and if they were benchmarked are the pensions then by extension getting increases because of benchmarking ?

all I can do is repeat

Benchmarking awards were not passed on to pensioners

National Wage Agreements have been, but not benchmarking

he he ever think of going into standup ?

only if the audience are particularly open to sensationalist populist material

I would bet the current pension contributions would come nowhere near covering the defined beneift pensions of ex public servants.

the figures have been bandied about on these threads before..although they may have been before the pay cut and so may have changed

as far as I recall both are around €2bn...although with the ISER and reduction in numbers this may have changed...certainly they are not too far away from eachother

gizmo555

Riskymove wrote: »

all I can do is repeat

Benchmarking awards were not passed on to pensioners

National Wage Agreements have been, but not benchmarking

You are 100% wrong.

From the Impact web page Benchmarking Questions Answered:

What about pensioners?

Public service pensioners will benefit from benchmarking increases in exactly the same way that they currently benefit from pay increases under national agreements.

RTE News website, July 9 2002:

The Public Services Committee of the Congress of Trade Unions has secured confirmation that public service pensioners will benefit from benchmarking increases.

Speaking after today's meeting with Department of Finance officials, Peter McLoone, Chairperson of ICTU's Public Services Committee, said the Department had confirmed that benchmarking increases would be applied to pensioners in the usual way.

Today's meeting was the first between the public sector trade unions and the Department of Finance on the implementation of benchmarking pay.

Last week's report on benchmarking recommended pay awards averaging 8.9% for 230,000 public servants.

Riskymove

gizmo555 wrote: »

You are 100% wrong.

actually I'd be 50% wrong.....or 50% right...depending on your view

I stand corrected

gizmo555

Riskymove wrote: »

actually I'd be 50% wrong.....or 50% right...depending on your view

Whatever that means . . . .

NewHillel

PKen wrote: »

You've quoted me from Post #79. Kindly read my later Post #116. In it, I explain the context, where such a Defined Benefit Pension WOULD be illegal. In fact, could everyone, please carefully read all contributions made, before commenting!

In return, could I ask that everyone please check their facts before making contributions that even the most rudimentary checks would have identified as incorrect. (Not only you, by the way. )

cyclopath2001

gizmo555 wrote: »

Well, since:
(a) The pensions are proportional to pay, and on average PS pay is substantially higher
and
(b) PS pensioners receive percentage increases in their pensions in line with increased pay for the post they retired from (something which is unheard of in the private sector)
on average, yes.

Would it not better to base the argument on the actual amounts paid out, rather than speculating as you do above? For example, a civil servant with one adult dependent, retires with salary at 40k, gets 20k pension compared to private sector worker with one adult dependent who gets OAP+adult dependent top-up+occupational pension?

cyclopath2001

dan_d wrote: »

As an aside to this, here's an interesting little exercise carried out by the Indo today.

http://www.independent.ie/business/personal-finance/pensions/cutting-pension-tax-reliefs-would-hit-ministers-hard-2406910.html

As it was carried out for them, it's hard to see exactly where some numbers come from. However it's a deeply shocking result.

The 'Indo' is Ireland's equivalent of 'Fox News'.

This bit is stupid:

But to achieve the €1bn savings the employer contributions would have to be taxed as a benefit in kind. This would mean that what an employer contributes to a person's pension (or the imputed state contribution to public sector pensions) would be taxed at 41pc, plus levies.

What happens at present is the pension entitlement is taxed, as an when it is paid out to the pensioner, so the Indo is now proposing that the money be doubly taxed: at 41% on the way in to the pension fund and then again at 41% when it's paid out. And, it ignores that presently when a CS pensioner dies, benefit stops there and then. So, if a guy pops his clogs a year after retiring, the government saves all the money that would have been paid if he'd lived to be 90.

gizmo555

cyclopath2001 wrote: »

Would it not better to base the argument on the actual amounts paid out, rather than speculating as you do above? For example, a civil servant with one adult dependent, retires with salary at 40k, gets 20k pension compared to private sector worker with one adult dependent who gets OAP+adult dependent top-up+occupational pension?

Considering, for example, that:

the pension coverage rate among those employed in the workforce is only at 54% (CSO Quarterly National Household Survey Pension Update 2008).

i.e., 46% of private sector retirees will have only the state pension, I can't agree that it's really speculative. Be that as it may, it's beside the main point of the thread, which is that state pensioners got increases through benchmarking. Now that many of the private sector salaries which were used for benchmarking comparison have fallen, and indeed PS workers have taken pay cuts, it's only fair and logical that their retired colleagues take a hit, which so far they've avoided.

From the mood music in the run up to the budget, I think it's pretty well a foregone conclusion that it will happen, too.

NewHillel

gizmo555 wrote: »

...Be that as it may, it's beside the main point of the thread, which is that state pensioners got increases through benchmarking. Now that many of the private sector salaries which were used for benchmarking comparison have fallen, and indeed PS workers have taken pay cuts, it's only fair and logical that their retired colleagues take a hit, which so far they've avoided.

From the mood music in the run up to the budget, I think it's pretty well a foregone conclusion that it will happen, too.

It was clear from Enda's interview on RTE just now that he has no intention of tackling excessive state pensions - I presume, because his own "patriots" won't stand for it. Be that as it may if any party is to get my vote they'll have to have credible proposals in this area. Not only that I'm prepared to canvas and work on behalf of the party with the most credible position. As it is, we are being savaged to pay for excessive pensions for Politicians and Public Servants.

Think about it, afraid of the OAP's, protective of the public service. That leaves the rest of us in the middle to carry the can. Enough is enough!

PKen

NewHillel wrote: »

In return, could I ask that everyone please check their facts before making contributions that even the most rudimentary checks would have identified as incorrect. (Not only you, by the way. )

Which part of, "Such a pension would be illegal in the Private Sector, if the funds were to be backed up by the State (taxpayer)" is incorrect?
N.B. I never said, Defined Benefit pensions were illegal. Only that, they would be illegal, if in the aformentioned circumstances.

tails_naf

Don't know if this has already been posted, but it's a great graphic from the irish times:

http://www.irishtimes.com/focus/2010/public_service_pension/index.pdf

Long story short, both PS pay and pensions have grown way faster than expected, but more importantly, the pensions side of things is getting way out of hand, the bill for it has grown by 1/2 a billion in the last 2 years alone. To say it it out of control at the current rates is an understatement!

you can argue the toss about benchmarking and whatnot, but hard to argue with cold hard figures.