Croke Park Agreement beyond 2014

Godge

beeno67 wrote: »

At worst pay is staying still for public sector workers WHO ARE NOT GETTING INCREMENTS. Very big difference.

Why are you shouting at me?

bobbysands81

beeno67 wrote: »

At worst pay is staying still for public sector workers WHO ARE NOT GETTING INCREMENTS. Very big difference.

So you want more people unemployed and more families struggling to pay bills?

The 20% pay cut taken by many PS workers is far more beneficial to the State than a similar reduction in the wage of a private sector worker.

beeno67

Godge wrote: »

Why are you shouting at me?

You put those comments in bold. I did likewise

murphaph

RobbieTheRobber wrote: »

Staff were lost through the early retirement scheme and natural wastage from 2008 to end of 2011 the number employed by the state were reduced from 320,000 to 296,900 and the government intend to continue to reduce this number.
The target for 2015 is 282,500.
http://per.gov.ie/2012/03/08/statements-in-dail-on-public-sector-numbers-thursday-8-march-minister-brendan-howlin-td/

I've said it countless times on here: random attrition is no way to reduce headcount if you don't want services to suffer. You amalgamate specific departments and then make the excess staff redundant. You don't just let random people from this and that department leave and then "overburden" the remaining staff in the department. This is an idiotic way of reducing headcount and services will suffer, ie, the workload will not be handled in a timely manner, but rather backlog.

(we keep hearing how over stretched some departments are from folks on here for heaven's sake, hardly aringing endorsement of the practice of reducing headcount through random attrition. targetted redundancies are the only way. redepoloyment was scuppered at the outset with ridiculous limits on distance between posts etc.

Godge

beeno67 wrote: »

You put those comments in bold. I did likewise

Why the caps lock? That is shouting.

Godge

murphaph wrote: »

I've said it countless times on here: random attrition is no way to reduce headcount if you don't want services to suffer. You amalgamate specific departments and then make the excess staff redundant. You don't just let random people from this and that department leave and then "overburden" the remaining staff in the department. This is an idiotic way of reducing headcount and services will suffer, ie, the workload will not be handled in a timely manner, but rather backlog.

(we keep hearing how over stretched some departments are from folks on here for heaven's sake, hardly aringing endorsement of the practice of reducing headcount through random attrition. targetted redundancies are the only way. redepoloyment was scuppered at the outset with ridiculous limits on distance between posts etc.

Have a look at this link to see how the redeployment operates. The toolkit is interesting.




http://www.publicjobs.ie/publicjobs/redeployment.htm;jsessionid=C9E1CC535375890EA2B6F1EF32DBCA27

beeno67

Godge wrote: »

Why the caps lock? That is shouting.

Oh give over for Christ sake

Black Swan

Godge wrote: »

Why are you shouting at me?

beeno67 wrote: »

You put those comments in bold. I did likewise

Godge wrote: »

Why the caps lock? That is shouting.

beeno67 wrote: »

Oh give over for Christ sake

MOD WARNING:
These comments are off-topic, do not contribute to the discussion of the OP, and are "too personal" per charter.

Head The Wall

donalg1 wrote: »

But its not 50% its closer to 25% so its best to use the actual figures when discussing it otherwise the discussion is pointless.

Are you trying to compare the net figures for PS and gross figures for private? Is this the level of discussion?

woodoo

murphaph wrote: »

I've said it countless times on here: random attrition is no way to reduce headcount if you don't want services to suffer. You amalgamate specific departments and then make the excess staff redundant. You don't just let random people from this and that department leave and then "overburden" the remaining staff in the department. This is an idiotic way of reducing headcount and services will suffer, ie, the workload will not be handled in a timely manner, but rather backlog.

(we keep hearing how over stretched some departments are from folks on here for heaven's sake, hardly aringing endorsement of the practice of reducing headcount through random attrition. targetted redundancies are the only way. redepoloyment was scuppered at the outset with ridiculous limits on distance between posts etc.

This can work and is working. People can move into the jobs that are essential and those that aren't as important can be dropped or bundled up and less staff can do them. It is the flexibility afforded by the CPA that allows this to work. People can transfer to different jobs and departments.

murphaph wrote: »

The reality is that the "high earners" in the PS are likely not as overpaid (proportionally) as the "low earners" in the PS.

This has been done to death. The admin staff on 30k are grossly overpaid and should be on more like 25k max. the sheer numbers mean we stand to save much more than if we take from the "higher earners" (though the higher earners who do actually earn more than they would in the private sector should also see reductions of course).

Because you say so makes it true... OK then

Welease

woodoo wrote: »

Because you say so makes it true... OK then

If memory serves it is based on CSO salary data reports.. The reports have been posted here numerous times.

Gurdgiev had something about it, so maybe you can locate the original reports from there (or someone else can post them)..
http://trueeconomics.blogspot.ie/2009/11/economics-21112009-public-v-private.html

Btw.. I'm not getting involved in this arguement, just linking (somewhat) the locations where the data does exist (not sure if post 2009 data exist).. but you could track it down if interested.

padser12345

Godge wrote: »

First point - we are arguing economics not morality.
Second point - social welfare payments are not taxed so there is not a similar effect, if you cut social welfare by €1 bn, you would probably have a net saving of around €800m, if you cut public service pay by €1 bn, you would probably have a net saving or around €300m, a significant difference.
Third point - it has been cut twice already, three times for newcomers and senior people, frozen for the rest while inflation has continued and pay rises have resumed in the private sector so how do you know that there hasn't been enough correction already.

Godge wrote: »

"justification for" is that Public Service Benchmarking Body gave them the salary which has since been reduced by a number of pay cuts. Unless we have a new Benchmarking Body, or you can do the work yourself, how can you argue why they shouldn't have it.

Given that most private sector employers are planning to increase pay this year or next, is it possible we have missed the opportunity already to do a proper correction in public service pay?

Report of the Public Service Benchmarking Body
http://benchmarking.gov.ie/Documents/Benchmarking%2007.pdf - check out "Impact on Public Service Pay" Subsection 4.16........."increasing the costs in the sector and making it less competitive"

Like a lot of poster's sentiment: How can you quantify 'exposure' or lack of it, regards job security in the Pu/S?

regards
Padser

Good loser

Phew, just completed the thread. Fantastically long.

I'm a public service pensioner - over thirty years service!

Have absolutely no grudge against the service or any workers there.

In favour of pay/pension cuts generally; don't see the maths allows there is any way around it. It would be a miracle to get €2.25 billion in cuts in Dec budget without cutting pay. More so the following year. The minuscle growth in GDP/GNP compels cuts.

Agree fully with Tipp Man re comparisons with private sector salaries/cuts/conditions. Utterly irrelevant - because the State is broke. These comparatives can be entertained when the budget is balanced (or 5 years later). To be truly compared private sector companies that are bankrupt ( an oxymoron) should be the comparators!!

Find Godge's maths suspect - reducing gross salary reductions by 70%+ to get net savings to State is absurd. Also as Tipp Man said it is the net pay that matters to the State. [for a non PS Godge spends an inordinate amount of time and effort defending them - union official maybe, or SF?]

As I've said before at least 25% of public servants I know do (or did) little or nothing every day. Also quite a few work 2/3/4 days per week by choice; these would be earning less than €20k - don't see why these should be exempted from wage cuts.

My recipe is 5% per annum across the board wage/pension cuts for the PS for each of the next three years. Same for all SW rates.

Notice the PS defenders concentrate on the % wage cuts (and pension levy) more than defending the current salaries. This maths suits them as
the starting positions were so high.

Anecdotally, in my working years, met people from NI in same job; they couldn't get over the terms and conditions down here.

Farmer Pudsey

donalg1 wrote: »

Anyone that cant see that it was the Private Sector that fcuked this country up is living in cloud cuckoo land.

Of course you are right the Public Sector has no involvement in fcuking uo the country. The unions who sat around the table doing program for government deals, the finiancial regulator, the central bank, the revenue comissioners who had no economist and silienced whistle blowers, all the councils who gave planing all over the place no the public service had no i/p it was the farmers and the tesco workers on the minimum wage.

Godge wrote: »

I have previously said, and I stand over it, because nobody has produced one shred of evidence to disprove it - apart from construction sector and SMEs, there have been little or no pay cuts in the private sector over the last few years.

As for retail salaries, we pay about 50% more than the rest of Europe to our retail workers, but don't worry, I am not calling for their salaries to be cut.

The only reasno we pay more is because we have the highest minimun wage in Europe ( there may be one higher but I cannot find it).

Godge wrote: »

Your argument is just that we can't afford it. Well I happen to disagree. The public service pay bill will fall below €15 bn next year down from nearly €20 bn at the height of the boom. (Ironically, some of the people here who have been arguing for a 25% cut in the pay bill have also been using the out-of-date €20 bn figure and they don't realise they have already got what they are asking for!). No other element of public expenditure has been cut as much. The non-pay element of the health budget (medical cards, drugs etc) has continued to spiral out of control, social welfare spending is still on the rise. To make another saving of €5 bn in the public service pay bill, we would have to pay some people below social welfare rates but that doesn't seem to have occurred to some of the posters here.

No, we don't need more pay cuts for public servants, they won't save us the money and we would run into Greek-like trouble and protests. We do need more productivity and more from Croke Park and we also need to cut numbers further. But it is property taxation, income tax reliefs, cuts in social welfare entitlements (probably through tightening eligibility) and area such as medical cards and the travel pass that we need to make savings.

I agree with you Godge that other elements of expenditure have to be reduced as well as waste eliminated. But we also need to reduce pay in the public service. I believe it is two faced by the Unions that are willing to let new teachers in at drastically reduced rates and yet will not change terms of existing staff.

I also see that the teachers are again selling the fact that they are doing parent/teacher meeting in the evenings. When they want something else in a few years the will again withdraw it and resell it again. I did not use the 20Billion figure instead I used a back of the envelope calculation and my figure was 14.4 billion I underestimated the amount that we should have reduced it by.

There is no fear of PS's being at near welfare rates I advacoted only pay cuts for thr higher paid PS. the average PS wage is 930 euros ( this disregards partial labour units) if it was reduced by 20% it would still be 744 euro's/week. this is still 16-18% ( depending on your method of calculation) higher than the average private sector wage and about 4 times the single welfare rate.

And yes we need to target cuts in benifits and we need cuts in welfare rates. We also need to slighty raise taxation and introduce a property tax.

Godge

Good loser wrote: »

Phew, just completed the thread. Fantastically long.

I'm a public service pensioner - over thirty years service!

Have absolutely no grudge against the service or any workers there.

In favour of pay/pension cuts generally; don't see the maths allows there is any way around it. It would be a miracle to get €2.25 billion in cuts in Dec budget without cutting pay. More so the following year. The minuscle growth in GDP/GNP compels cuts.

Agree fully with Tipp Man re comparisons with private sector salaries/cuts/conditions. Utterly irrelevant - because the State is broke. These comparatives can be entertained when the budget is balanced (or 5 years later). To be truly compared private sector companies that are bankrupt ( an oxymoron) should be the comparators!!

Find Godge's maths suspect - reducing gross salary reductions by 70%+ to get net savings to State is absurd. Also as Tipp Man said it is the net pay that matters to the State. [for a non PS Godge spends an inordinate amount of time and effort defending them - union official maybe, or SF?]

As I've said before at least 25% of public servants I know do (or did) little or nothing every day. Also quite a few work 2/3/4 days per week by choice; these would be earning less than €20k - don't see why these should be exempted from wage cuts.

My recipe is 5% per annum across the board wage/pension cuts for the PS for each of the next three years. Same for all SW rates.

Notice the PS defenders concentrate on the % wage cuts (and pension levy) more than defending the current salaries. This maths suits them as
the starting positions were so high.

Anecdotally, in my working years, met people from NI in same job; they couldn't get over the terms and conditions down here.

(1) I have said repeatedly that I do not work in the public sector, I did previously during my nearly 30 years of employment, again haven't hidden that.

(2) I find the idea that I am a union official or SF deeply insulting

(3) On other threads I have been critical of the lack of change and modernisation in the health sector, I have also been critical of work practices in the education sector in universities and schools. My views are somewhere in the middle.

(4) I hold the view that currently some public sector workers are overpaid, some are correctly paid and some are underpaid. I do not have the expertise to be able to determine which but I have opinions on it and there are some I would argue are overpaid, particularly entry grades. The problem there is more that social welfare is so high that paying a clerical officer less would mean nobody would take the job. The one thing I am clear on is that across the board further pay cuts are not justified by any evidence of what is happening in the private sector or in the EU.

(5) If my maths is suspect, maybe you could explain how. The net point is that if you cut pay, you cut it off the top, off the part that attracts the highest deductions of income tax, pension levy and USC. If you cut it far enough, towards the minimum wage, yes you get into higher rates of return but maybe you could show the maths yourself.

(6) Biggest point of all, cutting public service pay will not deliver huge savings, it is not justified for all, a benchmarking body 3 would be the best approach but are some people prepared if that recommends increases for some grades?

woodoo

Can the next person calling for cuts to public service pay please do some sort of calculation on how much it might save and and especially how much it might shave of the deficit.

Head The Wall

Well considering we are still borrowing billions then every billion not borrowed is a billion saved including the interest.

Farmer Pudsey

woodoo wrote: »

Can the next person calling for cuts to public service pay please do some sort of calculation on how much it might save and and especially how much it might shave of the deficit.

Stop shouting I have done the calculation earlier in this thread I calculated that 3.5-4 billion some poster take the view that only 39% would be off the deficit some calculated. I myself consider that it would be nearer 70%. The reason for this is not all would be at the high rate of taxation. Also some higher paid PS may be using tax avoidance schemes to defer income. Also as we would not be cutting the private sector as much it might give it a boost and improve faster. Any money not cut from services and capital; expenditure would generate more income in the economy. For instance any job created in the private sector or retained in it is worth over 30K revenue to the government.

Take farming any profits made that are not needed for direct income are reinvested within farming except for tractors and combines most other machinery is produced in Ireland and this has lead to a strong agri-machiney export buisness. By the way I am not advocating an investment in agri I am just pointing out that cuts in other area's than PS pay also have a nrgative effect on the economy.

Good loser

woodoo wrote: »

Can the next person calling for cuts to public service pay please do some sort of calculation on how much it might save and and especially how much it might shave of the deficit.

Let's see. Pay and pensions 2011 - €17.127 billion. 5% reduction = €850 m.

Average pay about €45,000. Marginal tax rate c. 20%.

80% of €850 m = €680m net.

Social welfare c. €21 bn. 5% there = €1.05 bn. Total €1.75 bn of €2.25 bn needed in December budget. Practically painless.

The semi states and all quangos should also be cut and savings paid directly to State as a special dividend, or subventions reduced by the amount. And Local Authorities.

That's year 1.

ardmacha

80% of €850 m = €680m net.

Like a lot of people are not paying the higher rate of tax.
How do you account for the USC, Pension levy and pension contributions as noted by Godge previously?

barneystinson

I think they need to set up a new benchmarking process, overhaul entire grade structures in some areas, redefine roles so as to replace what in the current system are higher managers (PO's on 80-100k) with middle managers (AP's on 65-80k), and consider increasing the number of grades in some departments.

Comparing HMRC in UK with Revenue in Ireland for example, there are 8 grades in HMRC which are equivalent to 4/5 grades in Revenue up to middle management (AP) level here (they obviously have a different structure so it's hard to do a head to head comparison). The middle managers' salaries seem pretty equivalent between the two, but the 2 lowest paid HMRC grades start and end substantially below the CO scale over here. This suggests to me that in that specific case it's the lower paid civil servants here who are being overpaid...

I also noted that HMRC negotiate their own salary scales with their employees' unions, rather than the rates being uniform rates across the entire Civil Service - could there be a benefit to making each Dept operate a standalone structure here, or some Departments? It might reduce the power of the Unions if they had to negotiate with several Departments separately, and that could only be a good thing..! (Following the UK might not be such a great idea though, as HMRC seem to be much criticised, while our Revenue are generally regarded as about the best of our Govt departments.)

I think a cut of 3% across the board, maybe rising to 5% on the income in excess of 50k would be reasonable about now. Based on the distribution of the various grades where I work, my rule of thumb calculations suggest this would be a reduction in the gross pay of about 3.2%, and a reduction in net pay of about 2%. (The proportionate saving would be higher in areas like health and semi-states where wages are higher.) Cut by much more than that and it's arguable you might not get any net benefit to the economy, through reduced spending by the affected families, and an increase in mortgage defaults.

What I don't support is freezing of increments - performance management systems need to be properly implemented and run so that the bottom 10-15% of staff aren't getting an increment, so that the system can actually have some credibility and not be seen as a pay-rise just for turning up - but freezing increments without touching the pay of people who are already at the top of their scales would have a very demotivating effect on people recently recruited / promoted, who are actually most likely to be the best performing workers.

ParkRunner

Good loser wrote: »

Let's see. Pay and pensions 2011 - €17.127 billion. 5% reduction = €850 m.

Average pay about €45,000. Marginal tax rate c. 20%.

80% of €850 m = €680m net.
.

The reality is that any cut will be offset immediately by at least 33% of tax, usc, and pension contributions as calculated on http://taxcalc.eu/ for an average wage. A paycut will qualify many more public service workers for FIS and there will also be a reduced VAT intake. True it will reduce our crippling borrowings and interest payments but not by as much as people may think.

The reasons I would be against cutting pay are 1) the net savings made will be ultimately marginal as seen by the result to date of previous cuts 2) Any goodwill that is left in the public service will be lost, staff will be demoralised and given the lack of opportunities for promotion and pay increases it will be the good hard working staff who will leave the public service 3) inflation and interest rates will rise, thus devaluing the net pay taken home 4) the net paybill will effectively be cut by the additional taxes and levies brought in by the next budget 5) demand for public services has increased substantially in the recession and there is less staff available to manage the extra demand.

While the Croke Park agreement is not perfect it has achieved quite a lot in bringing about sweeping reforms in work practices and structures. As the number of public servants employed decreases staff at lower grades have been given more responsibilities and a higher workload with no extra pay. The Croke Park agreement also gives some stability and consumer confidence in the domestic economy. The now daily calls for paycuts will do nothing to help the domestic economy as those who do have some disposable income will hold off spending it.

If as many hours were spent working productively as is spent analysing, re-analysing criticising and reporting on the public service, this country would recover a lot quicker. It is disheartening to see so much time wasted on FOI requests, PQ's coming in, only to be copied and pasted onto the front page of a rag paper. Paycuts may appease the Indo brigade temporarily but I have yet to see a well reasoned and forensic argument to show that cutting pay is what is needed to bring about a recovery and economic growth, especially as the net cost of public service pay has already significantly fallen as a result of paycuts, levies, early retirements and additional taxes and charges paid by everyone.

ncdadam

donalg1 wrote: »

Anyone that cant see that it was the Private Sector that fcuked this country up is living in cloud cuckoo land.

And the PS benchmarked itself to the very same private sector (on the way up)!

HellFireClub

woodoo wrote: »

Can the next person calling for cuts to public service pay please do some sort of calculation on how much it might save and and especially how much it might shave of the deficit.

It's fairly simple really, we are borrowing 55 Million Euro a day to run the place, so that's what we need to stop spending every day, over and above what we can afford. Obviously, the majority of the cost of running the country is going on Celtic Tiger salaries that we agreed back in the boom. The boom wasn't sustainable, so the salaries that were agreed back in the boom are not sustainable.

We don't need any consultants reports, or any sexy calculations as you've requested, we just need someone to have the guts to finally deal with the elephant in the room which as everyone knows, is PS pay. Also, we need to stop trying to "shave" a bit here and a bit there, this fánnying around is just prolonging the problem.

kippy

Farmer Pudsey wrote: »

Stop shouting I have done the calculation earlier in this thread I calculated that 3.5-4 billion some poster take the view that only 39% would be off the deficit some calculated. I myself consider that it would be nearer 70%. The reason for this is not all would be at the high rate of taxation. Also some higher paid PS may be using tax avoidance schemes to defer income. Also as we would not be cutting the private sector as much it might give it a boost and improve faster. Any money not cut from services and capital; expenditure would generate more income in the economy. For instance any job created in the private sector or retained in it is worth over 30K revenue to the government.

Take farming any profits made that are not needed for direct income are reinvested within farming except for tractors and combines most other machinery is produced in Ireland and this has lead to a strong agri-machiney export buisness. By the way I am not advocating an investment in agri I am just pointing out that cuts in other area's than PS pay also have a nrgative effect on the economy.

You don't think that cutting the pay of 300000 odd public servants won't have some indirect negative effects as well?
Indeed some would say that there have been massive indirect effects of the wage and indeed budget cuts in the public sector already, in the rest of society.

Are you stating that the government should shave 3.5-4 million gross of the public pay bill or is it net you are looking at?

woodoo

HellFireClub wrote: »

It's fairly simple really, we are borrowing 55 Million Euro a day to run the place, so that's what we need to stop spending every day, over and above what we can afford. Obviously, the majority of the cost of running the country is going on Celtic Tiger salaries that we agreed back in the boom. The boom wasn't sustainable, so the salaries that were agreed back in the boom are not sustainable.

We don't need any consultants reports, or any sexy calculations as you've requested, we just need someone to have the guts to finally deal with the elephant in the room which as everyone knows, is PS pay. Also, we need to stop trying to "shave" a bit here and a bit there, this fánnying around is just prolonging the problem.

So you have no answer. Its back to the language of celtic tiger salaries etc. We do need "sexy calculations" as you call them. The people need to be told what cuts to the public service would do to improve the deficit. The likes of the indo have been banging on about cutting PS pay for years, as have many here. We need to see more detail and less bluster.

OMD

woodoo wrote: »

So you have no answer. Its back to the language of celtic tiger salaries etc. We do need "sexy calculations" as you call them. The people need to be told what cuts to the public service would do to improve the deficit. The likes of the indo have been banging on about cutting PS pay for years, as have many here. We need to see more detail and less bluster.

A 10% cut across the board in PS salaries would not only have a substantial effect on our public spending, and therefore reduce our borrowing, it also reduces pensions. This has the effect of reducing the pensions we will have to pay public sector workers over the next 50 years or so as pensions are still linked to salary. The overall effect of this is to massively improve our standing with the bond markets as it shows we are making decisions for sustainable reductions in expenditure with effects faro to the future. It is hard to quantify how much this would reduce the interest rate but it would have a very positive effect on them. Every 1% reduction in interest rates we pay would equate to €1,3000,000,000 a year if applied to the entire debt. It is not sufficient to only look at how much a decision effects our income & expenditure but how that decision is perceived outside Ireland

Germany may not be our master but the bond market is.

ncdadam

OMD wrote: »

A 10% cut across the board in PS salaries would not only have a substantial effect on our public spending, and therefore reduce our borrowing, it also reduces pensions. This has the effect of reducing the pensions we will have to pay public sector workers over the next 50 years or so as pensions are still linked to salary. The overall effect of this is to massively improve our standing with the bond markets as it shows we are making decisions for sustainable reductions in expenditure with effects faro to the future. It is hard to quantify how much this would reduce the interest rate but it would have a very positive effect on them. Every 1% reduction in interest rates we pay would equate to €1,3000,000,000 a year if applied to the entire debt.

Germany may not be our master but the bond market is.

The sooner this government grow a pair and knock 10% or more from PS pay and welfare, the sooner this country will meet its targets and regain it's sovereignty.
Labour are holding FG to ransom, we would be better off with a single party government.

skafish

beeno67 wrote: »

Don't forget you can have notional years which are basically extra years added on for free. This way you get a pension based on more years than you have actually worked.

In addition to this you can buy extra years which basically is as it says you buy added years to bring your pension to the full 40 years even if you have worked substantially less than this.

More uninformed BS. Anybody in the PS can purchase extra years, so called notional service. It is a system designed to allow those people who join after the age of 25, and who therefore won't have served the 40 years required to achieve a full prnsion by age 65. The important word here is purchase. Believe me, it is not a cheap option. It just means that people, like me, who didn't join the PS in our 20s can make regular contributions to our pension fund to achieve the equivalent of 40 years service at age 65, or whatever the retirement age is now.
The reason for the 40 year mark is simple... after 40 years contributions, your pension has hit its maximum, it doesn't increase after that no matter how many extra contributions you make.

Anybody in the private sector can do exactly the same.... you contribute to a ension scheme, and you decide when you want it to mature. Obviously, the larger the pension you want, and the earlier you want to retire, the more you have to pay in.

OMD

skafish wrote: »

Anybody in the private sector can do exactly the same.... you contribute to a ension scheme, and you decide when you want it to mature. Obviously, the larger the pension you want, and the earlier you want to retire, the more you have to pay in.

It is not true to say anybody in the private sector can do exactly the same. In fact the vast majority cannot. Private sector workers can have pensions and make extra contributions. However the benefit of these extra contributions on retirement is not linked to final salary. Also private sector pensions do not then rise as public sector pay rises. The difference is massive.

Head The Wall

How expensive is it to buy a year, say somebody is receiving a pension of 50k a year, do they pay 50k for it? Because if they don't then the taxpayer is who ends up paying for it as pensions come out of the current account.

Taxpayers don't pay for pensions in private companies so I don't know what you are referring to them for.

Gumbo

Head The Wall wrote: »

How expensive is it to buy a year

I was quoted 13k for one years service. I would have to live for 19.6 years after retirement to benefit from it. Every year you buy, you buy 1/80th of your pension entitlement.

Head The Wall wrote: »

say somebody is receiving a pension of 50k a year, do they pay 50k for it?

Why should they, if you buy a year, you only have to pay for the one years portion. If somebosy is getting 50k as a pension (which is mega btw), then ones years payment withh be only 1/80th of that ie. €625.00

Head The Wall wrote: »

Taxpayers don't pay for pensions in private companies so I don't know what you are referring to them for.

But as tax payers, we gain fro tax breaks and tax allowances on pension payments, so the tax payer is kinda funding a portion of all pensions, PS and PrvS.

OMD

kceire wrote: »

[

I was quoted 13k for one years service. I would have to live for 22 years after retirement to benefit from it. Every year you buy, you buy 1/80th of your pension entitlement.
.

That is not really the way to look at it. What pension would 13k get you if invested in a private pension scheme or AVC and how does that compare to the benefits of buying the extra years service?

Gumbo

OMD wrote: »

That is not really the way to look at it. What pension would 13k get you if invested in a private pension scheme or AVC and how does that compare to the benefits of buying the extra years service?

the 13k in cash would be a better move than buying the extra one year in my opinion.

In my case it would be an extra €575 per year in pension payments (€11 per week) and an extra €1725 in lump sum (once off).

so (13000-1725)/575 = 19.6 years before i get a penny for free. I would rarther the 13k in my hand at the start tbh.

Farmer Pudsey

kippy wrote: »

You don't think that cutting the pay of 300000 odd public servants won't have some indirect negative effects as well?
Indeed some would say that there have been massive indirect effects of the wage and indeed budget cuts in the public sector already, in the rest of society.

Are you stating that the government should shave 3.5-4 million gross of the public pay bill or is it net you are looking at?

It will have but it will have less of an effect than other cuts. Look at the health cuts part of that is from Home Helps and PA . These are paid between 9 and 15 euro's/hour depending on if they were private contracted or directly employed. I would content that the cuts be graduated on pay from above 40K starting @5% and climbing to 40% on income over 100K and 50% on income over 150K. It would have to be targeted for example Consultants are vastly overpaid compared to there counterparts in Germany.

You can only deal in gross figures as that is how pay is calculated. This crap about net pay is a blind alley that I will not go down. It looks like that this year the PS pay bill will be around 16 million. There is no reason that 25% cannot be shaved of it in 2-3 years.

beeno67

kceire wrote: »

OMD wrote: »

That is not really the way to look at it. What pension would 13k get you if invested in a private pension scheme or AVC and how does that compare to the benefits of buying the extra years service?

the 13k in cash would be a better move than buying the extra one year in my opinion.

In my case it would be an extra €575 per year in pension payments (€11 per week) and an extra €1725 in lump sum (once off).

so (13000-1725)/575 = 19.6 years before i get a penny for free. I would rarther the 13k in my hand at the start tbh.

That's €575 in today's money. The actual amount in 20-30 years time will be a lot more. Plus with a PS pension the pension will continue to rise a PS wages rise which is usually above the rate if inflation. So to be honest the 19.6 years has no bearing in reality. In addition if you are married then your husband continues to get a pension even after you die.

Gumbo

beeno67 wrote: »

That's €575 in today's money. The actual amount in 20-30 years time will be a lot more. Plus with a PS pension the pension will continue to rise a PS wages rise which is usually above the rate if inflation. So to be honest the 19.6 years has no bearing in reality. In addition if you are married then your husband continues to get a pension even after you die.

I would rather put the 13k into an AC with decent interest rate and have access to it when needed on retirement tbh.

Im sure the high earners make it worthwhile to buy a couple of years, but lets be honest, the average PS member isint gona splash out 13k for one years service or to make it worth while, you would need to add a few years to make the impact.

plus PS salaries only rise with increments, which opun retirement, you will be on the max one available. I cant see any more PS wage increases anythime soon.

sarumite

kceire wrote: »

I would rather put the 13k into an AC with decent interest rate and have access to it when needed on retirement tbh.

Genuine question here, more out of interest than anything. Though would you need to put in 13K plus tax (i.e. closer to 18-19K) to have the same benefit as putting 13k into a pension?

kippy

sarumite wrote: »

Genuine question here, more out of interest than anything. Though would you need to put in 13K plus tax (i.e. closer to 18-19K) to have the same benefit as putting 13k into a pension?

I think it depends on your income and things have changed in the past few years with respect to tax breaks on pensions in general, but yes, something close enough to that.

kippy

beeno67 wrote: »

That's €575 in today's money. The actual amount in 20-30 years time will be a lot more. Plus with a PS pension the pension will continue to rise a PS wages rise which is usually above the rate if inflation. So to be honest the 19.6 years has no bearing in reality. In addition if you are married then your husband continues to get a pension even after you die.

Whats your point?
Private sector pensions never rise?

Godge

ardmacha wrote: »

Like a lot of people are not paying the higher rate of tax.
How do you account for the USC, Pension levy and pension contributions as noted by Godge previously?

You don't account for it, you keep pretending that one billion off the pay bill is one billion in savings.

You also keep pretending that reducing pay by 10 or 20% more will have no effect on public servants, that they will all keep working away no bother.

If you are an armchair accountant, none of that matters, you can keep typing on your keyboard, cut their pay, cut their pay.

Japer

femur61 wrote: »

In order to keep teachers on their inflated wages we are loosing SNAs, lack of resorces in the classroom. Beds in hospitals are being closed, home help and home care is affected. the careers allownaceis decimated - all to keep the upper echoleons of the PS with an inflated wage.

Well said, and do not forget the tens of billions of euro we are borrowing to pay the inflated wages and pensions of the public sector - money which will have to be repaid by future generations of Irish people.

kippy

Japer wrote: »

Well said, and do not forget the tens of billions of euro we are borrowing to pay the inflated wages and pensions of the public sector - money which will have to be repaid by future generations of Irish people.

So it's the fault of existing public servants that services are being cut and that we've had to have a bailout?
No fault lies elsewhere obviously.

Farmer Pudsey

Godge wrote: »

You don't account for it, you keep pretending that one billion off the pay bill is one billion in savings.

You also keep pretending that reducing pay by 10 or 20% more will have no effect on public servants, that they will all keep working away no bother.

If you are an armchair accountant, none of that matters, you can keep typing on your keyboard, cut their pay, cut their pay.

And you keep pretending that there will be little or no savings. We need to cut over 10 billion in the next three budgets. All of this cannot come from tax Increases or from cuts.

A property tax averaging 750/house will rise about 1.5 billion. Maybe another 500 million from Water charges. Will we manage another 2Billion from the welfare budget. This gives 4 Billion. Tax Increases Vat, cigarette's Motor tax, car fuel are not going to raise much more unless we get an upturn in the economy. In 2008 when austerity started it was presumed that we would be back to growth of around 3% now. The reality I think that for the next three years projected growth is expected to be around 1%/year . As far as I can see the only excise duty that may raise money is a substantial duty on supermarket sold drink with the prices at an all time low it may be possible to put up to 1 euro/bottle of wine and 30 cent/can of lager how much will it raise I do not know.

At present Income tax raises around 15 billion/year a 10% raise will raise 1.5 billion. Can Health and Education deliver another billion with out pay cuts. This would get us to around 7 Billion We will be short 3 billion. As growth of 1%/year will not create jobs I think that we will net to find a couple billion from PS pay as you are all pointing out you need to cut 2 to get 1, this is if there are not significent numbers exiting the PS. Maybe if there was substantial pay cut at the top of the PS some of these who people think are able to get better paid in the private sector will leave, hey presto there is is 60-70% return on pay cuts over 2 billion from 3 billion in cuts. All these public relation guru's HR guru's etc will be snapped up by the private sector I will have to wake up soon I am dreaming

Japer

kippy wrote: »

So it's the fault of existing public servants that services are being cut and that we've had to have a bailout?
No fault lies elsewhere obviously.

It was those who are paid the the public purse - the public servants ie the government, the regulator, the central bank, the dept of finance - to regulate the economy. Anyone who broke the law should be jailed. It was the public servants duty to set and uphold the laws and regulate the economy. So yes, its the public services fault - specifically those at the top of the public service (inc the ex govt ) for f**king up the country / allowing it to slide in to the state its in ( IMF bailout etc ) despite over 3 decades of huge EC handouts and structural funds, loans etc.

The second point is its very im-moral for the middle and top of the public service to be overpaid + overpensioned sio much, as we all know they are.

beeno67

kippy wrote: »

beeno67 wrote: »

That's €575 in today's money. The actual amount in 20-30 years time will be a lot more. Plus with a PS pension the pension will continue to rise a PS wages rise which is usually above the rate if inflation. So to be honest the 19.6 years has no bearing in reality. In addition if you are married then your husband continues to get a pension even after you die.

Whats your point?
Private sector pensions never rise?

With a private pension, at the end of your working life you have a pension fund. This is made up of the money you invested, less charges plus growth in the fund. With this money you buy an annuity which is basically pays you a sum of money every month. You can buy Different types of annuity. If you want to buy one that goes up every year you have to pay extra. Generally speaking the pension will then rise at 5% a year but obviously you then get a lot less at the start. Also you can buy an annuity that will continue to pay out to your spouse if you die first but again it costs more which means you get a lower pension.
The financial times have an article showing the kind of rates you can get in the UK. Irish rates would be pretty similar.
http://www.ft.com/personal-finance/annuity-table
So you can see if you wanted a pension that rose 3% a year (and remember on average public sector pay rises well above this every year) and let your spouse have a 50% pension on your death it will cost you a lot. If you had a pension fund of 500,000 it would give you a pension of about 18,000 a year assuming you retire at age 65. Again if you wanted the tax free lump sum as well as a pension of 18,000 a year you would have to have a substantially larger pension fund.

kippy

Japer wrote: »

It was those who are paid the the public purse - the public servants ie the government, the regulator, the central bank, the dept of finance - to regulate the economy. Anyone who broke the law should be jailed. It was the public servants duty to set and uphold the laws and regulate the economy. So yes, its the public services fault - specifically those at the top of the public service (inc the ex govt ) for f**king up the country / allowing it to slide in to the state its in ( IMF bailout etc ) despite over 3 decades of huge EC handouts and structural funds, loans etc.

The second point is its very im-moral for the middle and top of the public service to be overpaid + overpensioned sio much, as we all know they are.

So about 500 people (at a maximum I would expect) out of 300000 are at fault. Yep, thats a reason for hanging them all........

I'd agree with that post in general being honest. What really pisses me off about this whole mess is the lack of investigations, lack of court appearances and lack of jail time for those at fault and yes, there are a portion of key people in the public service at fault who should be taken to account for it.

Is it not the fault of the Irish electorate in general for voting in consecutive FF governments, who essentially set the policy?
Is it not the fault of the EU who have ultimate oversight on how funds are spend?
Is it not the fault of the greed of a certain number of senior bankers and developers?
Is it not the fault of posters here and elsewhere for not getting up from their keyboards and doing something about it?

kippy

beeno67 wrote: »

With a private pension, at the end of your working life you have a pension fund. This is made up of the money you invested, less charges plus growth in the fund. With this money you buy an annuity which is basically pays you a sum of money every month. You can buy Different types of annuity. If you want to buy one that goes up every year you have to pay extra. Generally speaking the pension will then rise at 5% a year but obviously you then get a lot less at the start. Also you can buy an annuity that will continue to pay out to your spouse if you die first but again it costs more which means you get a lower pension.
The financial times have an article showing the kind of rates you can get in the UK. Irish rates would be pretty similar.
http://www.ft.com/personal-finance/annuity-table
So you can see if you wanted a pension that rose 3% a year (and remember on average public sector pay rises well above this every year) and let your spouse have a 50% pension on your death it will cost you a lot. If you had a pension fund of 500,000 it would give you a pension of about 18,000 a year assuming you retire at age 65. Again if you wanted the tax free lump sum as well as a pension of 18,000 a year you would have to have a substantially larger pension fund.

I am fully aware how pensions work (and I believe there is considerable area for improvement when it comes to pensions (Public, Private and OAP/COAP) in this country.


You'd swear public sector workers paid nothing towards their pension and their employer shouldn't pay anything either.
Public sector wages haven't risen by 3% a year for the last 3 years either btw.



And my point, pension funds generally rise in value over the longer term holds.

barneystinson

Japer wrote: »

The second point is its very immoral for the middle and top of the public service to be overpaid + overpensioned so much, as we all know they are.

So this old chestnut rolls out again.

How far overpaid are these groups? Is this your gut feeling, or have you got a source you're not sharing?

And why do you believe that the lower end of PS staff, which makes up the majority in both numbers and payroll cost, are not overpaid? Is this your gut feeling, or have you got a source you're not sharing?

Japer

kippy wrote: »

So about 500 people (at a maximum I would expect) out of 300000 are at fault.

but much more than 300,000 public servants and public service pensioners have beneffitted from the doubling of the public service wage + pensions bill in the space of ten years. The top 300 people in the public sector / on public sector pensions are extraordinarilty well rewarded for the mess they made....