Public service pension cuts

Kristopherus

Geuze wrote: »

A single person over 65 is exempt from tax if earning 20k or less.

A married couple is exempt if one person is over 65, and the earnings are under 40k. This is a serious exemption.

Also, over 65s get an age tax credit of 325 single / 650 married.


On superannuation, please note that most PS have always paid 6.5% pension contribution. Civil servants pay 1.5%. This is separate from PRSI.

They now also pay the new pension levy.

Please note that the pension levy does not go into any pension fund. It goes into the black hole that is Anglo. Also note that most people who are pensioners now lived and worked through the eighties when Income tax was over 55% and the high rate of VAT was something like 52%. Most everyday items you buy now are cheaper than they were in that period. Pensioners are rightly indignant at having to contribute a second time over for a govt that has mismanaged the economy. They will point out, rightly IMO, that they didnt start the fire.

corkjohn2

People who worked in the Public Service contributed throughout their working lives for their pensions.As noted earlier at a rate of 6.5 % of their gross salaries. Additionally for decades public servants were very poorly paid. Even during the times of the Celtic Tiger, friends of mine who worked in the private sector often said that they would not get out of bed in the morning for my salary, and this is not counting their company cars ,travel and other perks, such as company grants towards their kids education. Suddenly the public sector worker was the focus of cuts and now its the public sector pensioner, who is not entitled to any old age pension but is now widely seen as fair game for an unwarranted attack on his or her pension. This pension is a contract situtation between the state and the pensioner- the deal being 1/80 of pay for every year worked up to 40/80s i.e half pay after 40 years of service.

The state has now broken this contract and who is to say that next year they wont take another few percentage points off the pensions of public servants. Incidentally we are taking the same pain as everyone else in terms of the increased taxes and other levies.

I think that there are 110,000 public service pensioners in the state.
What we should do now is form some type of union and get very active in defending our position . A small contribution per head would fund a High Court Challenge

P. Breathnach

corkjohn2 wrote: »

... The state has now broken this contract ...

The first breach was when the pay of those still in service was cut, and pensions were not cut in line with that. I didn't notice many public service pensioners complain about that (I did).

My only complaint about the cuts now being imposed is that the mechanism is inappropriate: what should have been done was to restore the linkage between current pay levels and pensions.

cyclopath2001

corkjohn2 wrote: »

The state has now broken this contract and who is to say that next year they wont take another few percentage points off the pensions of public servants.

This could have an impact on plans to reduce numbers through early retirement as people considering taking it don't know if the pension amount being offered now will be reduced as soon as they've cleared their desks.

Think about the people who left recently on reduced pensions, having carefully calculated if they could get by, and are now faced with a 4% reduction, plus extra levies, more tax and property and water levies in a year or so.

joolsveer

corkjohn2 wrote: »

...............................

I think that there are 110,000 public service pensioners in the state.
What we should do now is form some type of union and get very active in defending our position . A small contribution per head would fund a High Court Challenge

I believe that there is the Association of Retired Civil and Public Servants. I don't know if they have a website or how active they are.

P. Breathnach

cyclopath2001 wrote: »

This could have an impact on plans to reduce numbers through early retirement as people considering taking it don't know if the pension amount being offered now will be reduced as soon as they've cleared their desks....

A handful of cases does not amount to conclusive proof, but I have had conversations with public servants who are contemplating taking early retirement. All of them recognised that pension cuts were a possibility, even a probability. I would be surprised if many public servants are so naive as to believe otherwise.

The true inducement to retire early is the preservation, for the time being, of the lump sum.

cyclopath2001

P. Breathnach wrote: »

The true inducement to retire early is the preservation, for the time being, of the lump sum.

There is so much uncertainty - should people 'take the money and run'?

P. Breathnach

cyclopath2001 wrote: »

There is so much uncertainty - should people 'take the money and run'?

I am aware of some who have, including one person who retired just before the budget for fear that lump sums might be hit with tax.

irishh_bob

corkjohn2 wrote: »

People who worked in the Public Service contributed throughout their working lives for their pensions.As noted earlier at a rate of 6.5 % of their gross salaries. Additionally for decades public servants were very poorly paid. Even during the times of the Celtic Tiger, friends of mine who worked in the private sector often said that they would not get out of bed in the morning for my salary, and this is not counting their company cars ,travel and other perks, such as company grants towards their kids education. Suddenly the public sector worker was the focus of cuts and now its the public sector pensioner, who is not entitled to any old age pension but is now widely seen as fair game for an unwarranted attack on his or her pension. This pension is a contract situtation between the state and the pensioner- the deal being 1/80 of pay for every year worked up to 40/80s i.e half pay after 40 years of service.

The state has now broken this contract and who is to say that next year they wont take another few percentage points off the pensions of public servants. Incidentally we are taking the same pain as everyone else in terms of the increased taxes and other levies.

I think that there are 110,000 public service pensioners in the state.
What we should do now is form some type of union and get very active in defending our position . A small contribution per head would fund a High Court Challenge

those myths ( about public servants being poorly paid ) were debunked long ago

Japer

+1.

Did'nt the last survey show that the public sector are paid 48% more than the private sector.

Of the 1.8 million workers in the private sector, very very few have had the same security and pensions enjoyed by the public sector. The country will not improve until the huge difference between the public ( inc the public service pensioners, many of whom get more for a pension that the average industrial wage ) and the private sector is tackled.

P. Breathnach

Japer wrote: »

... Did'nt the last survey show that the public sector are paid 48% more than the private sector....

No.

Japer

P. Breathnach wrote: »

No.

You are actually correct this time. It is 49%, according to the governments own statisticians, the cso.

http://www.cso.ie/releasespublications/documents/earnings/current/earnlabcosts.pdf

P. Breathnach

Japer wrote: »

You are actually correct this time.

Don't be surprised: I manage to be correct fairly often, although I do not have the temerity to claim 100%.

It is 49%, according to the governments own statisticians, the cso.

http://www.cso.ie/releasespublications/documents/earnings/current/earnlabcosts.pdf

So let's work on being correct: this is an apples-and-oranges comparison. It takes no account of a number of important variable like education requirements, skill levels, responsibility borne, experience.

There is a public sector premium. It was close to 20% in 2007, and has probably been eroded since then. See http://www.cso.ie/newsevents/pr_nationalemploymentsurvey2007supp.htm

femur61

Pensions should be the least of the PS worries. If the deal from the IMF/EU gets rejected tomorrow we don't really have enough money to pay PS wages.

Lu Tze

P. Breathnach wrote: »

So let's work on being correct: this is an apples-and-oranges comparison. It takes no account of a number of important variable like education requirements, skill levels, responsibility borne, experience.

Probably true, though i would imagine it is also be due to what i assume is a larger percentage of the total work force at management grades compared to most organisations.

P. Breathnach wrote: »

There is a public sector premium. It was close to 20% in 2007, and has probably been eroded since then. See http://www.cso.ie/newsevents/pr_nationalemploymentsurvey2007supp.htm

I doubt it has been eroded that much, as there have been significant drops in earning in most of the private sector also.

As an engineer i was directly comparable. Precuts my equivalent in a local authority was on 27% more. Post cut 10% for me and i assumed 14% (is this the average cut to PS pay?) off gross reduces this to 21%. I didnt take the cut but thats beside the point. Just pointing out the privates sector pay is unlikely to have remained static.

P. Breathnach

Lu Tze wrote: »

Probably true, though i would imagine it is also be due to what i assume is a larger percentage of the total work force at management grades compared to most organisations.

Possibly, but in a great deal of the public service it is difficult to make relevant comparisons with the private sector. One or two areas are notoriously over-managed. Not all public servants in senior positions are actually managers (or management is only a small port of their role).

I doubt it has been eroded that much, as there have been significant drops in earning in most of the private sector also.

As an engineer i was directly comparable. Precuts my equivalent in a local authority was on 27% more. Post cut 10% for me and i assumed 14% (is this the average cut to PS pay?) off gross reduces this to 21%. I didnt take the cut but thats beside the point. Just pointing out the privates sector pay is unlikely to have remained static.

I worded things cautiously. We don't know how much pay has fallen in private sector jobs that are reasonably comparable with public sector jobs. I suspect, and I think you also do, that there has been some erosion of the difference.

Lu Tze

P. Breathnach wrote: »

Possibly, but in a great deal of the public service it is difficult to make relevant comparisons with the private sector. One or two areas are notoriously over-managed. Not all public servants in senior positions are actually managers (or management is only a small port of their role).

I have worked in local authorities. They do tend to be inefficiently run, im not necessarily saying the ratio of managers is high, but there seems to be a ridiculous amount of admin (and they are all powerful, have a look at the break down of the section directors in any local authority and you will normally find only one is an engineer, the rest came from admin, which is a joke if considering they would be in charge of water & environment, housing, planning or roads) , as a result of the laborious procedures required to do anything.

It does seem that some of these procedures were brought in solely for job creation in the PS as they seem to add no value. Others add oversight etc. which is good, though without any accountablilty its not like anything will change.


In the various offices i met there are always some excellent staff, they are in the minority, but they are the ones who would have the appetite for reform - and would benefit from it.

P. Breathnach wrote: »

I worded things cautiously. We don't know how much pay has fallen in private sector jobs that are reasonably comparable with public sector jobs. I suspect, and I think you also do, that there has been some erosion of the difference.

It has been eroded, in my case where the role is directly comparable between the sectors, but it still stands at 21% (estimated, pension levy etc likely not included)

But here is a problem - as you go up the engineering scale the salaries tend towards each other at the top (senior exec in LA - principal engineer in private sector, if they were known in their field and there was still demand)

On that reasoning it is the lower paid engineers etc. which should get cut most, as they are the ones out of line with the market rates. I suspect this is applicable to most other positions as well.

P. Breathnach

Lu Tze wrote: »

...
But here is a problem - as you go up the engineering scale the salaries tend towards each other at the top (senior exec in LA - principal engineer in private sector, if they were known in their field and there was still demand)

On that reasoning it is the lower paid engineers etc. which should get cut most, as they are the ones out of line with the market rates. I suspect this is applicable to most other positions as well.

You are at one with the benchmarking body. They awarded less to the lower grades on similar reasoning.

For that reason, many of the calls to slash pay at the higher levels in the public service while leaving the lower grades alone (or cutting them far less) might be inappropriate.

joolsveer

Does anyone know if the government enacted legislation to reduce public service pensions? I can't find the answer on the Department of Finance website.

kippy

Drumpot wrote: »

Dont ask the Pensioners to pay anymore so . . Just reverse the increases in their pensions that were provided during the bubble years, with taxes the government no longer gets.

The older people of this country worked for a pension and a Pension they should have. To presume that they should keep the increases that were supposed to be in line with inflation, cost of living and the success of the state, is like the attitudes of some public servants presuming that they "didnt cause this mess" therefore they shouldnt pay anything.

And as for the person that metioned people with children. In most cases, the children of today will be looking after the OAP's of tomorrow and as far as I can tell the state , overall, makes more out of most children then any of the welfare provided to parents to bring them up.

Not just that, the children who were unable to vote during the 00's actually are the only true section of society that can say they had no say in how our country was run or where we find ourselves now. The pensioners were happy to generally vote FF while the going was good.

I have nothing against Pensioners, I have a problem with sections of society trying to appeal to our good nature by crying foul of what has happened and claim poverty. I believe in protecting the vulnerable, not those looking to simply protect their lifestyle.

I have to say Drumpot, we've had our difference of opinion in the past but that post is spot on.

Now, there are a lot of misconceptions out there on all sides on public service pensions however ultimately I believe what you are saying is at least fair.
While public service pensions have decreased in the past couple of years due to the tax increases (changes) that have effected everyone, the value of their gross pensions have not changed IN LINE with the salaries those pensions are index linked to. This is completely wrong in my opinion.

Recent changes to the public service pension schemes are a very good thing in my opinion - namely the amount that current public servants pay towards their pension and more importantly the final pension calculations based on average salaries over your years of service as opposed to salary over last few years of service, however certain caps on pensions need to be introduced in the public service - relatively high caps mind you but caps none the less.


I too have grown tired of this "protect the vulnerable pensioners" stance. Yes there are many "vulnerable" pensioners out there, however not every pensioner is "vulnerable".

twowheelsonly

johnboy_123 wrote: »

This is the problem all people in society should be sharing the load here. Not just the lower class and the people paying tax. This budget is very unfair. Its no coincidence that the 2 groups not taken a hit the P.S and the OAPs are historically FF heads. My advice to anyone reading this is to vote FG as they have said they will tackle the public sector and the unions and any party willing to put this sector of society to the sword will get my vote

Have you not taken into account all of the hits that the PS took before the Budget or did they fly over your head?? With the latest round of cuts/taxes/levies i would estimate my take home pay to have fallen somewhere between 21 and 25% in the past 12 months. (Too Sh Sick of the whole thing to sit down and calculate it!!!) . I'm reasonably well paid but even with a promotion in the meantime I estimate my take home pay to be at 2002/3 levels.

johnboy_123 wrote: »

So why is the private sector which is already been cut by employers have to bear this pain.

Same answer as my previous one...

westtip wrote: »

You are I think referring to the comments I made - I was not complaining how I have to feed the kids etc, I am not even in the bracket of people I was describing, you assumed I was talking about myself - I wasn't so please refrain from the school teacher attitude with comments like "I have taken issue with a poster". I have a great deal more sympathy for the muddling classes in their 30s and 40s than I do with the grey jagger generation, is actually my view. Please do not assume if a poster writes about a certain group of people that he/she belongs to that group. I feel very sorry for the Muddling generation - they have been dealth a much tougher set of cards than their parents.

The 'Muddling Classes' that you speak of were either being born or being reared by todays Pensioners back in the wonderful days of the eighties. I don't know if you remember the eighties or not but I certainly do, and it wasn't funny. Those same pensioners struggled through all of that and were responsible for helping the economy to grow again. If we could have stopped at around '94/'95 before greed took over then we wouldn't be having this discussion now.
A lot of the PS pensioners would have had a 'life plan' based on the job that they signed up to and the rewards at the other end. Very few of them bought helicopters, jaguars or a couple of properties in Europe or Florida. Most of them tipped along at their jobs while all around them fellas were 'making millions' and flashing the cash and regaling anyone that would listen with stories of how well they were doing. Benchmarking brought them in a few bob more, 5 years after the Tiger and her cubs started roaring. Now the food source for the Tiger and her Cubs has dried up so she's hunting elsewhere, chasing the squirrel and his nest egg, carefully collected and stored in preparation for tougher times ahead.

In the last 6 months I must have asked 20 people (All Private sector workers Mid 30s' to Mid 40s') if they took out a private pension. 2 people answered yes. The rest either bought houses as their pension nest-egg or could never see an end to the money coming in so just didn't bother. Who's the fool??
Apparently it doesn't matter - we'll just take it off the squirrel..

kippy

twowheelsonly wrote: »

In the last 6 months I must have asked 20 people (All Private sector workers Mid 30s' to Mid 40s') if they took out a private pension. 2 people answered yes. The rest either bought houses as their pension nest-egg or could never see an end to the money coming in so just didn't bother. Who's the fool??
Apparently it doesn't matter - we'll just take it off the squirrel..

Ok,
If you are trying to insinuate that the public sector worker was smart in providing for their future by "taking out a pension" and "saving" for a rainy day, you'd be mistaken. One of the positives (or negatives, depending on your age and expenses) of the public sector is a no option pension. That is, you have no choice once you join the public sector, your in the pension "scheme" - now its not as good a scheme right now as it once was (you pay in more, you get out less essentially) but its still a fairly defined scheme where your final figure is at least "guaranteed" to a point.
Sadly, for the vast majority of private sector pensions, these terms are not available. (You aren't forced into a scheme and many schemes arent worth a fcuk)
What we, as a country, should be striving for is a "good" pension scheme for ALL, private and public. However we have far too many vested interest groups in financial services to ever allow this to happen.