Government to reverse some Public Secor Pay cuts

fliball123

barneystinson wrote: »

Moral hazard? I think you're just throwing jargon around now - you'll have to explain that one to me...

I'd have no problem with that proposal, as long as the employer's contribution is sufficient.

One scheme I'm familiar with is that operated by the construction industry, there the employer pays 60% of the contribution and the employee pays 40%.

Again, using your definition of a contribution, I'm contributing 15% so if my employer contributes 1.5times that, that'd be 22.5%, giving a total contribution of 37.5% of my gross.

Happy days.

So you do not see the moral hazard in asking 1.3million income tax payers to pay more (water charges on the way) or for the government to borrow more to pay for a pension for 300k plus the already retired in the PS. yet a large % of these 1.3 million workers cannot afford to put anything into a private pension. So if the pay rises are given next year that also has a knock on effect for both current and future ps retirees and will cost more for the tax payer..Which means given that we are still in debt and borrowing..We either pay it via taxation increase or by borrowing.

barneystinson

fliball123 wrote: »

So you do not see the moral hazard in asking 1.3million income tax payers to pay more (water charges on the way) or for the government to borrow more to pay for a pension for 300k plus the already retired in the PS. yet a large % of these 1.3 million workers cannot afford to put anything into a private pension. So if the pay rises are given next year that also has a knock on effect for both current and future ps retirees and will cost more for the tax payer..Which means given that we are still in debt and borrowing..We either pay it via taxation increase or by borrowing.

I don't think you understand what the phrase moral hazard means.

Rightwing

fliball123 wrote: »

i dont know I think it will be a combo effect of screwing the new recruits and the tax payer.....

I agree, the cash won't be there when they retire though. Lots of services need to be privatised.

fliball123

barneystinson wrote: »

I don't think you understand what the phrase moral hazard means.

the unions are taking a risk looking for pay rises and if they get them they will not have bare the cost of them. The money will be found via the tax payer..That is moral hazard at its very core. The unions bare no consequence if the ps get the rise or if they don't

Tigger

not yet wrote: »

Yes, but did you not say they were now on the dole..

It must really catch in you throat to see a PS worker get a pension,

Fcuking shame on you to begrudge a man a decent pension after 40 years service.

nothing early about retiring after 40 years

kippy

Rightwing wrote: »

I agree, the cash won't be there when they retire though. Lots of services need to be privatised.

Yeah, privitisation is the answer to all our ills......

fliball123

kippy wrote: »

Yeah, privitisation is the answer to all our ills......

In some areas it would be

Little CuChulainn

fliball123 wrote: »

In some areas it would be

What privatisation projects would you consider successful so far?

Rightwing

Little CuChulainn wrote: »

What privatisation projects would you consider successful so far?

When services like the bins are privatised, the tax payer should expect to pay less. That's the problem. No one wants privatisation if the waste and taxes continues to surge.

PeteFalk78

Rightwing wrote: »

Correct, the public sector pensions are a disgrace. The state will ultimately not be able to pay them. I also believe the younger PS workers will lose out.

That is the second time you used the word "disgrace" when referring to PS pensions. When asked to elaborate earlier you simply disappeared or ignored for a few days.

If you can back up your statement with some meaningful reasoning then it would be a great benefit....otherwise you are coming across as a bitter unintelligent hack.

Rightwing

PeteFalk78 wrote: »

That is the second time you used the word "disgrace" when referring to PS pensions. When asked to elaborate earlier you simply disappeared or ignored for a few days.

If you can back up your statement with some meaningful reasoning then it would be a great benefit....otherwise you are coming across as a bitter unintelligent hack.

Highlight the 2 posts where I used that word and I will duly apologise to all if that is the case. Otherwise, I would expect similar from you.

Thanks in advance.

PeteFalk78

This thread is going around in circles. I'm out.

@Fliball - that interview you done in the PS must have been a real humdinger. You've go real issues there buddy, most people will just continue on with life and are not so bitter. I've spent too much time on this thread whilst being getting paid by your hard earned taxes. I suppose I may do some work today before I go home.

Another days contribution to my pension. Not me......you. Thanks buddy.

Little CuChulainn

As yet, nobody has been able to show any actual costings for a PS pension to justify the claim they are a "disgrace". I mean, the salary scales are generally available publicly so it shouldn't be too hard to show accurate workings.

PeteFalk78

Little CuChulainn wrote: »

As yet, nobody has been able to show any actual costings for a PS pension to justify the claim they are a "disgrace". I mean, the salary scales are generally available publicly so it shouldn't be too hard to show accurate workings.

I did a very basic bare bones calculation for referral (quoted below). None of the PS bashers elaborated on it. I would love Rightwing and Fliball to dissect it and detail how disgraceful and outrageous it is.

PeteFalk78 wrote: »

Say the average public sector pay is 60k a year I think, so lets take it from there for the average post 1995 public sector worker.

That person would pay roughly €130 in pension related deductions a week.

That's 270k contributed to a pension over 40 years (we'll bring this down to 240k because of scales and salaries)

That person can expect a lump sum of 90k upon retirement. That brings the pot down to 150k of own monies put in. Excluding any SW handouts...... that person is entitled to 18k a year pension. 150k/18k = 8 years pension before they even reach parity with what they've contributed.

Riskymove

Riskymove wrote: »

well with both Fliball and now myself here ...... I think we are all present and correct and can now rehash the last 5 years or so of Irish Economy pointless arguments!!

increments...check
levy a tax or contribution...check
PS incompetence....check
the bail out, borrowing etc.....check
gold-plated pensions...check

and so on and so forth

12 pages of this stuff since I posted this just yesterday

plus la change!!

barneystinson

Riskymove wrote: »

12 pages of this stuff since I posted this just yesterday

plus la change!!

In keeping with the spirit of the thread:

Plus ça change you mean

not yet

Just in relation to the pension issue.

It must be taken into account that a huge % of these people will be dead 5-8 from pension age. It must also be taken into account that private companies nearly always at least match the employees contribution, sometime double or treble.

It is vital to the argument that people realise that a PS worker will receive a small % of the state pension as it is means tested against any other income (PS pension) so in effect the state is saving approx 130euro per person per week on the state pension.

not yet

When services are sold off the only ones to win are big business.

They employ staff at minimum wage, cut the service to the bone, and care about nothing only profit.

PeteFalk78

not yet wrote: »

It is vital to the argument that people realise that a PS worker will receive a small % of the state pension as it is means tested against any other income (PS pension) so in effect the state is saving approx 130euro per person per week on the state pension.

Is that true for post 1995 PS though? I thought that they have a Class A PRSI so will receive a full OAP upon retirement?

antoobrien

PeteFalk78 wrote: »

I did a very basic bare bones calculation for referral (quoted below). None of the PS bashers elaborated on it.

What are the assumptions it's based on apart from 60k salary (i.e. contribution rate etc).

Rightwing

not yet wrote: »

When services are sold off the only ones to win are big business.

They employ staff at minimum wage, cut the service to the bone, and care about nothing only profit.

If that's the market rate. I fail to see the advantage for instance in paying a bin man €40K p.a

not yet

PeteFalk78 wrote: »

Is that true for post 1995 PS though? I thought that they have a Class A PRSI so will receive a full OAP upon retirement?

Very few would have a full stamp entitling them to full state pension..

PeteFalk78

antoobrien wrote: »

What are the assumptions it's based on apart from 60k salary (i.e. contribution rate etc).

Isn't the contribution rate dependent on the salary?

Riskymove

PeteFalk78 wrote: »

Is that true for post 1995 PS though? I thought that they have a Class A PRSI so will receive a full OAP upon retirement?

they recieve the OAP but their Occupational pension is reduced by the value of the OAP so that the overall amount is the same

not yet

Rightwing wrote: »

If that's the market rate. I fail to see the advantage for instance in paying a bin man €40K p.a

Market rate = race to the bottom, but sure once we don't have to pay PS staff a living wage we all win.

Just on a side note...

People believe the average PS wage is 50K, this figure is distorted by taking into account every single person who receives a PS wage, from consultants on 250k to advisers on 200k, whilst the Private sector do not include chief executives bank managers or the like, just saying...

90% of people I know in the PS earn 25k-40k

Rightwing

not yet wrote: »

Market rate = race to the bottom, but sure once we don't have to pay PS staff a living wage we all win.

Just on a side note...

People believe the average PS wage is 50K, this figure is distorted by taking into account every single person who receives a PS wage, from consultants on 250k to advisers on 200k, whilst the Private sector do not include chief executives bank managers or the like, just saying...

90% of people I know in the PS earn 25k-40k

It really isn't.

not yet

Rightwing wrote: »

It really isn't.

Yes it is.

not yet

Market rate will always be determined by who else is offering the same service.

This leads to cutting costs to the bone to get the business, thus leading to wage cuts re: minimum wage.

Icepick

I am sure you race to the bottom when doing your weekly shop.

Rightwing

not yet wrote: »

Market rate will always be determined by who else is offering the same service.

This leads to cutting costs to the bone to get the business, thus leading to wage cuts re: minimum wage.

If the market rate for a secretary is €15 pr hr, and in the PS it's €30, one of them is inefficient. And let's just say, it's not the market rate.

not yet

Rightwing wrote: »

If the market rate for a secretary is €15 pr hr, and in the PS it's €30, one of them is inefficient. And let's just say, it's not the market rate.

I know of no secretary in the PS on 30euro per hour, but then again that's not what you want to hear.

Tigger

not yet wrote: »

When services are sold off the only ones to win are big business.

They employ staff at minimum wage, cut the service to the bone, and care about nothing only profit.

so private sector staff are paid minimum wage now?

Rightwing

not yet wrote: »

I know of no secretary in the PS on 30euro per hour, but then again that's not what you want to hear.

So in effect you are agreeing. The PS rate should be very similar to the market rate, ridiculing your other argument.

not yet

Rightwing wrote: »

So in effect you are agreeing. The PS rate should be very similar to the market rate, ridiculing your other argument.

If you say so..

Rightwing

not yet wrote: »

If you say so..

Otherwise the system is inefficient.

What the Government ought to be doing is slashing costs for everyone, both business and employees. A high cost economy will eventually lead to bankruptcy.

Peter Flynt

The public sector were the first to have separate financial cuts placed on them in 2009 when two budgets saw their pay reduced by an average of 15%.

They pay 63% of all income after 32,800 to the state.

Rightwing

Peter Flynt wrote: »

The public sector were the first to have separate financial cuts placed on them in 2009 when two budgets saw their pay reduced by an average of 15%.

They pay 63% of all income after 32,800 to the state.

We don't necessarily know if this is true or otherwise.

Many private sector companies may imposed cuts on employees prior to that. Many probably went bust, thereby deeming that a financial cut.

not yet

Peter Flynt wrote: »

The public sector were the first to have separate financial cuts placed on them in 2009 when two budgets saw their pay reduced by an average of 15%.

They pay 63% of all income after 32,800 to the state.

Shush..we don't like that talk round here.

antoobrien

PeteFalk78 wrote: »

That's 270k contributed to a pension over 40 years (we'll bring this down to 240k because of scales and salaries).


That person can expect a lump sum of 90k upon retirement. That brings the pot down to 150k of own monies put in. Excluding any SW handouts...... that person is entitled to 18k a year pension. 150k/18k = 8 years pension before they even reach parity with what they've contributed.

Is that a lush pension?

We get a pension booklet every year from the company that runs our (private) pension scheme. According to them, to fund €18,928.94 per year my final fund needs to be €478,564.90. There's no mention of a lump sum, but to give some equivalence, we'll assume that there's allowance for 20 years in there - that leaves 99,986.10 spare (roughly 21% of the fund).

The assumptions behind that are 10% salary contribution & 1,000 AVC per year, with 3% return on the fund annually and a 3% yearly increase in salary each year.

Back to our notional PS worker with a 270k fund. Using the same assumptions, 20 years + lump sum to spare, the the 240k funds would produce an equivalent private pension comprising of a €56,410.77 lump sum and an annual pension of €10,679.46.

PeteFalk78 wrote: »

Is that a lush pension?

Looks it from here.

Peter Flynt

antoobrien wrote: »

We get a pension booklet every year from the company that runs our (private) pension scheme. According to them, to fund €18,928.94 per year my final fund needs to be €478,564.90. There's no mention of a lump sum, but to give some equivalence, we'll assume that there's allowance for 20 years in there - that leaves 99,986.10 spare (roughly 21% of the fund).

The assumptions behind that are 10% salary contribution & 1,000 AVC per year, with 3% return on the fund annually and a 3% yearly increase in salary each year.

Back to our notional PS worker with a 270k fund. Using the same assumptions, 20 years + lump sum to spare, the the 240k funds would produce an equivalent private pension comprising of a €56,410.77 lump sum and an annual pension of €10,679.46.



Looks it from here.

The Public Sector worker (Post 1995) pays PRSI at the full rate (A1).

Unlike private sector workers they are not provided with the state OAP contributory pension which is 230 per week or 12K per annum.

ardmacha

antoobrien wrote: »

We get a pension booklet every year from the company that runs our (private) pension scheme. According to them, to fund €18,928.94 per year my final fund needs to be €478,564.90. There's no mention of a lump sum, but to give some equivalence, we'll assume that there's allowance for 20 years in there - that leaves 99,986.10 spare (roughly 21% of the fund).

The assumptions behind that are 10% salary contribution & 1,000 AVC per year, with 3% return on the fund annually and a 3% yearly increase in salary each year.

Back to our notional PS worker with a 270k fund. Using the same assumptions, 20 years + lump sum to spare, the the 240k funds would produce an equivalent private pension comprising of a €56,410.77 lump sum and an annual pension of €10,679.46.
.

These calculations ignore the fact that if a person paid in 270K over 40 years and they got 3% return then the pot would have grown to 470K odd, or much the same.

barneystinson

antoobrien wrote: »

We get a pension booklet every year from the company that runs our (private) pension scheme. According to them, to fund €18,928.94 per year my final fund needs to be €478,564.90. There's no mention of a lump sum, but to give some equivalence, we'll assume that there's allowance for 20 years in there - that leaves 99,986.10 spare (roughly 21% of the fund).

The assumptions behind that are 10% salary contribution & 1,000 AVC per year, with 3% return on the fund annually and a 3% yearly increase in salary each year.

Back to our notional PS worker with a 270k fund. Using the same assumptions, 20 years + lump sum to spare, the the 240k funds would produce an equivalent private pension comprising of a €56,410.77 lump sum and an annual pension of €10,679.46.



Looks it from here.

I've never heard of any pension scheme that didn't envisage 25% of the fund being paid as a tax-free lump sum at retirement. Not sure whether in your case that is additional to or included in your 478.5k figure...

patrick 1932

o great are fg-labr trying to out do ff and start buying votes next thing will be the tents at Galway races

not yet

patrick 1932 wrote: »

o great are fg-labr trying to out do ff and start buying votes next thing will be the tents at Galway races

Just show you get you out fg away here now for the same money.

since we are throwing words together I thought I'd join you.

PeteFalk78

antoobrien wrote: »

We get a pension booklet every year from the company that runs our (private) pension scheme. According to them, to fund €18,928.94 per year my final fund needs to be €478,564.90. There's no mention of a lump sum, but to give some equivalence, we'll assume that there's allowance for 20 years in there - that leaves 99,986.10 spare (roughly 21% of the fund).

The assumptions behind that are 10% salary contribution & 1,000 AVC per year, with 3% return on the fund annually and a 3% yearly increase in salary each year.

Back to our notional PS worker with a 270k fund. Using the same assumptions, 20 years + lump sum to spare, the the 240k funds would produce an equivalent private pension comprising of a €56,410.77 lump sum and an annual pension of €10,679.46.



Looks it from here.

Those figures I posted are the figures contributed to the pension purely from the public servant alone, it doesn't include any contributory funds added to by the employer/government. You didn't realise this or you chose to ignore?

Employer pension contributions in the private sector generally match the contributions made by the employee. If the same figure is applied to the public sector then that would give a pension pot of around .....boom......500k. excluding any pension returns previously mentioned by ardmacha

hmmm

PeteFalk78 wrote: »

Employer pension contributions in the private sector are around 50%.

What?

PeteFalk78

hmmm wrote: »

What?

Sorry typo. I mean typically the employer would match the contributions made by the employee.

Gumbo

PeteFalk78 wrote: »

Is that true for post 1995 PS though? I thought that they have a Class A PRSI so will receive a full OAP upon retirement?

Post 95 staff pay the same PRSI contributions as everybody in the workforce, but they don't get get the COAP on top of their pension, it's included and capped at 50% final salary.

not yet

kceire wrote: »

Post 95 staff pay the same PRSI contributions as everybody in the workforce, but they don't get get the COAP on top of their pension, it's included and capped at 50% final salary.

True, as I've been trying to say. If PS worker retires on 40k salary they get 400 a week pension, The state pension is means tested against this and they will get approx 80euro saving the state 156euro on their pension.

Gumbo

not yet wrote: »

True, as I've been trying to say. If PS worker retires on 40k salary they get 400 a week pension, The state pension is means tested against this and they will get approx 80euro saving the state 156euro on their pension.

Not means tested at all.
If I retire on a 40k salary, this getting a 20k pension, 12k is my COAP and 8k comes from my PS pension. That's the 20k make up. No means testing etc as it's set in stone.