Entitlement Culture killing the will to work in Ireland

Scofflaw

creedp wrote: »

I think the former is a very valid criticism of Kenny. I tried to say this on another thread but for some reason it didn't register .. must have made a mess of submitting it.

I can't understand how Kenny, elected at 24 years of age, could continue to block a teachers job for himself. Presumably he continued to be paid his full salary including those infamous increments and summer holiday pay while paying a subbie to do the work for him at a lower rate and possibly having to sign on for the summer. No wonder the jobbridge initiative appealed to him. I wonder did he retitre from teaching and what pension he was entitled to? How many pensions will that be in total? Easy for him to be telling lads to take the hard decisions .. serious entitlement culture ... serious lack of credibility.

And a serious lack of facts, which a couple of minutes with Google would have sorted out. He resigned years ago, making his permanent position available, and so obviously doesn't draw the salary. He has claimed he doesn't draw from the pension:

During his speech today (21-02-2011), Mr Kenny turned directly to the topic saying: 'I have not drawn one cent from my teaching position in over two decades.' He said he had resigned from his post many years ago and it had been filled by a 'full-time' teacher.

Entertainingly, I see that Michael Martin actually did still hold his position as a teacher at the time he was attacking Kenny for holding his:

On Newstalk this morning (21-02-2011), MM said he would resign his teaching post at the end of the school year. The person 'subbing' for him will lose their job, but a vacancy for a permanent position arises.

Both points are from the GE campaign in 2011.

cordially,
Scofflaw

clairefontaine

Scofflaw wrote: »

Politics is negotiation. When it's self-interested, it forms your definition of 'politics', but it's always about negotiation and compromise. As to who negotiated in NI, you should talk to the people who were involved in the negotiations. It wasn't Clinton or a US senator who made the progress.

Your criticism of the current government, who did not negotiate the bailout or the programme, seems to be that they didn't negotiate the bailout or the programme to your satisfaction. That's an odd criticism, frankly.

cordially,
Scofflaw

No progress was made for years until Kennedy Smith was the ambassador and made things happen.

It would have continued forever.

Without Mitchell, no bridges would have been built.

golfwallah

clairefontaine wrote: »

No progress was made for years until Kennedy Smith was the ambassador and made things happen.

It would have continued forever.

Without Mitchell, no bridges would have been built.

We’re drifting a bit off topic here, but I’d agree that negotiation is a key ingredient in politics. I’d also take the view that a lot of people (from Ireland North & South, USA and UK), and not just those from the USA, played important negotiation roles on the road to getting us to where we are on the Northern Ireland.

However, that is not really the point.

Politics is not just about negotiation – it requires the courage to clearly identify the critical issues & choices, to make the right long term choices, communicate them to the public, get majority support and implement them.

We simply can’t negotiate our way out of our current economic problems, particularly when the deficit is being increased day by day through unaffordable current spending that requires more and more borrowing. Nor can we unravel decisions made in the past.

The issue is clear to me. As a country, government is spending way beyond what we can afford and the banking system is not providing enough investment to new ventures that will generate future wealth and improved living standards.

Unfortunately, FG in government is hamstrung by Labour, whose driving force is protection of the status quo, i.e. PS pay & conditions and social welfare, while hoping somehow that growth will happen and gradually take care of the deficit.

I’d much prefer to see clear leadership and positive action than the current policy of “muddle along”, re-negotiate a few loans but, whatever you do, don’t touch the Labour sacred cows of welfare and PS pay.

ardmacha

PS pay has been cut 3 times, while private pay is increasing. Yet some posters here manage to imply that PS pay is untouched, although they know otherwise.

Scofflaw

golfwallah wrote: »

We’re drifting a bit off topic here, but I’d agree that negotiation is a key ingredient in politics. I’d also take the view that a lot of people (from Ireland North & South, USA and UK), and not just those from the USA, played important negotiation roles on the road to getting us to where we are on the Northern Ireland.

However, that is not really the point.

Politics is not just about negotiation – it requires the courage to clearly identify the critical issues & choices, to make the right long term choices, communicate them to the public, get majority support and implement them.

We simply can’t negotiate our way out of our current economic problems, particularly when the deficit is being increased day by day through unaffordable current spending that requires more and more borrowing. Nor can we unravel decisions made in the past.

I'd agree - and it's when faced with non-negotiable problems that Irish governments are at their weakest. Issues that you can't talk your way out of, or around, require a whole different skillset, and one which is largely lacking in an Irish political landscape dominated by lawyers and other talkers.

golfwallah wrote: »

The issue is clear to me. As a country, government is spending way beyond what we can afford and the banking system is not providing enough investment to new ventures that will generate future wealth and improved living standards.

Unfortunately, FG in government is hamstrung by Labour, whose driving force is protection of the status quo, i.e. PS pay & conditions and social welfare, while hoping somehow that growth will happen and gradually take care of the deficit.

I’d much prefer to see clear leadership and positive action than the current policy of “muddle along”, re-negotiate a few loans but, whatever you do, don’t touch the Labour sacred cows of welfare and PS pay.

To be fair, they're not just Labour sacred cows - they tend to be sacred cows everywhere. However, I don't think one can avoid noting that the cuts to PS pay largely took place under the previous Fianna Fáil/Green government rather than the current Fine Gael/Labour one, and it's hard to see Fine Gael as behind that.

cordially,
Scofflaw

golfwallah

ardmacha wrote: »

PS pay has been cut 3 times, while private pay is increasing. Yet some posters here manage to imply that PS pay is untouched, although they know otherwise.

The one big difference is that private sector pay increases are happening in those individual businesses that are profitable (i.e. where income exceeds expenditure).

Employees in private firms that make losses generally do not receive pay increases, because this would require employers to borrow money they don't have or fund the increases from reserves (i.e. prior year profits). These employees are also at grave risk of losing their jobs and suffering reduced pensions, if the losses continue beyond a point where cash flow becomes a problem.

PS pay, on the other hand, does not have to be cut in line with government deficits because the government is able to borrow on the strength of future taxation. Additionally, their jobs and pensions are safe.

And by the way, I have not inferred that PS pay is untouched.

ardmacha

If a private company has demand for their products, but are providing them in an unprofitable way, then they increase the price. PS pay cuts bear no comparison with the private sector, but are simply an extra tax on a minority levied by venal politicians trying to curry favour with a selfish electorate.

Scofflaw

golfwallah wrote: »

The one big difference is that private sector pay increases are happening in those individual businesses that are profitable (i.e. where income exceeds expenditure).

Employees in private firms that make losses generally do not receive pay increases, because this would require employers to borrow money they don't have or fund the increases from reserves (i.e. prior year profits). These employees are also at grave risk of losing their jobs and suffering reduced pensions, if the losses continue beyond a point where cash flow becomes a problem.

PS pay, on the other hand, does not have to be cut in line with government deficits because the government is able to borrow on the strength of future taxation. Additionally, their jobs and pensions are safe.

And by the way, I have not inferred that PS pay is untouched.

On the other hand, the reason that it happens that way is because while companies are intended to create profits for their owners, public services are meant to provide services to the public.

The measure of one is the amount of profit it generates, and the only reason for not delivering awful service is because it might reduce profitability. The measure of the other is how good the services it delivers to the citizens are, and the only reason for not borrowing to do so is that the cost of doing so might impact future service provision.

The question of whether better-paid public servants deliver better or worse services than worse-paid ones is not an open and shut question, and the measurable outcome for public services is the public service they provide - on top of which neither welfare nor the public service payroll are necessarily simply costs.

cordially,
Scofflaw

wexie

ardmacha wrote: »

If a private company has demand for their products, but are providing them in an unprofitable way, then they increase the price or efficiency

you missed an important bit

golfwallah

Scofflaw wrote: »

I'd agree - and it's when faced with non-negotiable problems that Irish governments are at their weakest. Issues that you can't talk your way out of, or around, require a whole different skillset, and one which is largely lacking in an Irish political landscape dominated by lawyers and other talkers.


To be fair, they're not just Labour sacred cows - they tend to be sacred cows everywhere. However, I don't think one can avoid noting that the cuts to PS pay largely took place under the previous Fianna Fáil/Green government rather than the current Fine Gael/Labour one, and it's hard to see Fine Gael as behind that.

cordially,
Scofflaw

I'd agree with most of your post, except the bits about:

• tending to be sacred cows everywhere ...... Err... What about Welfare Caps in the UK?
• Hard to see FG as behind that ..... no, I think you may have misunderstood my point that Labour are behind FG's inability to tackle the sacred cows of Welfare & PS Pay costs.

golfwallah

ardmacha wrote: »

If a private company has demand for their products, but are providing them in an unprofitable way, then they increase the price. PS pay cuts bear no comparison with the private sector, but are simply an extra tax on a minority levied by venal politicians trying to curry favour with a selfish electorate.

Err ..... I don't think so ..... ever heard of competition? This prevents price rises in unprofitable firms ...... otherwise increasing prices will simply drive customers away and the unprofitable firms go out of business.

And no again to your second point, as not implementing pay cost reduction is simply an extra tax on the majority, who will use their votes to punish an ineffective government, that can see no alternative but to increase taxes and borrow to solve budget deficits.

Scofflaw

golfwallah wrote: »

I'd agree with most of your post, except the bits about:

• tending to be sacred cows everywhere ...... Err... What about Welfare Caps in the UK?

Hence "tend"!

• Hard to see FG as behind that ..... no, I think you may have misunderstood my point that Labour are behind FG's inability to tackle the sacred cows of Welfare & PS Pay costs.

Actually, it's agreeing with your point - the cuts happened largely under the previous government, and it's unlikely that in the current government it's FG dragging its feet on those issues, which leaves the likely source of the resistance as Labour.

cordially,
Scofflaw

Idbatterim

Labours support has collapsed, but in fairness, they have done pretty much as well, as can have been expected... There hasnt been any major reform, or welfare cuts and the PS havent been targeted again...

jimmycrackcorm

I think the biggest problem with addressing welfare reform is how to address it. The topic comes up more into the social spectrum of discussion slap bang in the middle of the worst economic crisis since the beginning of the state and people now clamour most for action.

Why not this level of disparagement in the hight of the Boom? Obviously no one cared then but now, with a somewhat 300k extra people on the dole, everyone seemingly wants to snipe at people who have the lowest hope of improvement at present.

I don't doubt the problems in the welfare culture at present; Scofflaw made a point about the op referring to anecdotes instead of hard facts. However, I seriously doubt that there isn't a single person who doesn't know of someone who is benefiting from welfare because of the way the system is set up.

The big problem to address it is that this is the worst possible time to do it. Instead we should recognize these problems and set a plan in place to fix them in the future. Give people time to adjust and get over this recession. Pick ten years for example; We should be saying that in ten years time, the system wont be geared to be a lifestyle choice, that the longer you are on it the less benefit you get but the more opportunity you should have to improve and work.

We're stuck in a trap because it is seen as too difficult to make any decisions other than short-term ones. While we wer enjoying the boom, we should have pushed those decisions.

johnr1

My summer employment ended in late October. I then went on hols for ten days.

I arrived home on Sat night last, went out Monday and got a job. Started Tuesday morning. It's full time, more than double the min wage, and will see me through to March again when my summer job recommences.

How does this this sit with the "BUT THERE ARE NO JOBS!!!!" crew who post this inanity in virtually every thread about people on the dole not wanting to work.

My hole there are no jobs, - no workers more like. Just parasites.

skafish

johnr1 wrote: »

My summer employment ended in late October. I then went on hols for ten days.

I arrived home on Sat night last, went out Monday and got a job. Started Tuesday morning. It's full time, more than double the min wage, and will see me through to March again when my summer job recommences.

How does this this sit with the "BUT THERE ARE NO JOBS!!!!" crew who post this inanity in virtually every thread about people on the dole not wanting to work.

My hole there are no jobs, - no workers more like. Just parasites.

Fair play for going out and finding yourself a job instead of sitting on your arse.
While I think your language is a bit emotive, I also applaud the realization that there are jobs available. I doubt there are enough to bring about an end to the unemployment situation, however.

That being said, every new job created contributes to the creation of other new jobs through increased spending in the economy.

Its a pity more people don't share your attitude

golfwallah

Scofflaw wrote: »

On the other hand, the reason that it happens that way is because while companies are intended to create profits for their owners, public services are meant to provide services to the public.

The measure of one is the amount of profit it generates, and the only reason for not delivering awful service is because it might reduce profitability. The measure of the other is how good the services it delivers to the citizens are, and the only reason for not borrowing to do so is that the cost of doing so might impact future service provision.

The question of whether better-paid public servants deliver better or worse services than worse-paid ones is not an open and shut question, and the measurable outcome for public services is the public service they provide - on top of which neither welfare nor the public service payroll are necessarily simply costs.

cordially,
Scofflaw

I think you may be mixing cause and effect here.

When private companies provide value to their customers (cause), they become profitable (effect). And when that value is unique (and not just another “me too” operation), they become even more profitable, or will be perceived as being likely to become so in the future. There is also the impact of competition, which requires such companies to be cost-effective, innovative and responsive to changing customer / market needs. Examples are: CRH, Kerry Group, Ryanair, DCC, Glanbia, Paddy Power, etc.

I’d agree that it is a bit more difficult to measure value for money and effect change in the Public Service .... but it isn’t impossible. The main factors behind these difficulties are the absence of a pricing mechanism and competition, the inability of management to deal effectively with trade unions and inertia brought about by government /local authority ability to put off change through tax increases and borrowing. Yes, we are seeing some changes (e.g. contracting out of bin services) but it’s all happening very slowly – and even more slowly now that the Troika are gone. And while Minister Howlin (the real Taoiseach) dithers and procrastinates, and Minister Burton fails to tackle “out of control” welfare spending, the taxpayer has to pick up the bill.

creedp

Scofflaw wrote: »

And a serious lack of facts, which a couple of minutes with Google would have sorted out. He resigned years ago, making his permanent position available, and so obviously doesn't draw the salary. He has claimed he doesn't draw from the pension:

Thanks for setting me straight .. you're right Google's your only man!

fliball123

ardmacha wrote: »

PS pay has been cut 3 times, while private pay is increasing. Yet some posters here manage to imply that PS pay is untouched, although they know otherwise.

Hows about 6 rounds of pay increments in the same period...?

creedp

fliball123 wrote: »

Hows about 6 rounds of pay increments in the same period...?

How about zero rounds of pay increments in the same period? Your statement has about as much validity as someone arguing that every private sector workers gets an annual bonus .. hang on though maybe they do!

OldNotWIse

DanDan6592 wrote: »

Why? Why should someone with no children essentially be punished for not having any?

A person with no children already pays tax which goes to a child's parent/s in the form of child benefit. Why should they have a double punishment?

Agree 100%

fliball123

creedp wrote: »

How about zero rounds of pay increments in the same period? Your statement has about as much validity as someone arguing that every private sector workers gets an annual bonus .. hang on though maybe they do!

Hang on increments are estimated to be costing somewhere in the region of between 150million to 250million each year its hardly a trivial amount..

The pay cuts to the public sector are a crock and is akin to trying to empty a swimming pool by taking water in a bucket from the deep end and emptying it at the shallow end..

As for private sector employees getting bonuses?? so what does that come out of my taxes no..Infact it adds to the tax take so your argument is complete nonsense

OldNotWIse

fliball123 wrote: »

Hang on increments are estimated to be costing somewhere in the region of between 150million to 250million each year its hardly a trivial amount..

The pay cuts to the public sector are a crock and is akin to trying to empty a swimming pool by taking water in a bucket from the deep end and emptying it at the shallow end..

As for private sector employees getting bonuses?? so what does that come out of my taxes no..Infact it adds to the tax take so your argument is complete nonsense

Where are these people? My brother is private sector and has had his pay slashed by a third - no bonuses or increments or privelege days for him!

creedp

fliball123 wrote: »

Hang on increments are estimated to be costing somewhere in the region of between 150million to 250million each year its hardly a trivial amount..

I didn't say anything about them being trivial . I'm just making the point that not everybody has received increments over the past 6 years and therefore can have had in excess of a 20% reduction in pay over that same period.

The pay cuts to the public sector are a crock and is akin to trying to empty a swimming pool by taking water in a bucket from the deep end and emptying it at the shallow end..

What's that got to do with anything .. presumably you are therefore logically trying to argue that public pay should be zero until Ireland experiences surpluses again. Course that would be never as the Govt could keep cutting taxes so the State could always generate a deficit.

fliball123

creedp wrote: »

I didn't say anything about them being trivial . I'm just making the point that not everybody has received increments over the past 6 years and therefore can have had in excess of a 20% reduction in pay over that same period.




What's that got to do with anything .. presumably you are therefore logically trying to argue that public pay should be zero until Ireland experiences surpluses again. Course that would be never as the Govt could keep cutting taxes so the State could always generate a deficit.

Well then you will accept the fact that with increments 6 rounds of them that a lot of people in the public sector have not taken pay cuts either and are back or above the levels they were being paid in 2008?

Where are you getting 20% pay cut from as far as I was aware it was 7% average a pension levy (a contribution for a defined benefit..One which the country has not got the capacity to cover at the moment) where is the other % coming from?

No not cut to zero but to an appropriate level that is affordable at present and increments should be abolished until our deficit is gone.

As for you tax cutting proposal..Some kind of tax relief is badly needed in this country...We are overtaxed and we get a p1ss poor and year on year a diminished service in return for what we are paying for.

Then you hear the likes of ASTU the teachers union on this morning moaning and trying to put the 30% of people who had been hired under the croke park terms forward as a means not to cut their wage..When it was the other 70% who forced the governments hand by getting them to ringfence and protect their wage in the first place..Complete nonsense..

Bottom line is we cannot afford the current level of ps pay and pensions and welfare...There is still a 10 billion a year hole to be found

Geuze

Just a few points:

Thousands of workers don't get increments as not on a scale, or else at top of scale.

But yes, thousands others have got increments during last 5 years.

There have been three PS paycuts:

(1) general cut to gross pay, graduated, averaging about 7%
(2) PRD - typical rate 10%
(3) more recent HRA changes

Note that workers pay the PRD on top of their normal pension conts, in case anybody suggests that "they don't pay for their pensions"

Also note that some groups like young teachers have taken 5 paycuts.

fliball123

Geuze wrote: »

Just a few points:

Thousands of workers don't get increments as not on a scale, or else at top of scale.

But yes, thousands others have got increments during last 5 years.

There have been three PS paycuts:

(1) general cut to gross pay, graduated, averaging about 7%
(2) PRD - typical rate 10%
(3) more recent HRA changes

Note that workers pay the PRD on top of their normal pension conts, in case anybody suggests that "they don't pay for their pensions"

Also note that some groups like young teachers have taken 5 paycuts.

A high % of PS do not pay enough for the pension that they get thats a fact.

creedp

fliball123 wrote: »

Well then you will accept the fact that with increments 6 rounds of them that a lot of people in the public sector have not taken pay cuts either and are back or above the levels they were being paid in 2008?

Of course it may be possible .. if you pick a particular grade and if that particular grade provides for annual increments and if a person had that many increments remaining. The one thing that isn't the case is that the person is back to where they would have been prior to 2008. You can argue as long as you wish around the validity or otherwise or increments but even if a person has received them, their pay is anything up to 20% lower today than it would had been if the pay cuts were not implemented . Everything else is semantics and simply provides useful fodder for ongoing debating/arguing.

Where are you getting 20% pay cut from as far as I was aware it was 7% average a pension levy (a contribution for a defined benefit..One which the country has not got the capacity to cover at the moment) where is the other % coming from?

I know despite the huge volumes of discussion on here alone around PS pay cuts people still won't accept the fact as have been presented. End of discussion for me

No not cut to zero but to an appropriate level that is affordable at present and increments should be abolished until our deficit is gone.

Presumably objective group of non-PS will be assembled to decide on what is the appropriate level ..

maninasia

golfwallah wrote: »

I think you may be mixing cause and effect here.

When private companies provide value to their customers (cause), they become profitable (effect). And when that value is unique (and not just another “me too” operation), they become even more profitable, or will be perceived as being likely to become so in the future. There is also the impact of competition, which requires such companies to be cost-effective, innovative and responsive to changing customer / market needs. Examples are: CRH, Kerry Group, Ryanair, DCC, Glanbia, Paddy Power, etc.

I’d agree that it is a bit more difficult to measure value for money and effect change in the Public Service .... but it isn’t impossible. The main factors behind these difficulties are the absence of a pricing mechanism and competition, the inability of management to deal effectively with trade unions and inertia brought about by government /local authority ability to put off change through tax increases and borrowing. Yes, we are seeing some changes (e.g. contracting out of bin services) but it’s all happening very slowly – and even more slowly now that the Troika are gone. And while Minister Howlin (the real Taoiseach) dithers and procrastinates, and Minister Burton fails to tackle “out of control” welfare spending, the taxpayer has to pick up the bill.

The profit mechanism combined with flexible policies and enforcement of competitive practice can be a powerful factor in delivering real value to end users.

At the same time, some services and some things would not be possible if focused on profit alone. That's okay, as long as the people delivering these services are evaluated in terms of delivering to set objectives and generating constant improvement. The employees should be rewarded, financially or through other methods when they deliver better results.

creedp

OldNotWIse wrote: »

Where are these people? My brother is private sector and has had his pay slashed by a third - no bonuses or increments or privelege days for him!

While it may be the case for some .. at least there is evidence that things are picking up for others

http://www.irishtimes.com/business/economy/ireland/more-smes-to-celebrate-christmas-this-year-1.1598847

An important point here relates to motivation of staff .. it is good for employers to treat their staff every now and again .. except when my taxes pay for it!

Godge

fliball123 wrote: »

A high % of PS do not pay enough for the pension that they get thats a fact.

fliball123 wrote: »

Where are you getting 20% pay cut from as far as I was aware it was 7% average a pension levy (a contribution for a defined benefit..One which the country has not got the capacity to cover at the moment) where is the other % coming from?

You present both of these statements as fact yet I cannot find anything anywhere on the web (apart from posts and blogs giving out about the public sector) to back up these type of statements. Can you find something factual and recent that backs up either of these claims?

fliball123

Godge wrote: »

You present both of these statements as fact yet I cannot find anything anywhere on the web (apart from posts and blogs giving out about the public sector) to back up these type of statements. Can you find something factual and recent that backs up either of these claims?

Godge do some research on the looming pension crisis. And on defined benefit v.s defined contribution and it will be staring out at you from your screen pal

Geuze

fliball123 wrote: »

A high % of PS do not pay enough for the pension that they get thats a fact.

Nobody has ever suggested that employees should pay the full cost of their pensions.

Pensions costs are shared between employer and worker.

It is true that past PS workers got a good deal - yes, I agree with you.

But current and future workers will be paying in more, and getting out less.

PS workers pay 6.5% and now the recent PRD at 10%.

ardmacha

Where are these people? My brother is private sector and has had his pay slashed by a third - no bonuses or increments or privelege days for him!

Statisically your brother is in a relatively small minority. Outside of construction, cuts of this magnitude are relatively unusual. Most people have no cuts, or modest cuts now being restored.

A high % of PS do not pay enough for the pension that they get thats a fact.

Even if this were true, it can only be used as a jiustification, not as the basis for denying the existence of a paycut. So for once and all would people stop denying that PS have had paycuts, up to 25%-30% in the top.

Any poster denying the truth has no credibility.

Godge

fliball123 wrote: »

Godge do some research on the looming pension crisis. And on defined benefit v.s defined contribution and it will be staring out at you from your screen pal

Yawn, this has been done to death.

http://www.audgen.gov.ie/documents/vfmreports/68_Central_Gov_Pensions.pdf

Here is the C&AG Report done in 2009.

Interesting that none has been done since. Why?

"After taking account of the assets held in the funded schemes and €5.4 billion of assets held in the NPRF, it is estimated that the net present value of the accrued pension liabilities at the end of 2008 amounted to €101 billion."

That figure will now be less because of

(1) The paycuts in 2010 and 2013 to existing public servants
(2) The cuts to pensions in excess of €32,000.


The report explicitly said that the early retirement schemes will increase pensions in the short term but decrease them in the longer terms and it had not taken this into consideration:

"The impact of the scheme will be to increase pension outflows in the short term and to reduce them in the longer term due to the lower number of years’ service achieved by those taking early retirement."

It also assumed salary and pension increases:

"the expected pension at retirement was calculated allowing for future general salary inflation"

"The value of the accrued pension liability is calculated assuming that future pension increases are awarded at the same rate as general salary inflation i.e. 1.75% p.a. above price inflation (pay parity)."

Well, salary increases ain't happening. Inflation is slightly above zero since 2008 with a sharp fall in 2009 being offset by small increases since. So the 1.75% accumulator didn't happen. By 2013, this should have resulted in over a 9% increase in salary rates. Didn't happen.

So the figure of €101 billion in accrued pension liabilities is an overestimate, probably by as much as 20%. It also takes no account of the level of income likely to be received from pension contributions and PRD.

The report does go on to consider these issues:

"While the foregoing paragraphs have considered the present value of entitlements which have accrued to date, it is also useful to examine the future trend in payments. Unlike the accrued pensions liability which reflects benefits earned to date, these cash flows reflect the monetary impact of future recruitment and retirement patterns."

"It is estimated, based on the examination assumptions used, that the cumulative gross outflows in the period 2009 to 2058 will amount to €367 billion and net outflows will amount to €157 billion".

Now this figure takes account of money received as well as money going out. It also includes the current accrued liability of €101bn. Certain assumptions are made:

"Annual gross cash outflows are projected to increase by over 500% from €2.4 billion in 2009 to €14.7 billion in 2058 in constant 2008 price terms. Contribution income, including PRD, is also projected to increase by over 300% from €1.7 billion to €7.4 billion".

So outflows will grow faster than income. We will return to that.

"The projected growth in the number of pensioners results from an increase in size of the public service which is forecast to increase by 23% between 2008 and 2018."

Well that is another thing that ain't going to happen.

http://www.budget.gov.ie/The%20National%20Recovery%20Plan%202011-2014.pdf

"Cut public service staff numbers by 24,750 over 2008 levels, back to levels last seen in 2005"

That is a cut of about 10% rather than growth of 23%. Now remember that expenditure was rising faster than income. That means for every extra public servant projected the net bill gets higher but for every less public servant the net bill gets lower. Our €157 bn is getting smaller again. Probably by as much as one-third? Then you need to have an idea about what is going to happen salary inflation from 2008 onwards. Well we know the first five years have not gone according to plan and if I was a public servant, I wouldn't be betting on my salary returning to 2008 levels before 2020, by which stage it could be 20-30% behind the C&AG predictions.


Appendix C looks at some sensitivity options. It considers what higher salary increases would mean but doesn't look at what salary cuts (which we have had to date) or lower salary increases (which are likely over the course of the study because of the front-loaded salary cuts) would mean. However, in examining salary increases the following statement is made:

"The impact of increasing the assumed real rates of wage growth (the real rate is the amount in excess of price inflation) and State Social Insurance pension increases by 0.5% per annum was examined. Increasing the real rates by 0.5% per annum would lead to a revised assumption for real general salary inflation and State pension increases of 2.25% per annum. The impact on the value of the accrued pension liability is shown in Figure C.3.

"The total liability increases from €106.6 billion to €117.1 billion (net of assets held within funded pension schemes but before allowance for NPRF assets) which is an increase of 10%."

When you consider that in actual fact we have seen more than the opposite - i.e. salaries being cut rather than inflation plus 2.25%, you can only conclude that the long-term liability has been cut significantly.

Now you see why there has been no official study since 2008. The costs of future public service pensions have been significantly reduced both by the cuts in pay and pensions but also by the cuts in numbers. All of these measures are significantly below where the 2008 study assumed they would be. The government doesn't want anyone studying this. Imagine if an independent study found that the 2008 pension liability had been cut by say one-third, in the order of €50 bn?

But, hay, you and others can continue on your ill-informed rant about public servants and the pension liability.

Now do some research yourself.

fliball123

Geuze wrote: »

Nobody has ever suggested that employees should pay the full cost of their pensions.

Pensions costs are shared between employer and worker.

It is true that past PS workers got a good deal - yes, I agree with you.

But current and future workers will be paying in more, and getting out less.

PS workers pay 6.5% and now the recent PRD at 10%.

Why should the vast majority of the current 1.4million private sector worker tax payer overpay in tax in order to protect current and future pensions in the Public sector when they cannot pay for their own. Its a disgrace. The government then have the cheek to raid money from the private pension pot and then suggest that people should start putting in more money to their pensions...The current ps scheme should be stopped as of now if they want pensions let them pay the appropriate amount for what they get..It cannot be afforded..

fliball123

OldNotWIse wrote: »

Where are these people? My brother is private sector and has had his pay slashed by a third - no bonuses or increments or privelege days for him!

I have not seen any either but I would hazard a guess that there are companies in the private sector paying bonuses

fliball123

creedp wrote: »

I didn't say anything about them being trivial . I'm just making the point that not everybody has received increments over the past 6 years and therefore can have had in excess of a 20% reduction in pay over that same period.




What's that got to do with anything .. presumably you are therefore logically trying to argue that public pay should be zero until Ireland experiences surpluses again. Course that would be never as the Govt could keep cutting taxes so the State could always generate a deficit.

You say not all have been paid 6 years of increments and then suggest that all have taken 20% pay cuts when that figure would be at the upper end of the spectum ..You have selective analysis for your posts and then you try to spin your argument that 20% and no pay increments?

fliball123

ardmacha wrote: »

Statisically your brother is in a relatively small minority. Outside of construction, cuts of this magnitude are relatively unusual. Most people have no cuts, or modest cuts now being restored.




Even if this were true, it can only be used as a jiustification, not as the basis for denying the existence of a paycut. So for once and all would people stop denying that PS have had paycuts, up to 25%-30% in the top.

Any poster denying the truth has no credibility.

Where have I denied that they never took a pay cut..? I just want balance in this..The fact is in a year or twos time (with current pay incrments) we will be paying as much for the public sector pay and pensions as we were back in 2008 and this is with about 30k less people working in the sector..How can that be sustained?

As for the comparing cuts in private and public sector hows about the 1/4 of million who joined the dole queue at least 95% of them were from the private sector..the other 5% from the public sector who got a nice redundancy package to jump.

srsly78

Fliball are you taking inflation into account? This is a hugely important factor and negates any naive analysis.

fliball123

Godge wrote: »

Yawn, this has been done to death.

http://www.audgen.gov.ie/documents/vfmreports/68_Central_Gov_Pensions.pdf

Here is the C&AG Report done in 2009.

Interesting that none has been done since. Why?

"After taking account of the assets held in the funded schemes and €5.4 billion of assets held in the NPRF, it is estimated that the net present value of the accrued pension liabilities at the end of 2008 amounted to €101 billion."

That figure will now be less because of

(1) The paycuts in 2010 and 2013 to existing public servants
(2) The cuts to pensions in excess of €32,000.


The report explicitly said that the early retirement schemes will increase pensions in the short term but decrease them in the longer terms and it had not taken this into consideration:

"The impact of the scheme will be to increase pension outflows in the short term and to reduce them in the longer term due to the lower number of years’ service achieved by those taking early retirement."

It also assumed salary and pension increases:

"the expected pension at retirement was calculated allowing for future general salary inflation"

"The value of the accrued pension liability is calculated assuming that future pension increases are awarded at the same rate as general salary inflation i.e. 1.75% p.a. above price inflation (pay parity)."

Well, salary increases ain't happening. Inflation is slightly above zero since 2008 with a sharp fall in 2009 being offset by small increases since. So the 1.75% accumulator didn't happen. By 2013, this should have resulted in over a 9% increase in salary rates. Didn't happen.

So the figure of €101 billion in accrued pension liabilities is an overestimate, probably by as much as 20%. It also takes no account of the level of income likely to be received from pension contributions and PRD.

The report does go on to consider these issues:

"While the foregoing paragraphs have considered the present value of entitlements which have accrued to date, it is also useful to examine the future trend in payments. Unlike the accrued pensions liability which reflects benefits earned to date, these cash flows reflect the monetary impact of future recruitment and retirement patterns."

"It is estimated, based on the examination assumptions used, that the cumulative gross outflows in the period 2009 to 2058 will amount to €367 billion and net outflows will amount to €157 billion".

Now this figure takes account of money received as well as money going out. It also includes the current accrued liability of €101bn. Certain assumptions are made:

"Annual gross cash outflows are projected to increase by over 500% from €2.4 billion in 2009 to €14.7 billion in 2058 in constant 2008 price terms. Contribution income, including PRD, is also projected to increase by over 300% from €1.7 billion to €7.4 billion".

So outflows will grow faster than income. We will return to that.

"The projected growth in the number of pensioners results from an increase in size of the public service which is forecast to increase by 23% between 2008 and 2018."

Well that is another thing that ain't going to happen.

http://www.budget.gov.ie/The%20National%20Recovery%20Plan%202011-2014.pdf

"Cut public service staff numbers by 24,750 over 2008 levels, back to levels last seen in 2005"

That is a cut of about 10% rather than growth of 23%. Now remember that expenditure was rising faster than income. That means for every extra public servant projected the net bill gets higher but for every less public servant the net bill gets lower. Our €157 bn is getting smaller again. Probably by as much as one-third? Then you need to have an idea about what is going to happen salary inflation from 2008 onwards. Well we know the first five years have not gone according to plan and if I was a public servant, I wouldn't be betting on my salary returning to 2008 levels before 2020, by which stage it could be 20-30% behind the C&AG predictions.


Appendix C looks at some sensitivity options. It considers what higher salary increases would mean but doesn't look at what salary cuts (which we have had to date) or lower salary increases (which are likely over the course of the study because of the front-loaded salary cuts) would mean. However, in examining salary increases the following statement is made:

"The impact of increasing the assumed real rates of wage growth (the real rate is the amount in excess of price inflation) and State Social Insurance pension increases by 0.5% per annum was examined. Increasing the real rates by 0.5% per annum would lead to a revised assumption for real general salary inflation and State pension increases of 2.25% per annum. The impact on the value of the accrued pension liability is shown in Figure C.3.

"The total liability increases from €106.6 billion to €117.1 billion (net of assets held within funded pension schemes but before allowance for NPRF assets) which is an increase of 10%."

When you consider that in actual fact we have seen more than the opposite - i.e. salaries being cut rather than inflation plus 2.25%, you can only conclude that the long-term liability has been cut significantly.

Now you see why there has been no official study since 2008. The costs of future public service pensions have been significantly reduced both by the cuts in pay and pensions but also by the cuts in numbers. All of these measures are significantly below where the 2008 study assumed they would be. The government doesn't want anyone studying this. Imagine if an independent study found that the 2008 pension liability had been cut by say one-third, in the order of €50 bn?

But, hay, you and others can continue on your ill-informed rant about public servants and the pension liability.

Now do some research yourself.

Thats laughable..a report in 2009 , 4 years ago..We have a fierce rise in the Average Age of people dying meaning we are now on the hook longer. I agree there are some cuts that will in the long run as in people who joined in the last 3/4 years will make it less expensive..Which is a crook as with the recruitment moratorium that has gone on in the ps in the last few years very few new employees have come in.

But as I say there has been some cuts but still no where near what is needed and they are still not paying in enough to cover the shortfall and that will be the case until the defined benefit scheme is changed

ardmacha

The fact is in a year or twos time (with current pay incrments) we will be paying as much for the public sector pay and pensions as we were back in 2008 and this is with about 30k less people working in the sector..How can that be sustained?

This is not true. Either show some document that suggests this or withdraw this untruth.

fliball123

srsly78 wrote: »

Fliball are you taking inflation into account? This is a hugely important factor and negates any naive analysis.

Whats naive about me paying 52% of every Euro I earn after 32k..Or knowing my kid and grandkids will be forced to pay for current PS pensioners to live their life out in decadence and the fact that they did not pay anywhere near enough to have the pension they are living on. Hows about we are going to borrow another 10 billion next year to pay for all of the above along with other expenses that are still too high.. How does inflation negate any of that.?

fliball123

ardmacha wrote: »

This is not true. Either show some document that suggests this or withdraw this untruth.

I wont withdraw it ..You watch for the actual pay (including contractors and not estimates) and pensions figure for the end of 2015 (if things remain as they are obviously) and compare to 2008 figures

Idbatterim

yeah, a pity in some ways, that instead of just being at the edge of the cliff, looking into the abyss, that we didnt fall off, would have been very painful for some, but it could have sorted out a lot of our problems and ridiculous borrowing, fairly quickly..

Idbatterim

How does inflation negate any of that.?

it devalues it and if it is frozen for several years, it is eating away at it cumulatively...

Godge

fliball123 wrote: »

Where have I denied that they never took a pay cut..? I just want balance in this..The fact is in a year or twos time (with current pay incrments) we will be paying as much for the public sector pay and pensions as we were back in 2008 and this is with about 30k less people working in the sector..How can that be sustained?

As for the comparing cuts in private and public sector hows about the 1/4 of million who joined the dole queue at least 95% of them were from the private sector..the other 5% from the public sector who got a nice redundancy package to jump.

fliball123 wrote: »

Thats laughable..a report in 2009 , 4 years ago..We have a fierce rise in the Average Age of people dying meaning we are now on the hook longer. I agree there are some cuts that will in the long run as in people who joined in the last 3/4 years will make it less expensive..Which is a crook as with the recruitment moratorium that has gone on in the ps in the last few years very few new employees have come in.

But as I say there has been some cuts but still no where near what is needed and they are still not paying in enough to cover the shortfall and that will be the case until the defined benefit scheme is changed

fliball123 wrote: »

Whats naive about me paying 52% of every Euro I earn after 32k..Or knowing my kid and grandkids will be forced to pay for current PS pensioners to live their life out in decadence and the fact that they did not pay anywhere near enough to have the pension they are living on. Hows about we are going to borrow another 10 billion next year to pay for all of the above along with other expenses that are still too high.. How does inflation negate any of that.?

fliball123 wrote: »

I wont withdraw it ..You watch for the actual pay (including contractors and not estimates) and pensions figure for the end of 2015 (if things remain as they are obviously) and compare to 2008 figures

http://budget.gov.ie/Budgets/2014/EstimateStatement.aspx


"I would like to acknowledge the contribution that public servants have made to our recovery.

Over the course of the last 5 years, the Public Service has reduced in size by almost 10%. The cost of the pay bill has fallen even further, by some 17%, and the Haddington Road Agreement that I reached with Public Service unions earlier this year will permit that cost to fall further again.

These savings need to be protected and sustained, which means that we must continue to demand further efficiency in the system. And we must ensure that Public Service managers across every sector make full use of the 15 million extra hours and the other hard-won workplace flexibilities agreed in Haddington Road."


Instead of just posting rubbish, maybe you should do a little bit of research.

ardmacha

I wont withdraw it ..You watch for the actual pay (including contractors and not estimates) and pensions figure for the end of 2015 (if things remain as they are obviously) and compare to 2008 figures

Very convenient, to propose a figure for 2015 and state that estimates cannot be used to refute your figure, meaning that it will be two years before you are uncovered.

No serious commentator has suggested this. Some commentators have quibbled over whether the cut will be 15% or 20%, but nobody has suggested an increase.

sarumite

Godge wrote: »

Yawn, this has been done to death.

http://www.audgen.gov.ie/documents/vfmreports/68_Central_Gov_Pensions.pdf

Am I correct in my reading of the report that they mistakenly inlcuded the pension levy in their calculations? Considering that were are reminded ad-nauseam that it was a pay cut and not related to pensions, if they did use the pension in their calculations then their error would need to be corrected for.

creedp

fliball123 wrote: »

Where have I denied that they never took a pay cut..? I just want balance in this..The fact is in a year or twos time (with current pay incrments) we will be paying as much for the public sector pay and pensions as we were back in 2008 and this is with about 30k less people working in the sector..How can that be sustained?

So how much of a PS pay cut are you prepared to admit to?

As for the comparing cuts in private and public sector hows about the 1/4 of million who joined the dole queue at least 95% of them were from the private sector..the other 5% from the public sector who got a nice redundancy package to jump.

This old chestnut again. Its very unfortunate that so many private sector employees lost their jobs but I still don't see what this has got to do with relative pay cuts for those remaining in employment. A PS employees has the same cost of living has a private sector employee, same mortgage/rental costs, same food, heat, childcare costs, etc, etc.

You're very much entitled to your opinions but the reality is PS pay was cut between 12- 15% plus a further cut of 5.5% last July for the higher paid PS. While you are correct that too many private sector employees have lost their jobs the other side of the equation that many of those who remain in employment have not done so badly with pay freezes and modest pay increases being the norm.