Teachers leaving Dublin schools due to accommodation costs

gaiscioch

I see this story is finally getting some publicity today:

https://www.independent.ie/irish-news/politics/taoiseach-tackled-in-the-dail-over-teachers-leaving-the-capital-due-to-soaring-house-prices-41833886.html

I'm in a Dublin school and once again this year it's a problem. We lost one tenth of our staff this May because they've got jobs outside Dublin. Well, one or two of them haven't got jobs but figure they'll be better positioned in their chosen area than paying accommodation costs in Dublin for another year. In each case, property prices was the deciding factor (childcare costs were a secondary factor for some).

How are other countries solving this issue of key staff not being able to afford accommodation in their most expensive cities?

A quick google and it seems we are decades behind New South Wales in Australia which:

[quote]The Teacher Housing Authority of New South Wales (THA) is a statutory corporation constituted under the Teacher Housing Authority Act 1975 as amended. Under the Act, the principal object of the THA is to provide and maintain suitable and adequate housing accommodation for teachers. The THA also: • initiates, promotes, commissions and undertakes surveys and investigations into the housing needs of teachers; • undertakes, promotes and encourages research into the design, construction and maintenance of housing suitable for teachers; • plans the provision of a comprehensive and coordinated housing service for teachers throughout country New South Wales; • provides, conducts, operates and maintains a housing service for teachers; and • advises and makes reports and recommendations to the Minister in respect of matters relating to the housing of teachers.[/quote] [https://www.dpie.nsw.gov.au/__data/assets/pdf_file/0005/326255/08-tha-annual-report-11-12.pdf]

In Britain, they have a Teachers' Housing Association since 1967: http://www.teachershousing.org.uk/about-us/

Gardaí, nurses, firemen and other key staff are undoubtedly enduring a similar problem. One thing which strikes me is that many schools could, with a bit of joined-up thinking from the DoES, Revenue and the schools, utilise school or church property (the latter own the vast majority of the school properties) to help solve this issue. At least the younger, single, poorer-paid teachers might get some reprieve there and hang on in Dublin schools.

Treppen

You're talking about a problem right now, teachers leaving schools and more temp teachers taken on actually solves a future problem of overquotas and redeployment in about a decade.

The crest of the population boom is between 3rd class and 2nd year right now, once they pass through the system the student population is going down.

I think it's only right that the department should plan for the future, and they can do this by doing what they do best.... Nothing.

am_zarathustra

Even the simple solution of paying a top up like they do in London to acknowledge the cost of living would go a long way to solving this issue.

Flinty997

https://www.boards.ie/discussion/comment/119328404#Comment_119328404

All that will do is add fuel to the fire.

If something is unsustainable the quicker is pushed to collapse the better.

am_zarathustra

The problem is that the cost of accomodation in Dublin isn't unsustainable, wages in the private sector enssure they aren't. The prices around now are not down to intervention in the market but rather the preponderance of FDI and the high wages they brought with them mixed with a lack of supply.

County councils building at scale is the real answer but there doesn't seem to be an appetite for that.

We've had a couple of young teachers buy with the county council mortgages, be helpful if the unions pushed these heavily

spontindeed

https://www.boards.ie/discussion/comment/119328534#Comment_119328534

I don't think Council housing is the answer because they tend to attract undesirables into an area. The accommodation costs are effecting everyone in ordinary private sector jobs as well so we should keep this in mind.

Treppen

https://www.boards.ie/discussion/comment/119407908#Comment_119407908

I think the private sector workers accommodation issue is separate to this topic.

It's about ensuring there are enough teachers for our current children. There's a reason why other countries offer incentives to public sector workers in major cities.

solerina

If they removed the pension related deduction then teachers etc wages would be so much better and people could actually afford to take jobs in Dublin.

Ouch Chinese Byrne

Can’t they just be replaced with the Temps who already live or are from Dublin.

im sure they would jump at the chance of becoming full time teachers

dotsman

https://www.boards.ie/discussion/comment/119538850#Comment_119538850

But then teachers would have a $hite pension when they retire. That's hardly a solution.

Treppen

https://www.boards.ie/discussion/comment/119538891#Comment_119538891

Sorry to break it to You but the new pension scheme system ensures they have an utter $hite pension when they retire anyway.

This hits hard especially at secondary where the career average royally screws teachers on part time contacts for years... and that's assuming you go straight from college to work (ideally a BEd!!). Quite a few people come to teaching say in their late 20s early thirties, add on potentially 8-10 years before full hours, then you're really starting full payments in your late 30s. Now compare that to the older scheme where it was based on final salary, and you'll see that the 'golden public sector pensions ' are now a fairy tale.

If I were an nqt now I'd be far better off cancelling any department of education pension contributions and investing that money myself, either stick it into a Zurich PRSA or use it to fund a mortgage and pay it off quicker.

At the moment ,all these deductions ensure is that you have less money to save or ,god forbid, enjoy!

dotsman

https://www.boards.ie/discussion/comment/119540248#Comment_119540248

While the new pension scheme is not as amazing as previously, it is still very good compared to the normal private sector one and is definitely a lot better than not contributing anything which the previous poster suggested.

2011abc

https://www.boards.ie/discussion/comment/119541684#Comment_119541684

The unions hired actuaries to calculate that the new pension is just another tax unless you live to 134 or something!

dotsman

https://www.boards.ie/discussion/comment/119542513#Comment_119542513

I would love to see those figures!

I think the unions are telling porkies.

SwimClub

I'm on the new pension scheme and I had a quick look at my total contributions for this year and what that buys me in terms of a pension, as per the single scheme excel calculator.

If you look at an annuity rate of around 3% at the moment, the increase to my pension that my contributions buy implies a certain investment fund sum required to buy the annuity on retirement and that sum is the future value of my current contribution in the scheme. Under this calculation my pension implies an investment return of only 3% per annum on my contributions until retirement, which does seem really low and as a previous poster mentioned on average historically you would do much better with a PRSA.

Interest rates and annuity rates are at all time lows, so taking that into account the implied investment return could look a lot bleaker, e.g. if annuity rates on my retirement were 6% then the implied investment return of my contributions would only be 1.5% (as half the fund would buy you the same annuity due to rates being 6% instead of 3%).

Where the calculations get more complicated is that when you get closer to retirement your contributions earn you the same increment in pension in the scheme, but your contributions are only invested over a short period so the overall weighted average investment return for your fund would be better than implied above. I don't have the time to work that out right now!

But overall, it doesn't look anything like a 'gold plated' scheme and my suspicion is that we are indeed funding the much better final salary scheme and it is in effect a tax.

who what when

Correct me if I'm wrong but a teachers salary starts at 38k. Now what about the scores of workers like those who work in shops, restraunts, childcare etc? How are they able to afford to work and live in expensive cities when they will likely never even reach 38k let alone start on it.

Treppen

https://www.boards.ie/discussion/comment/119542969#Comment_119542969

What do you mean by "it is still very good compared to the normal private sector one"

... Are you seriously comparing to private sector teachers pensions?

At least if you are a privately paid teacher you have 100% control of your own pension contributions, plus there are some schools who also CONTRIBUTE on top of the employees contributions.

BTW most private sector employers of professionals also contribute to employee pension schemes ... what does the department add on top of the teacher contributions?

Anyhow heres the report, Knock yourself out.

Keep in mind, the assumption is that these NQTs would begin working full time between ages 21-25... Which of course you know about the reality of this.

INTO-TUI-pensions-1-Single-Scheme (1).pdf

https://paycommission.gov.ie/wp-content/uploads/INTO-TUI-pensions-1-Single-Scheme.pdf&ved=2ahUKEwi6grfXnu_5AhWJR8AKHePYAV0QFnoECC8QAQ&usg=AOvVaw230cNBs7vu7bHEzjS0rcQQ

"

The value of many teachers’ contributions under the proposed new scheme will exceed the value of benefits, a situation which is grossly unfair and which may be open to legal challenge especially since membership is compulsory. A meaningful employer contribution is a statutory requirement for private sector schemes."

"  The new scheme would result in a scheme pension of 26% of final salary after working for 43 years, compared to a 32% pension for working 40 years at present (lump sum falls from 150% to 129%). The disimprovement in conditions would be more severe for a teacher who is promoted in late career."

https://www.tui.ie/_fileupload/Trident%2520Report%252015%2520point%2520summary%25201110.doc&ved=2ahUKEwiDmbqTnO_5AhVbSEEAHXp8CVMQFnoECAsQAQ&usg=AOvVaw18G64iq3_p0CzW0J12QW51

893bet

Off topic but for a teacher starting now what percentage do they pay into their pension and what percentage of salary will their pension be?

hamburgham

https://www.boards.ie/discussion/comment/119544457#Comment_119544457

38k for 8 months. You should pro rate to get comparable 12 month figure.

GAAcailin

I disagree with Teachers being able to take career breaks for an extended period. I know 3 teachers that took 5 years career break (renewed year on year) and then resigned. I think a year (possibly 2) career break is fine but then would need to resign, that permanent position would be freed up for another teacher; very difficult for schools constantly trying to find subs.

one teacher in our school who took the 5 years (year on year) and then resigned was replaced over this period by 6 different subs..

hamburgham

https://www.boards.ie/discussion/comment/119544560#Comment_119544560

Yes, I can’t understand why there hasn’t been a word about these career breaks in all the discussions about teachers only being offered temporary positions.

HazeDoll

https://www.boards.ie/discussion/comment/119544457#Comment_119544457

Find me a teacher who started on 38k. I keep hearing about them but I have never met one.

dotsman

https://www.boards.ie/discussion/comment/119544493#Comment_119544493

The "normal private sector one" is for the employer to make zero contributions.

Now, I've searched that document high and low, but couldn't find anything about living to 134, so I'm still going to use the phrase "porkies".

But I did find this:

"Average percentage of cost paid by member 95% | 88% | 91% | 85% | 88% |82% "

Basically, on his assumptions, and using his examples, the employer is paying from 5%-18% of the pension. As per my post, this is obviously not as much as the old pension scheme, but is still good, and a lot better than most have it.

But the reality is that the author is missing 1 huge assumption (maybe it is there, but couldn't find it in the document). The teacher's pension is guaranteed. That is a prenominal cost, so to exclude it is a massive oversight and hugely distorts the figures (coincidentally in the union's favour). Thus, his figures are based on a 72.64% mix of equities throughout the the person's career. This is completely at odds with a standard private sector worker, all because of the lack of guarantee. As a result, he is not even comparing apples and oranges, but comparing apples and books.

Change the asset mix to cater for a private sector worker wanting a low risk (they will never be able to get a guarantee) pension, and that 5%-18% would probably move close to 50%

So let's look at some big figures that don't require big (or missing) assumptions...

For a person who works as a teacher for their whole career and retires at normal age, this scheme guarantees them a pension of 42% of their retiring salary. All for an average (total) annual contribution of what, 10%ish (tax deductible)?

There are a lot of people reading this thread who would (or should if they had any sense) bite your hand off if you offered them that.

How anyone can call a huge benefit "a tax" is perplexing to me.

As for the second link, it doesn't work, so not sure what you are referring to. Bu anyone who is even talking about hte pension only being worth 26% is playing fast and loose with the truth so is probably best ignored.

https://www.boards.ie/discussion/comment/119544425#Comment_119544425

Firstly, talking about annuity rates of 6% on your retirement is very dangerous. It is a lot more than just interest rates; the low annuity rates we have seen for a long time are based on the continued increasing life expectancy of retirees.

As for your calculations, are you adjusting for inflation? Are you taking into account the investment strategy to get as close to guaranteeing a pension of 42% of retirement salary?

I don't think anybody is referring to the current public sector pension as "gold-plated". But it is still a good pension and the very opposite of a "tax".

Considering the low contribution figures required, I assume you are both also contributing to a PRSA as well?

Geuze

https://www.boards.ie/discussion/comment/119544511#Comment_119544511

Most public servants pay 6.5% pension contribution, plus 10% on all income over 34k.

Pension is 1/80 of salary per year worked, with a max of 40/80.

SwimClub

https://www.boards.ie/discussion/comment/119545531#Comment_119545531

The scheme works out as a percentage of average salary not 42% of final salary, that is a huge difference. What you are not factoring in is that there are multiple schemes paid out of the same theoretical pension pot, where the overall figures have to balance - new entrants are paying more for less, and part of what they are paying is funding the older much more generous schemes - that is effectively a tax on the new entrants to pay the older entrants benefits.

In the new scheme every year you get some accrued benefit on retiring that is a fraction of your exact salary that year. If you end up retiring on double your current salary the benefit under the old scheme related to the current year worked is double that of the new scheme. That is the exact benefit I used in my calculation and even with 3% annuities the implied return is terrible.

SwimClub

Also I don't think you are interpreting the figures below correctly:

""Average percentage of cost paid by member 95% | 88% | 91% | 85% | 88% |82% "

Basically, on his assumptions, and using his examples, the employer is paying from 5%-18% of the pension. As per my post, this is obviously not as much as the old pension scheme, but is still good, and a lot better than most have it."

If the employee pays 92% of the final value of the pension that does not imply the employer is paying 8% per month. It means that is the employee contributes 7% a month the employer contributes roughly half of one percent per month. That is way lower than a normal employer contribution in industry.

893bet

https://www.boards.ie/discussion/comment/119546949#Comment_119546949

Assuming tax relief on the contribution?

If so then that doesn’t seem a terrible deal that is being made out.

is the old age penguin paid in addition to the teachers pension?

Geuze

Yes, tax relief as normal on all pension conts.

Be careful, the new Single PS scheme is a CARE scheme - Career Average Earnings, so you won't get 40/80 of final salary.

Whereas people hired pre 2013 can get up to 40/80 of final salary.

The State Pension (Contributory) is included in the max 40/80, it is not extra.

dotsman

https://www.boards.ie/discussion/comment/119547025#Comment_119547025

In the examples given in the doc, the pension received for that "average" "career" teacher worked out to be 42% of final salary. While it is different for everyone (depending on age you start/retire etc), the 42% is a "typical", with most people getting slightly above/below that.

You need to stop comparing it to the old pension scheme. That is long gone and never coming back, and seems ot be confusing you. When comparing it to something, it is best to compare it to the typical private sector worker.

https://www.boards.ie/discussion/comment/119547124#Comment_119547124

I assure you I am interpreting those figures correctly. Based on the examples given, the employer is paying 5%-18%. While I can't find any decent breakdown online, it is clear that way over half of employers contribute 0%. That is worth repeating - Zero, Nada, Zilch.

But, of course, you didn't include the second point after that. That he never included the cost of the guarantee in his calculations which is huge. Including that could easily increase those figures to 50%, which would bring it line with the top private sector employers.

Treppen

Name this typical private sector worker.... Hairdresser.... Solicitor....Truckdriver?

SwimClub

https://www.boards.ie/discussion/comment/119547757#Comment_119547757

average private sector was 7.7 to 7.9% of salary contributed by employer, 10 years ago, cant see it changing massively:

https://www.ft.com/content/3fdc1d76-2746-11e1-b7ec-00144feabdc0

Again the figures you reference for public sector of employer contributing in the region of 10% of the final value of the pension that means employee contributes 90%.

So to work out the salary percentage contributed by employer, we know the public sector employee contributes 6.5 to 7%, if that corresponds to 90% of the pension value then the 10% contributed by the governent is one ninth of that - less than 1% of salary matching by employer. That's a joke relative to industry norms where 5% is considered low. The fact it is guaranteed IS taken into account in the calculations as they estimate the cost of the relevant annuity. It is a very bad deal in pension terms and the elephant in the room is that they cant afford a decent one (even industry standard one) due to the liabilities on the older entrant side, where their pension is ridiculously good.