Government to reverse some Public Secor Pay cuts

chopper6

kippy wrote: »

You don't tend to gain much experience in the Public sector, you need to spend some time moving around in employment to gain that.

What?

noodler

Riskymove wrote: »

thats the "final salary vs average salary" bit

the increases in the pension is a different measure which will be applying to everyone

Brian lenihan announced it some time ago but they have not implemented yet because, as I mentioned, they'd have to start now. Instead they are leaving the status quo becuase there are no pay rises and therefore no increases to pensions

as soon as it makes financial sense they will announce a cut in the link

It has been implemented.

Legisaltion was passed in late 2012 /early 2013 (everyone joing after implementation has career average earnings).

As a measure then it is an absolute joke and will not affect 99% of public servants but will discriminate against newer entrants.

Riskymove

noodler wrote: »

It has been implemented.

you are talking about something else - the "pension based on average earnings" bit

the change in how existing pensions are increased has not yet been implemented

noodler

Riskymove wrote: »

you are talking about something else - the "pension based on average earnings" bit

the change in how existing pensions are increased has not yet been implemented

Misread your post.

I thought as a 'new' new entrant that I was stuck with index-linkage to the CPI though.

Godge

noodler wrote: »

Misread your post.

I thought as a 'new' new entrant that I was stuck with index-linkage to the CPI though.

No, there has been no decision on how the pensions of those who retire with a "new" pension should be treated in retirement.

Neither has there been a decision on how those who retire with an "old" pension will be treated in future. Until now they have been linked to earnings. While the pensions were cut, they were not cut as much as salaries were under the FEMPI Acts, so arguably, the link has been broken already and what happens next is up for grabs.

Ironically, had public sector pensions been linked to the CPI, anyone who retired since 2008 would have been better off.

noodler

Godge wrote: »

No, there has been no decision on how the pensions of those who retire with a "new" pension should be treated in retirement.

Neither has there been a decision on how those who retire with an "old" pension will be treated in future. Until now they have been linked to earnings. While the pensions were cut, they were not cut as much as salaries were under the FEMPI Acts, so arguably, the link has been broken already and what happens next is up for grabs.

Ironically, had public sector pensions been linked to the CPI, anyone who retired since 2008 would have been better off.

Yup, and that would have been the only period in history.

Riskymove

Godge wrote: »

Ironically, had public sector pensions been linked to the CPI, anyone who retired since 2008 would have been better off.

which is why they didn't implement this...but they will in due course imo

Godge

noodler wrote: »

Yup, and that would have been the only period in history.

Would have to look up the stats but there are two other candidate periods:

Late 1980s with the pay freeze under MacSharry.
Hyperinflation in the 1970s.

Overall though, retired public servants have been better off with the current system.

Loire

Hi,

New to all this, but one thing that doesn't get mentioned much is the tax-free lumpsum that public servants get on retirement. 1.5 times final salary for full service.

Lets assume someone finishes on 60k with 40 year's service. It's highly likely that that person started on a much lower salary over the 40 years and so the annual contributions would have been small for most of their contributions. But even discounting this - let's say the person was always earning 60k and paid 6.5% on this.

This means that they would have paid 156,000 towards their pension (60,000 * 0.65% * 40). Taking away the lumpsum of 90,000 you are left with a net contribution of 66,000.

So 66,000 for half your final salary (30,000) per annum, index-linked for the rest of your life.

Sounds pretty good to me

Loire.

Head The Wall

noodler wrote: »

It has been implemented.

Legisaltion was passed in late 2012 /early 2013 (everyone joing after implementation has career average earnings).

As a measure then it is an absolute joke and will not affect 99% of public servants but will discriminate against newer entrants.

So we will start to see savings from this in 30-40 years time. That's ok though, there's no need for any money to be saved right now :-)

Godge

Loire wrote: »

Hi,

New to all this, but one thing that doesn't get mentioned much is the tax-free lumpsum that public servants get on retirement. 1.5 times final salary for full service.

Lets assume someone finishes on 60k with 40 year's service. It's highly likely that that person started on a much lower salary over the 40 years and so the annual contributions would have been small for most of their contributions. But even discounting this - let's say the person was always earning 60k and paid 6.5% on this.

This means that they would have paid 156,000 towards their pension (60,000 * 0.65% * 40). Taking away the lumpsum of 90,000 you are left with a net contribution of 66,000.

So 66,000 for half your final salary (30,000) per annum, index-linked for the rest of your life.

Sounds pretty good to me

Loire.

Basic private pension schemes employer match employee's contribution.
Really good private pension schemes employer doubles employee's contribution.

Using your example, matching contributions would give a pension fund of 222,000, enough for the pension for retiring at 65 to last until 72/73. If the person was post-95 in a co-ordinated scheme, the pension would only be €18,000 meaning the 222,000 would last until they were 77/78.

If you assume the State is a good employer and would contribute double the employee's contribution, the pension would last even longer. You are also forgetting that the unused contributions of those who died before they get a pension can be used to fund those who live longer etc.

It is not a simple calculation and it is really something that should be left to actuaries to give evidence on.

Godge

Head The Wall wrote: »

So we will start to see savings from this in 30-40 years time. That's ok though, there's no need for any money to be saved right now :-)

Do you know is anything being done in the UK to address their public sector pension arrangements which have an even bigger hole in them than ours. After all, it is your tax money which is paying for those big UK pensions.

noodler

Godge wrote: »

Do you know is anything being done in the UK to address their public sector pension arrangements which have an even bigger hole in them than ours. After all, it is your tax money which is paying for those big UK pensions.

Don't obfuscate when somebody makes a point you can't counter.


Regarding the pension lump sum, I have a deduction for that taken out of my salary every two weeks. I haven't done the maths but I assume I'd see a net benefit from it. It isn't free as such though - it is a third deduction from salary's relating to pensions.

Godge

noodler wrote: »

Don't obfuscate when somebody makes a point you can't counter.

.

There is no point countering it.

You cannot change pension costs overnight. Pension entitlements are a form of property right as the courts have ruled and you just can't wave a magic wand and change that.

Also we have been looking for short-term savings over the last few years rather than long-term savings.

For example, moving all public servants to the new pension scheme for all future service (i.e. you hold what you have accumulated already in line with property rights) would save much more money over a 20-30 year frameline but it would have done nothing to bring down costs in 2010 and 2011. Hence the pension levy and pay cuts.

When they are restored, it might get interesting.

Riskymove

Head The Wall wrote: »

So we will start to see savings from this in 30-40 years time. That's ok though, there's no need for any money to be saved right now :-)

would you rather they left it the way it was forever?

you know well they implemented other changes to reduce the current cost

Riskymove

Godge wrote: »

You cannot change pension costs overnight. Pension entitlements are a form of property right as the courts have ruled and you just can't wave a magic wand and change that.

unfortunately not the case for PS

Riskymove

Loire wrote: »

Hi,

Hi

New to all this, but one thing that doesn't get mentioned much is the tax-free lumpsum that public servants get on retirement. 1.5 times final salary for full service.

it gets mentioned all the time

So 66,000 for half your final salary (30,000) per annum, index-linked for the rest of your life.

as per other posts, PS pensions are not funded or paid for in this way

Godge

Riskymove wrote: »

unfortunately not the case for PS

It took a national financial emergency to legally cut the pensions in accordance with the Constitution. Once the emergency is over, the pensions will have to be restored, in accordance with Constitutional law. The only question is how quickly will the pay cuts and pensions be restored.

Head The Wall

Godge wrote: »

Do you know is anything being done in the UK to address their public sector pension arrangements which have an even bigger hole in them than ours. After all, it is your tax money which is paying for those big UK pensions.

We are not discussing UK pensions but here's a fact for you


In April 2013 it is estimated that on average the pay of the public sector was between 2.2% and 3.1% higher after adjusting for the different jobs and personal characteristics of the workers

After further adjusting for the different organisation sizes between the public and private sector, in April 2013 it is estimated that on average the pay of the public sector was between 1.3% and 2.4% lower than the private sector.

This is quite a bit less than the premium enjoyed in Ireland especially at the lower end of the pay scale but you'll probably choose ignore these as well

Godge

Head The Wall wrote: »

We are not discussing UK pensions but here's a fact for you


In April 2013 it is estimated that on average the pay of the public sector was between 2.2% and 3.1% higher after adjusting for the different jobs and personal characteristics of the workers

After further adjusting for the different organisation sizes between the public and private sector, in April 2013 it is estimated that on average the pay of the public sector was between 1.3% and 2.4% lower than the private sector.

This is quite a bit less than the premium enjoyed in Ireland especially at the lower end of the pay scale but you'll probably choose ignore these as well

But you use unadjusted comparisons for Ireland or badly constructed adjusted comparisons.

You also don't allow for the differences between Ireland and the UK - the London allowance for public servants makes a difference. When combined with the higher percentage of public sector workers in the workforce in Scotland and Northern Ireland, you are not comparing like with like with Ireland.

I could go on and on into the academic research but this thread is more focussed on tabloid-type headlines.

James esq

The emergency is over so can we expect a repeal of

"Financial Emergency Measures in the Public Interest Act 2009"

next month

Peter Flynt

James esq wrote: »

The emergency is over so can we expect a repeal of

"Financial Emergency Measures in the Public Interest Act 2009"

next month

Big Deal - That's more of a political move designed to benefit the Labour Party and the Unions.

FEMPI was never required as the unions sold their members down the Swanee.

chopper6

Peter Flynt wrote: »

Big Deal - That's more of a political move designed to benefit the Labour Party and the Unions.

FEMPI was never required as the unions sold their members down the Swanee.

More money in the members pockets= good news for all!

Peter Flynt

chopper6 wrote: »

More money in the members pockets= good news for all!

You do realise that's not going to happen with the repeal of FEMPI.

All that FEMPI was was a huge stick that would be taken out of the cupboard to be delivered to public sector workers if they didn't sign up to various "agreements" designed to cut their pay and make worse terms and conditions of employment.

The union leaders hadn't the balls to let the Government use FEMPI and let them tie the political consequences for they're more fixers for the Government than representatives of those who pay their wages.

You've got it arseways if you think FEMPI repeal means "more money in pockets" for anyone.

James esq

Regardless of what it was or did, the agreement ifs for it to go by 2017. So what do you think will it go in this budget or next years.

ezra_pound

Peter Flynt wrote: »

You do realise that's not going to happen with the repeal of FEMPI.

All that FEMPI was was a huge stick that would be taken out of the cupboard to be delivered to public sector workers if they didn't sign up to various "agreements" designed to cut their pay and make worse terms and conditions of employment.

The union leaders hadn't the balls to let the Government use FEMPI and let them tie the political consequences for they're more fixers for the Government than representatives of those who pay their wages.

You've got it arseways if you think FEMPI repeal means "more money in pockets" for anyone.

If any fempi act is repealed then any pay cuts legislated for in that act will be reversed. Why do you think they'd reverse a fempi act but but not the cuts it introduced?

Godge

Peter Flynt wrote: »

You do realise that's not going to happen with the repeal of FEMPI.

All that FEMPI was was a huge stick that would be taken out of the cupboard to be delivered to public sector workers if they didn't sign up to various "agreements" designed to cut their pay and make worse terms and conditions of employment.

The union leaders hadn't the balls to let the Government use FEMPI and let them tie the political consequences for they're more fixers for the Government than representatives of those who pay their wages.

You've got it arseways if you think FEMPI repeal means "more money in pockets" for anyone.

You obviously don't understand the premise of FEMPI and have never read the Act or the Dail debates at the time.

FEMPI and the pay cuts are only legal and constitutional once there is an economic crisis. Once the economic crisis is over, the pay cuts must be restored, bit by bit.

Peter Flynt

Godge wrote: »

You obviously don't understand the premise of FEMPI and have never read the Act or the Dail debates at the time.

FEMPI and the pay cuts are only legal and constitutional once there is an economic crisis. Once the economic crisis is over, the pay cuts must be restored, bit by bit.

I have read the act. The Dail debates are irrelevant.

Various pay cuts were installed in the "agreements" which had nothing to do with FEMPI.

FEMPI was simply an act for a Minister to implement cuts and charges if public sector workers did not vote for them.

noodler

FEMPI only applies to the latest round of pay cuts (Haddington Road) and such cuts had an income requirement of 65,000 +.

Godge

Peter Flynt wrote: »

I have read the act. The Dail debates are irrelevant.

Various pay cuts were installed in the "agreements" which had nothing to do with FEMPI.

FEMPI was simply an act for a Minister to implement cuts and charges if public sector workers did not vote for them.

http://www.per.gov.ie/croke-park-agreement/

Croke Park Agreement included FEMPI revision in its provisions

"1.16 The position concerning Public Service pay, including any outstanding adjudication findings, will be reviewed in Spring 2011 in accordance with the statutory requirement under both the Financial Emergency Measures in the Public Interest Acts of 2009 to review the operation, effectiveness and impact of the Acts before 30 June 2011, and every year thereafter. In addition to the criteria set out in those Acts, that review will take account of sustainable savings generated from the implementation of this Agreement and of the
agreements in each sector. Those savings will be independently verified by the
Implementation Body. In the event of sufficient savings being identified in the Spring 2011 review, priority will be given to public servants with pay rates of €35,000 or less in the review of pay which will be undertaken at that stage."

From Haddington Road, the commitments to review are repeated.

http://www.per.gov.ie/haddington-road-agreement/

"2.3 When economic circumstances allow and the public finances are restored to a sustainable position, the pay measures that have applied to public servants, including those under this Agreement, will be reviewed. As was stated in Paragraph 1.16 of the Public Service Agreement 2010 –2014, it is reaffirmed that priority will be given to public servants with pay rates at €35,000 or less in that review. "

noodler wrote: »

FEMPI only applies to the latest round of pay cuts (Haddington Road) and such cuts had an income requirement of 65,000 +.

http://www.oireachtas.ie/documents/bills28/acts/2009/a4109.pdf

FEMPI applies to all of the pay cuts. Here is the 2009 pay cuts in FEMPI.

noodler

Godge wrote: »

http://www.per.gov.ie/croke-park-agreement/

Croke Park Agreement included FEMPI revision in its provisions

"1.16 The position concerning Public Service pay, including any outstanding adjudication findings, will be reviewed in Spring 2011 in accordance with the statutory requirement under both the Financial Emergency Measures in the Public Interest Acts of 2009 to review the operation, effectiveness and impact of the Acts before 30 June 2011, and every year thereafter. In addition to the criteria set out in those Acts, that review will take account of sustainable savings generated from the implementation of this Agreement and of the
agreements in each sector. Those savings will be independently verified by the
Implementation Body. In the event of sufficient savings being identified in the Spring 2011 review, priority will be given to public servants with pay rates of €35,000 or less in the review of pay which will be undertaken at that stage."

From Haddington Road, the commitments to review are repeated.

http://www.per.gov.ie/haddington-road-agreement/

"2.3 When economic circumstances allow and the public finances are restored to a sustainable position, the pay measures that have applied to public servants, including those under this Agreement, will be reviewed. As was stated in Paragraph 1.16 of the Public Service Agreement 2010 –2014, it is reaffirmed that priority will be given to public servants with pay rates at €35,000 or less in that review. "










http://www.oireachtas.ie/documents/bills28/acts/2009/a4109.pdf

FEMPI applies to all of the pay cuts. Here is the 2009 pay cuts in FEMPI.

The legislation introduced to encourage acceptance of Haddington Road is what I am referring to and is what most unions want abolished.

If it was identical to the one linked (for the 2009/2010 pay cuts) then surely there would not have been the uproar there was when it was introduced. I mean, wasn't the one introduced last year supposed to have particular unilateral powers?

Godge

noodler wrote: »

The legislation introduced to encourage acceptance of Haddington Road is what I am referring to and is what most unions want abolished.

If it was identical to the one linked (for the 2009/2010 pay cuts) then surely there would not have been the uproar there was when it was introduced. I mean, wasn't the one introduced last year supposed to have particular unilateral powers?

Both sets of legislation have the same basis.

Rightwing

I'd be hoping there's no easing up on austerity. Country is very far from out of the woods. Cuts of up to 20% for the welfare and sections of the public sector should be enforced. But I doubt they are up to it.

Godge

Rightwing wrote: »

I'd be hoping there's no easing up on austerity. Country is very far from out of the woods. Cuts of up to 20% for the welfare and sections of the public sector should be enforced. But I doubt they are up to it.

There is no rational basis for 20% cuts in welfare or public sector pay when we are now in a position to consider tax cuts.

ezra_pound

Noodler and Peter Flynt do not have a clue what they're talking about.

Idbatterim

I'd be hoping there's no easing up on austerity. Country is very far from out of the woods. Cuts of up to 20% for the welfare and sections of the public sector should be enforced. But I doubt they are up to it.

Fairness never came into the cuts, in fact the entire political set up here has been about anything but fairness! The off the wall higher income tax rates, low entry point to marginal rate and the ridiculous rates that the self employed pay and the problems it creates, should be one of the first port of calls!

K-9

ezra_pound wrote: »

Noodler and Peter Flynt do not have a clue what they're talking about.

Mod:

Not particularly helpful, either expand on why you think that or don't bother posting stuff like the above at all.

James esq

The act will go by 2017 - yes it refers to some pay cuts (not the 10% pension levy)

For the purpose of claity below is an extract of the act

2.— (1) This section applies to a person—
(a) who—
(i) is a public servant on 1 March 2009, or
(ii) is not a public servant on that date but after that date is appointed or otherwise becomes a public servant, and
(b) who, on 1 March 2009 or at any time afterwards—
(i) is a member of a public service pension scheme,
(ii) is entitled to a benefit under such a scheme, or
(iii) receives a payment in lieu of membership in such a scheme.
(2) In this section, a person to whom this section applies is referred to as a “relevant person”.
(3) The person who is responsible for, or authorises, the payment of remuneration to a relevant person shall deduct or cause to be deducted an amount at the applicable rate or rates specified in the Table in this subsection—
(a) in the case of the period 1 March 2009 to 31 December 2009, in respect of that period, and
(b) in the case of the year 2010 and each subsequent year, in respect of the year concerned,
from the remuneration from time to time payable to the relevant person during that period or any such year.
TABLE
Amount of Remuneration
Rate of deduction
Up to €15,000
3 per cent
Any excess over €15,000 but not over €20,000
6 per cent
Any amount over €20,000
10 per cent

ezra_pound

James esq wrote: »

The act will go by 2017 - yes it refers to some pay cuts (not the 10% pension levy)

For the purpose of claity below is an extract of the act

2.— (1) This section applies to a person—
(a) who—
(i) is a public servant on 1 March 2009, or
(ii) is not a public servant on that date but after that date is appointed or otherwise becomes a public servant, and
(b) who, on 1 March 2009 or at any time afterwards—
(i) is a member of a public service pension scheme,
(ii) is entitled to a benefit under such a scheme, or
(iii) receives a payment in lieu of membership in such a scheme.
(2) In this section, a person to whom this section applies is referred to as a “relevant person”.
(3) The person who is responsible for, or authorises, the payment of remuneration to a relevant person shall deduct or cause to be deducted an amount at the applicable rate or rates specified in the Table in this subsection—
(a) in the case of the period 1 March 2009 to 31 December 2009, in respect of that period, and
(b) in the case of the year 2010 and each subsequent year, in respect of the year concerned,
from the remuneration from time to time payable to the relevant person during that period or any such year.
TABLE
Amount of Remuneration
Rate of deduction
Up to €15,000
3 per cent
Any excess over €15,000 but not over €20,000
6 per cent
Any amount over €20,000
10 per cent

The section you are referring to IS The pension levy!

ezra_pound

The fempi 2009 no.2 act brought in traditional pay cuts. The fempi no. 1 act 2009 you are quoting refers to the pension levy.

Peter Flynt

Godge wrote: »

http://www.per.gov.ie/croke-park-agreement/

Croke Park Agreement included FEMPI revision in its provisions

"1.16 The position concerning Public Service pay, including any outstanding adjudication findings, will be reviewed in Spring 2011 in accordance with the statutory requirement under both the Financial Emergency Measures in the Public Interest Acts of 2009 to review the operation, effectiveness and impact of the Acts before 30 June 2011, and every year thereafter. In addition to the criteria set out in those Acts, that review will take account of sustainable savings generated from the implementation of this Agreement and of the
agreements in each sector. Those savings will be independently verified by the
Implementation Body. In the event of sufficient savings being identified in the Spring 2011 review, priority will be given to public servants with pay rates of €35,000 or less in the review of pay which will be undertaken at that stage."

From Haddington Road, the commitments to review are repeated.

http://www.per.gov.ie/haddington-road-agreement/

"2.3 When economic circumstances allow and the public finances are restored to a sustainable position, the pay measures that have applied to public servants, including those under this Agreement, will be reviewed. As was stated in Paragraph 1.16 of the Public Service Agreement 2010 –2014, it is reaffirmed that priority will be given to public servants with pay rates at €35,000 or less in that review. "










http://www.oireachtas.ie/documents/bills28/acts/2009/a4109.pdf

FEMPI applies to all of the pay cuts. Here is the 2009 pay cuts in FEMPI.

Croke Park and Haddington Road are irrelevant to FEMPI.

The worse terms and conditions of employment (brought in under Croke Park & Haddington Road) will remain long after FEMPI is gone.

Godge

Peter Flynt wrote: »

Croke Park and Haddington Road are irrelevant to FEMPI.

The worse terms and conditions of employment (brought in under Croke Park & Haddington Road) will remain long after FEMPI is gone.

I agree that the conditions of employment are unlikely to change - I cannot understand why the unions agreed to them. That is their stupidity.

But the pay cuts under Croke Park and Haddington Road will be restored.

ezra_pound

Godge wrote: »

I agree that the conditions of employment are unlikely to change - I cannot understand why the unions agreed to them. That is their stupidity.

But the pay cuts under Croke Park and Haddington Road will be restored.

There were no pay cuts under croke park and only a limited pay cut to income over 60k in Haddington road.

Godge

ezra_pound wrote: »

There were no pay cuts under croke park and only a limited pay cut to income over 60k in Haddington road.

See para 1.16 of the Croke Park Agreement which implicitly endorses the FEMPI pay cuts. There are other paragraphs in that Agreement which refer to the parties accepting the state the country is in.

ezra_pound

Godge wrote: »

See para 1.16 of the Croke Park Agreement which implicitly endorses the FEMPI pay cuts. There are other paragraphs in that Agreement which refer to the parties accepting the state the country is in.

Yes it recognises the existence of the cuts but it doesn't create them. The cuts were around for over a year by then.

James esq

The public service saved Ireland from ruin caused by the private sector banks and developers.

barneystinson

James esq wrote: »

The public service saved Ireland from ruin caused by the private sector banks and developers.

We did?! Do tell.

mr_seer

James esq wrote: »

The public service saved Ireland from ruin caused by the private sector banks and developers.

Yeah it is a good thing the regulator and the politicians covered themselves in glory to make up for them

Monife

If pay is restored, will civil service workers employed post 2009 get an increase in salary to bring them in line with the payscales of their colleagues? Would they go on the 1st point of the scale or whatever point they are on depending on service?

Pocoyo

Will they just abolish the universal social charge FFS!!!!!!