Government to reverse some Public Secor Pay cuts

kippy

kceire wrote: »

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.

Yep, if you finish your service on 40K per annum the actual portion of the pension that you get over and above the COAP is 8K per annum, assuming full service.
All those pension related deductions are paying for 8K a year in retirement and your lump sum essentially.
Gold plated - alright.
Index linking is a good thing and for pre 2010 entrants the final pension calculation definitely works in your favour.
Obviously the better the finishing salary you end up on the better off you will be in retirement especially due to the way the pension is calculated however not everyone can finish up a secretary general.......

Peter Flynt

kippy wrote: »

Yep, if you finish your service on 40K per annum the actual portion of the pension that you get over and above the COAP is 8K per annum, assuming full service.
All those pension related deductions are paying for 8K a year in retirement and your lump sum essentially.
Gold plated - alright.
Index linking is a good thing and for pre 2010 entrants the final pension calculation definitely works in your favour.
Obviously the better the finishing salary you end up on the better off you will be in retirement especially due to the way the pension is calculated however not everyone can finish up a secretary general.......

New entrants into the PS sector have their pension based on average career earnings.

So they'll never receive what they put in .

kippy

Peter Flynt wrote: »

New entrants into the PS sector have their pension based on average career earnings.

So they'll never receive what they put in .

Yes, I know that - I referenced it in the post.

barneystinson

Peter Flynt wrote: »

New entrants into the PS sector have their pension based on average career earnings.

So they'll never receive what they put in .

I wouldn't be so sure about that, to be fair.

Peter Flynt

barneystinson wrote: »

I wouldn't be so sure about that, to be fair.

There's no guarantee that any public sector worker will receive what was put in in the future.

There's no pension fund and default should not be ruled out.

barneystinson

Peter Flynt wrote: »

There's no guarantee that any public sector worker will receive what was put in in the future.

There's no pension fund and default should not be ruled out.

Hold on now, that's not what you were implying though.

You were suggesting that people in the new scheme getting a DB pension based on career average earnings won't get the value of their contributions back.

I'm simply saying I wouldn't be so sure about that, I'd say even on a career average pension, you'd still be in a situation where there would have to be employer contributions too (it's all a notional exercise since as you say there's no fund!).

And rightly so, why shouldn't there be an employer funded element, consistent with other occupational schemes. I'm just suggesting caution in not over-egging the case!

fliball123

PeteFalk78 wrote: »

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.

I never did an interview in the PS? When did I say that?

Sheldons Brain

fliball123 wrote: »

I never did an interview in the PS? When did I say that?

Probably people formed an impression that you have sought a Chair in Public Economics.

antoobrien

PeteFalk78 wrote: »

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

You see this is where the argument falls down, because the notional PS pension pot is not anywhere nearly based on contributions given throughout the working lifetime of a PS worker.

Take a teacher that has gone through the full pre 2011 into pay scale and finished at the top salary after 40 years service. This is 59359, but we'll use 60k for simplicity as it gives approximately the pension you have outlined.

Their total lifetime salary would be ~€725k, the pension deductions you have stated as a proportion of 60k salary is 11%. - total contributions of €81,683.33. Assume it's matched by the government, making the total pot €163,366.70 - sans investment increases. Identical to one of the projections in the brochure I mentioned yesterday.

Based on contributions, using the formula I've assumed for my pension at 21% lump sum and 20 years pension, that gives us (independent of investment returns) a lump sum of 34,307 with an annual pension of 6,452.99. Now bear in mind that this person may not be entitled to the COAP, as would be the case in your example, as they were on the Pre 95 PRSI rates.

In reality the notional pot based on this salary scale is wildly inflated as a teacher starting in 1974 would not have been getting IR£24,000 salary (in 1988, the average teacher salary was approx IR£16,000).

Is the 60k salary lush, hell yes.

chopper6

It's good news for us people in the Public Sector to have the pay cuts/pension levy restored....we took a disproportionate amount of the pain during the downturn caused by the private sector and we kept our word re no industrial action etc.


I intend to pay off my mortage quicker so as he banks get as little of my money in interest as posssible and where practical I will be doing my shopping online too.

Some elements of the irish private sector showed their true,bitter colours during this bloody mess and I will be doing my utmost not to support them.

Idbatterim

It's good news for us people in the Public Sector to have the pay cuts/pension levy restored....we took a disproportionate amount of the pain during the downturn caused by the private sector and we kept our word re no industrial action etc.

caused by the private sector? no, the buck stops with Bertie and Co and the regulator ultimately...

PeteFalk78

antoobrien wrote: »

You see this is where the argument falls down, because the notional PS pension pot is not anywhere nearly based on contributions given throughout the working lifetime of a PS worker.

Take a teacher that has gone through the full pre 2011 into pay scale and finished at the top salary after 40 years service. This is 59359, but we'll use 60k for simplicity as it gives approximately the pension you have outlined.

Their total lifetime salary would be ~€725k, the pension deductions you have stated as a proportion of 60k salary is 11%. - total contributions of €81,683.33. Assume it's matched by the government, making the total pot €163,366.70 - sans investment increases. Identical to one of the projections in the brochure I mentioned yesterday.

Based on contributions, using the formula I've assumed for my pension at 21% lump sum and 20 years pension, that gives us (independent of investment returns) a lump sum of 34,307 with an annual pension of 6,452.99. Now bear in mind that this person may not be entitled to the COAP, as would be the case in your example, as they were on the Pre 95 PRSI rates.

In reality the notional pot based on this salary scale is wildly inflated as a teacher starting in 1974 would not have been getting IR£24,000 salary (in 1988, the average teacher salary was approx IR£16,000).

Is the 60k salary lush, hell yes.

Where are you getting that figure from?

Peter Flynt

Fionnan Sheehan has an interesting article in todays (14 August 2014) Independent regarding the recent political kite flying exercise carried out by the Minister for Public Expenditure & Reform, Brendan Howlin

Public sector talks not limited to pay cuts - Independent.ie

The article above states that the "ongoing reform agenda and terms and conditions in the public sector will also be on the table in the negotiations". This is Croke Park 3 or Haddington Road 2 (whichever you prefer).

This ongoing "reform agenda" has one basic tenet for all public sector workers - Here are the extra demands (on top of the previous demands in previous "agreements") which are expected to be delivered by you and your union. I suspect that as part of the deal (Croke Park 3) the Government will agree not to cut pay and/or reduce separate public sector taxes and levies slightly to make it appear as if a pay cut has occurred when really these levies will remain in place.

Indeed the "agenda" has basically already been decided for each public sector worker in each Government department.

Let's take the teaching profession for example:

2010 - Croke Park Agreement - 33 extra hours plies a further 12 hours (as part of Partnership 2016) which the Government announced they won't pay for. 45 extra hours added.

2013 - Haddington Road Agreement - 43 extra hours unpaid S&S - A total of 88 extra hours.

2016 - Haddington Road "Part 2" - Teachers will supervise, assess and mark their own Junior Certificate students. Again UNPAID.

So the simple message is clear for the public sector worker. You're getting no PAY RISE. You'll be asked for more in return for small tiny changes to taxes introduced on you during the "emergency". Howlin has already made this quite clear recently when he stated that "there has to be an orderly wind-down, as opposed to a sudden ending"

Public sector staff in line for reversal of pay and pension cuts - Independent.ie

This is the equivalent of stating that in order for more demands for work I promise not to tax you separately (as a public sector worker) as much.

These are NOT pay rises.


So why the appearance and language use of a pay rise?

Because the Labour party are in serious trouble. It's not beyond the realms of possibility that the LP may go the same way as the PDs if, as seems likely, FF and FG form a coalition government in 2016 after a disastrous Labour election result. The resulting effect may see a left-right divide for the first time since Independence as the left unite around a resurgent SF and leave the LP to rot away.

This will have disastrous consequences for the unions.

So public sector workers are effectively going to be lobbied and/or bribed with their own money with separate public sector tax cuts dressed up as pay rises with more demands for additional work.

It's all a con (the Tesco advert Part 2) - and the Labour Party with their useless public sector unions are behind it.

Rightwing

Idbatterim wrote: »

caused by the private sector? no, the buck stops with Bertie and Co and the regulator ultimately...

Seriously.

It was all the fault of the private sector. They should be paying more taxes to fund the PS, Ahern & Neary & Co, did this country proud, and all those small businesses paying massive water charges, rates etc failed. They failed Ireland and shouldn't be allowed ever make a cent profit.

antoobrien

PeteFalk78 wrote: »

Where are you getting that figure from?
http://i59.tinypic.com/24zzuch.png

Bad copy and paste job, I'll correct

Peter Flynt

I also believe that the reversal of pay cuts installed on those who's pay was cut for a third time in Haddington Road - which are scheduled for 01 April 2017 and 01 January 2018 - will be conditional on the terms of this "new agreement" being agreed to by the unions.

kippy

chopper6 wrote: »

It's good news for us people in the Public Sector to have the pay cuts/pension levy restored....we took a disproportionate amount of the pain during the downturn caused by the private sector and we kept our word re no industrial action etc.


I intend to pay off my mortage quicker so as he banks get as little of my money in interest as posssible and where practical I will be doing my shopping online too.

Some elements of the irish private sector showed their true,bitter colours during this bloody mess and I will be doing my utmost not to support them.

This is the kind of thing that gives the public sector in general a very bad name.
Totally incorrect and mistaken.

Rightwing

kippy wrote: »

This is the kind of thing that gives the public sector in general a very bad name.
Totally incorrect and mistaken.

Correct.

You'd wonder do people even know that without a private sector, you won't even have a public sector? The mind boggles.

Peter Flynt

Rightwing wrote: »

Correct.

You'd wonder do people even know that without a private sector, you won't even have a public sector? The mind boggles.

It's the reverse

Without a public sector you don't have a private sector as without a public sector you cannot run a state.

kippy

Rightwing wrote: »

Correct.

You'd wonder do people even know that without a private sector, you won't even have a public sector? The mind boggles.

We're all reliant on each other to some extent!

Rightwing

Peter Flynt wrote: »

It's the reverse

Without a public sector you don't have a private sector as without a public sector you cannot run a state.

Where will the cash come from if there's no private sector?

kippy wrote: »

We're all reliant on each other to some extent!

Exactly - what most in the private sector want is value for money in the PS. Front line staff are delivering that.

Peter Flynt

Rightwing wrote: »

Where will the cash come from if there's no private sector?

Get over yourself - We all pay tax.

The euro paid in tax by a public sector worker is equivalent or the same as the euro paid in tax by a private sector worker.

Most private sector workers work for companies whereby the state is their major employer with sub-contracted work.

You've little understanding of how an economy actually works.

Rightwing

Peter Flynt wrote: »

Get over yourself - We all pay tax.

The euro paid in tax by a public sector worker is equivalent or the same as the euro paid in tax by a private sector worker.

Most private sector workers work for companies whereby the state is their major employer with sub-contracted work.

You've little understanding of how an economy actually works.

I suspect you can't answer the question. Why not?

It can't be answered.

kippy

Back to the economics side of it.

At this stage, as I see it, there are two key areas the government need to focus on.
1. Creating jobs.
2. The states debts in general.

1. Creating jobs or providing the environment in which jobs can be created is a huge area. Every person taken off the live register into a "proper" (ie not a jobbridge, internship, community scheme) paying job is probably a net improvement in the states finances of at least 20K per annum and up to two or three times that depending on salary etc.
Currently, in my opinion, there are still huge barriers to SME's and Startups in this country. These would include ridiculous amounts of paperwork/red tape (which the state can do something about), high energy/fuel/elec/heating etc costs (which the state can do something about), and highish rents (which again the state can do something about via Nama). Yet I see very littel being doing in any of those areas.

2. The national debt is HUGE. The interest repayments on an annual basis on it are HUGE. These both have to be reduced or refinances at lower rates at the very least. Savings on the periphery get eaten up by these interest payments. A few base points savings on the interest rates allow for a lot more money to be reinvested into the economy, allowing for investment in major infrastructure projects, adding to the jobs in the state and helping with point number 1.

There are still areas within the public service that can be improved on, no doubt, especially within the HSE - it's worse things seem to be getting here and this is an area that will impact on us all at some point.
In general I would question the amount of management grades within the CS and why there are so many as well as the logic behind a reform agenda in relation to centralised services, when you aren't going to take the staff that were in these services originally and redeploy them. (HSE was an example of this, and it seems to be happening on the Peoplepoint side of it as well)

Idbatterim

Seriously.

It was all the fault of the private sector. They should be paying more taxes to fund the PS, Ahern & Neary & Co, did this country proud, and all those small businesses paying massive water charges, rates etc failed. They failed Ireland and shouldn't be allowed ever make a cent profit.

Just to elaborate, after the regulator failed to do his job or was instructed not to. The blanket bank guarantee was a government decision. What happened with the banks the culture etc is so predictable and so human, I have no problem understanding that, that's why you have a regulator though, the Central bank etc & like I said, even when these failed, it was a government decision regarding the blanket guarantee...

barneystinson

chopper6 wrote: »

It's good news for us people in the Public Sector to have the pay cuts/pension levy restored....we took a disproportionate amount of the pain during the downturn caused by the private sector and we kept our word re no industrial action etc.


I intend to pay off my mortage quicker so as he banks get as little of my money in interest as posssible and where practical I will be doing my shopping online too.

Some elements of the irish private sector showed their true,bitter colours during this bloody mess and I will be doing my utmost not to support them.

Well there's cutting your nose off to spite your face if ever I saw it... Unless you're a communist, the public sector needs the private sector, otherwise we're all in the sh1t. Things only improve for everyone, once private sector demand in the domestic economy starts growing. An attitude like yours would see us all living in the mud together.

PeteFalk78

antoobrien wrote: »

Bad copy and paste job, I'll correct

I'll wait with baited breath.

Idbatterim

There are still areas within the public service that can be improved on, no doubt, especially within the HSE - it's worse things seem to be getting here and this is an area that will impact on us all at some point.

One area where I would imagine there is still a lot of low hanging fruit and outrageous waste is government procurement, you would think this would be an easy area for government savings as you the only people you would be pissing off might be suppliers and you arent going to be too worried about them come voting time! Dear god, I go looking for an article I read months ago on independent.ie where a public servant admitted the sheer waste of the current system and this is one of the first articles I find this dated 11th august!!!

http://www.independent.ie/irish-news/eu-raps-state-over-tendering-for-new-postcodes-30498098.html

Rightwing

PeteFalk78 wrote: »

I'll wait with baited breath.

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.

Rightwing wrote: »

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.

So will I.

Rightwing

Idbatterim wrote: »

One area where I would imagine there is still a lot of low hanging fruit and outrageous waste is government procurement, you would think this would be an easy area for government savings as you the only people you would be pissing off might be suppliers and you arent going to be too worried about them come voting time!

Areas like the quangos and councils. Pensions too, and by that I mean the likes of Neary/Ahern/J Bruton etc. That needs to be changed.

PeteFalk78

Rightwing wrote: »

So will I.

You won't get it as you edited it out.

Rightwing

PeteFalk78 wrote: »

You won't get it as you edited it out.

Show an edited post then.

PeteFalk78

Rightwing wrote: »

Show an edited post then.

CBA'd trawling through your posts, looking at them individually hurts my eyes enough. Could even have been in a different thread.

Rightwing

PeteFalk78 wrote: »

CBA'd trawling through your posts, looking at them individually hurts my eyes enough. Could even have been in a different thread.

Chuckle chuckle.

barneystinson

kippy wrote: »

In general I would question the amount of management grades within the CS and why there are so many as well as the logic behind a reform agenda in relation to centralised services, when you aren't going to take the staff that were in these services originally and redeploy them. (HSE was an example of this, and it seems to be happening on the Peoplepoint side of it as well)

Peoplepoint is a disaster in my experience, personally and as a manager. It took over 2 months for me to get a very simple issue resolved (my carried forward leave was too high, someone needed to reduce a figure in a box on a software system by 3 days). If it had happened last year, one phone call and it would've been resolved in about 90seconds.

Areas of the PS that had well functioning locally managed HR are now mired in bureaucratic back & forth with Peoplepoint; the local HR people still in situ and busier than ever trying to get Peoplepoint to either do their job or fix their mistakes...

kippy

barneystinson wrote: »

Peoplepoint is a disaster in my experience, personally and as a manager. It took over 2 months for me to get a very simple issue resolved (my carried forward leave was too high, someone needed to reduce a figure in a box on a software system by 3 days). If it had happened last year, one phone call and it would've been resolved in about 90seconds.

Areas of the PS that had well functioning locally managed HR are now mired in bureaucratic back & forth with Peoplepoint; the local HR people still in situ and busier than ever trying to get Peoplepoint to either do their job or fix their mistakes...

Yeah, at the moment there are definetly issues there however I would put them down to a few things in order of importance.
1. Existing HR units staying in place within the department it has always been in, instead of it somehow being merged inwith the peoplepoint setup.
2. Lack of clarity for staff on who looks after what.
3. Bedding in issues from all sides.

In theory centralising HR and later payroll for the public/civil service is a great idea. Will save on replication of work, staffing costs, software costs, premises costs, a heap of other costs and should lead to a more standard expericene across the departments in time. Staff should get familiar with the system and it should be a good thing.
However, if this is not implemented properly, in practice it is going to be very very messy. At the moment the implementation is not great.

antoobrien

PeteFalk78 wrote: »

I'll wait with baited breath.

Revised:

PeteFalk78 wrote: »

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

You see this is where the argument falls down, because the notional PS pension pot is not anywhere nearly based on contributions given throughout the working lifetime of a PS worker.

Take a teacher that has gone through the full pre 2011 into pay scale and finished at the top salary after 40 years service. This is 59359, but we'll use 60k for simplicity as it gives approximately the pension you have outlined.

Their total lifetime salary would be ~€2.04m, assuming the teacher reached the maximum pay rate after in year 25 of 40 years service (how likely is this?). I'll take a more reasonable approach that the teacher spent 1 year at each pay level up to level 10, then 2 years after that, meaning they spend the last 3 years at the maximum pay grade instead of 16. Total pay is ~€1.94m.


Teachers pay 5% into their pension, with a further 1.5%-2% going to the Spouses & Children pension, so we'll say total 7%. Total contributions of €135,800 personally, or 194,000 using your 11% rate.

There's still a big gap between either of these pots and your original claim of 270k or the adjusted 240k.

And in reality this notional pot is wildly inflated as a teacher starting in 1974 would not have been getting a 30k salary. In 1988, the average teacher salary was approx €20,000, my calculations put our notional teacher at point 12 in 1988 modern equivalent of 46,844 (about average based in the 2008 figures of 46k average). We can realistically half the earnings on that scale until 1991, which would bring us roughly in line with the average average of the time.

That reduces total pay to about 1.59m, assuming that our teachers wages are doubled between 1991 and 1992 (from 24998 to 49,996).

This reduces our notional contributions to 111,300 at 7% (the actual contributions) or 179,140 at 11% (your notional level).

I can go on and try to include salary inflation (averaging 4.5% for primary teachers between 1998 & 2008 ) to keep getting more accurate figures, but we both know that all it's going to do is take another significant chunk out of the pot.

Is the 60k salary based defined benefit pension still overly generous, yes.

Head The Wall

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.

So what you're trying to say is that effectively the value of the OAP has little do with the PS pension as ye will still receive 50% of final salary anyway.

If the OAP is €50 a week ye still get paid the same pension. I just see this as trying to muddy the water

Riskymove

Head The Wall wrote: »

I just see this as trying to muddy the water

it's only relevant when comparing to the cost of a comparable pension etc that people get caught up about


as these PS will have paid PRSI like PAYE private sector they recieve the COAP

therefore it is the remainder of the pension that is paid like a traditional PS pension and therefore that is what the cost is to public funds

creedp

antoobrien wrote: »

Revised:



You see this is where the argument falls down, because the notional PS pension pot is not anywhere nearly based on contributions given throughout the working lifetime of a PS worker.

Take a teacher that has gone through the full pre 2011 into pay scale and finished at the top salary after 40 years service. This is 59359, but we'll use 60k for simplicity as it gives approximately the pension you have outlined.

Their total lifetime salary would be ~€2.04m, assuming the teacher reached the maximum pay rate after in year 25 of 40 years service (how likely is this?). I'll take a more reasonable approach that the teacher spent 1 year at each pay level up to level 10, then 2 years after that, meaning they spend the last 3 years at the maximum pay grade instead of 16. Total pay is ~€1.94m.


Teachers pay 5% into their pension, with a further 1.5%-2% going to the Spouses & Children pension, so we'll say total 7%. Total contributions of €135,800 personally, or 194,000 using your 11% rate.

There's still a big gap between either of these pots and your original claim of 270k or the adjusted 240k.

And in reality this notional pot is wildly inflated as a teacher starting in 1974 would not have been getting a 30k salary. In 1988, the average teacher salary was approx €20,000, my calculations put our notional teacher at point 12 in 1988 modern equivalent of 46,844 (about average based in the 2008 figures of 46k average). We can realistically half the earnings on that scale until 1991, which would bring us roughly in line with the average average of the time.

That reduces total pay to about 1.59m, assuming that our teachers wages are doubled between 1991 and 1992 (from 24998 to 49,996).

This reduces our notional contributions to 111,300 at 7% (the actual contributions) or 179,140 at 11% (your notional level).

I can go on and try to include salary inflation (averaging 4.5% for primary teachers between 1998 & 2008 ) to keep getting more accurate figures, but we both know that all it's going to do is take another significant chunk out of the pot.

Is the 60k salary based defined benefit pension still overly generous, yes.

Not a pension expert in any way but I would have thought you would really have to impute some investment return into this analysis which would apply if an actual fund was established to fund the eventual pension. Is is the case that private pension funds simply pay out the value of contribution paid in?

antoobrien

creedp wrote: »

Not a pension expert in any way but I would have thought you would really have to impute some investment return into this analysis which would apply if an actual fund was established to fund the eventual pension. Is is the case that private pension funds simply pay out the value of contribution paid in?

Private funds only have to pay out of what is in the fund. So yes we have to look at returns, but then some of the projected returns I've given examples of assumed 3% average annual return and 3% average pay rises per year and those seem seem optimistic (I haven't had anything like a 3% pay rise in the past 3 years).

So given the fact that "the value of investments fall and rise" it seems prudent to be......conservative with potential futures. This is the reason that I've gone with actual contribution inputs as a result.

I could easily go with the 3% estimate, as the averaged return of my own pension fund is currently 3.65%, but then I remember when the value of my pension fund was down 1/3 on what I had paid in (I think it was 5k out of 15k lost at the time). If the fund was to pay out then, I'd be getting out significantly less than was paid in, a problem not faced by most PS workers (assuming some of them are on strictly contributory pensions like mine).

Just to show the kind of amounts involved, my current salary is 37,600. One of the projections puts my final pot at 478,564.90, with a pension of 18,928.94 and allowance for 2% annual increase (I had previously said there was scope for a lump sum, it appears that I was mistaken in this).

Sounds good right?

But then we look at the underlying assumptions under this projections.

Assumed return 3% per annum.
Assumed salary increase of 3% per year.

Both of those sound reasonable if a tad optimistic, until we take a look at what the second assumption means. A 3% annual pay rise would at retirement leave me with a salary of over 90k.

To get an equivalent 60k pension, that will be worth about 20% of my final salary.

If these assumptions hold, the total contributions for this pension will be 265k, which is 86k more than the inflated 11% PS example I was working on.

Harold Weiss

Sheldons Brain wrote: »

Immature nonsense. If salaries are increasing then so will those in public services, otherwise the chaos would get worse as anyone capable left.

Nobody in public sector seems accountable for anything so I see no reason to pay anymore for poor performance.

creedp

antoobrien wrote: »

Private funds only have to pay out of what is in the fund. So yes we have to look at returns, but then some of the projected returns I've given examples of assumed 3% average annual return and 3% average pay rises per year and those seem seem optimistic (I haven't had anything like a 3% pay rise in the past 3 years).

So given the fact that "the value of investments fall and rise" it seems prudent to be......conservative with potential futures. This is the reason that I've gone with actual contribution inputs as a result.

I could easily go with the 3% estimate, as the averaged return of my own pension fund is currently 3.65%, but then I remember when the value of my pension fund was down 1/3 on what I had paid in (I think it was 5k out of 15k lost at the time). If the fund was to pay out then, I'd be getting out significantly less than was paid in, a problem not faced by most PS workers (assuming some of them are on strictly contributory pensions like mine).

Just to show the kind of amounts involved, my current salary is 37,600. One of the projections puts my final pot at 478,564.90, with a pension of 18,928.94 and allowance for 2% annual increase (I had previously said there was scope for a lump sum, it appears that I was mistaken in this).

Sounds good right?

But then we look at the underlying assumptions under this projections.

Assumed return 3% per annum.
Assumed salary increase of 3% per year.

Both of those sound reasonable if a tad optimistic, until we take a look at what the second assumption means. A 3% annual pay rise would at retirement leave me with a salary of over 90k.

To get an equivalent 60k pension, that will be worth about 20% of my final salary.

If these assumptions hold, the total contributions for this pension will be 265k, which is 86k more than the inflated 11% PS example I was working on.

With all the uncertainties and downright spoofing in relation to potential returns by the private pension industry it is surprising that so many people want one. Having said that it you believe the experts, and presumably people do in the main otherwise why voluntarily hand over hard earned income to the pension industry, you will be looking at a pension of €30k per annum on retirement which is what a PS on €60k would be hoping for but likewise not guaranteed from his/her gold plated PS pension

antoobrien

creedp wrote: »

With all the uncertainties and downright spoofing in relation to potential returns by the private pension industry it is surprising that so many people want one.

It's that, other savings/investments or one of the OAPs, which don't pay an awful lot.

Pick one, most people go with the professionals because they probably can do better than we can.

creedp wrote: »

Having said that it you believe the experts, and presumably people do in the main otherwise why voluntarily hand over hard earned income to the pension industry, you will be looking at a pension of €30k per annum on retirement which is what a PS on €60k would be hoping for but likewise not guaranteed from his/her gold plated PS pension

If I believe them I'll get 30k (18k + COAP) off a final salary of 90k, with no lump sum, from my investment of 265k.

If I was on a PS pension as I understand it's set up for the post 95 workers, for the equivalent final salary I'd be getting ~33k + COAP and 135k of a lump sum from the same investment.

See the difference?

mirrorwall14

antoobrien wrote: »

If I believe them I'll get 30k (18k + COAP) off a final salary of 90k, with no lump sum, from my investment of 265k.

If I was on a PS pension as I understand it's set up for the post 95 workers, for the equivalent final salary I'd be getting ~33k + COAP and 135k of a lump sum from the same investment.

See the difference?

For post 95 workers the COAP is included in that 33k and is not an additional benefit

For post 2011(I think thats when it was floated) workers the pension is based on career average not on final salary.

chopper6

Rightwing wrote: »

Exactly - what most in the private sector want is value for money in the PS.

Thats a bit rich considering they cant even deliver value for money for themselves.

Most pubs in dublin city are charging more than 5 euros a pint with some nearer to 7 euros.

House prices are starting to creep back up again as the estate agents and thier lackies in the Indo try to kick-start the construction sector again.

An average meal in an average restaurant will usually cost 25 per head without wine.

Arse-scratching "tradesemen" are back to thier old tricks,arriving late(if at all) and trying to overcharge for routine work.

Private landlords are driving the cost of rental property through the roof as they seek to gouge more and more money out of innocent tenants.

Irish dental treatment is the most expensive in europe.


GPs are still charging a minimum of 50 euros for a "consultation".

The cost of private health insurance has gone through the roof.

Creches are charging outrageous fees for childcare.


Petrol stations are continuing to profit heavily by charging inflated prices n teh forecourt despit stability in the regions they source the fuel from.

Great value for money we're getting.

luckyboy

mirrorwall14 wrote: »

For post 95 workers the COAP is included in that 33k and is not an additional benefit

For post 2011(I think thats when it was floated) workers the pension is based on career average not on final salary.

I think what antobrien was saying was that, if he was in the PS and reached a 90k salary by retirement, he'd get a 45k pension, made up of 33k in return for his contributions plus 12k in COAP ...

His 135k lump sum equates to 120/80 of his final 90k salary, so I presume that's what he was saying ...

luckyboy

chopper6 wrote: »

Thats a bit rich considering they cant even deliver value for money for themselves.

Most pubs in dublin city are charging more than 5 euros a pint with some nearer to 7 euros.

House prices are starting to creep back up again as the estate agents and thier lackies in the Indo try to kick-start the construction sector again.

An average meal in an average restaurant will usually cost 25 per head without wine.

Arse-scratching "tradesemen" are back to thier old tricks,arriving late(if at all) and trying to overcharge for routine work.

Private landlords are driving the cost of rental property through the roof as they seek to gouge more and more money out of innocent tenants.

Irish dental treatment is the most expensive in europe.


GPs are still charging a minimum of 50 euros for a "consultation".

The cost of private health insurance has gone through the roof.

Creches are charging outrageous fees for childcare.


Petrol stations are continuing to profit heavily by charging inflated prices n teh forecourt despit stability in the regions they source the fuel from.

Great value for money we're getting.

Hard to disagree with much of this. If we accept that the Irish PS has many failings, we should also accept that standards are not always necessarily the highest in the Irish private sector either. This is, of course, a generalisation. There are outstanding performers in both sectors, whose performances can be obscured by their less-industrious colleagues.

I have always wondered though, why the private sector - collectively - has not taken its share of the blame for some of the colossal misjudgments it made during the boom years.

_Kaiser_

luckyboy wrote: »

I have always wondered though, why the private sector - collectively - has not taken its share of the blame for some of the colossal misjudgments it made during the boom years.

But it has - through huge numbers of businesses going bust, layoffs and cutbacks.

Though there are those in certain sectors who effectively own the politicians through donations, lobbying and friendships (of convenience) - those are the ones who are insulated from the blame for a situation they (to varying degrees) actually caused.

Head The Wall

Riskymove wrote: »

it's only relevant when comparing to the cost of a comparable pension etc that people get caught up about


as these PS will have paid PRSI like PAYE private sector they recieve the COAP

therefore it is the remainder of the pension that is paid like a traditional PS pension and therefore that is what the cost is to public funds

Explain then to me the anomaly of how people that haven't contributed get a pension roughly €10 less than people do. PRSI doesn't just pay for pensions and from above it effectively pays little towards the OAP

My point still stands, the PS pension is still 50% of the final salary regardless of what the OAP is