Average Civil Servant Pension - 1300 EUR a month

spuddy

From the Irish Times

If a young person aspired towards a pension of €24,000 per year, which is just below the average for retired civil servants last year, and wanted to retire aged 65, they would have to start investing €15,750 annually from age 25.

kona

spuddy wrote: »

From the Irish Times

Sure what ya gunna do about it? Nothing.

midnight city

spuddy wrote: »

From the Irish Times

The 12000 state pension is in that 24000 figure. So it only really an extra 12000 they get for working their 40 years.

Mantis Toboggan

spuddy wrote: »

From the Irish Times

Wow, just shows the gap between public and private sector workers.

Godge

spuddy wrote: »

From the Irish Times

There are a number of flawed assumptions in the actuary's calculations.

Firstly, it assumes an increase of 5% a year in the pension. Civil service pension levels are in or around 2006 levels - no increase in a decade.
Secondly, it takes no account of the fact that the civil servant belongs to a scheme where people die early and never collect a pension, are not married, have no children etc. Buying an annuity is not a real comparison.
Thirdly, it makes no allowance for the contributory State pension. A D-class civil servant retiring with a €24k pension doesn't get the contributory pension while the private sector comparator does. That means that the private sector individual only need to fund a pension of around €11,800 a year to have an equivalent pension.

This lazy analysis appears regularly in the media and online in order to bash public sector pensions rather than to compare the actual cost.

Nody

Am I the only one scratching my head how they went from 15.750 EUR a year for 40 years to a 24.000 pension? If we assume a 8% compounding (which is low; S&P 500 average around 10%) you'd end up with 4.406.551,38 EUR after 40 years. Now take that money and buy blue chip dividend stock at 4% dividend and you'd get 176.262 EUR a year in dividend payments without selling of any shares what so ever; to get 24k a month you'd need to drop the yearly contribution down to about 3.200 EUR a year (or 267 EUR a month) to net 24k a year after 40 year on dividends...

ancapailldorcha

I'm closing this thread as it's little more than a link dump. OP, please read the charter before posting again.