Slashing Public Sector Pay

ardmacha wrote: »

perhaps McDonalds don't, but I didn't say all employers did. I referred to good practice by responsible employers.

think again

A Whopper of a Retirement Plan
Like with most retirement plans, McDonald's (NYSE:MCD) employees can contribute up to 50% of their pre-tax earnings in their 401(k). Most people don't. Financial planners often suggest employees contribute up to the amount employers will match in their 401(k) and then put the annual maximum in their Roth IRA (currently $5,000) and if they have anything left after paying the bills, to make a further contribution in their 401(k). The important word here is "match." Some companies won't (or don't) match their employee contributions. Not doing so is a morale deflator and to be avoided at all costs. That's not a concern at McDonalds. In fact, their match is overly generous, to the point of obscene.

The retirement savings plan provides those employees with one year of service a 300% matching contribution on the first 1% of earnings and 100% match on the next 4%. So, if you earn $50,000 annually at the Golden Arches and make a 5% or $2,500 contribution to your plan, McDonald's will kick-in $3,500. In addition, at the discretion of management, it will make a further profit sharing contribution on the next 4% in 2008. Overall, that's a 240% match. Not many can claim this privilege.

To stanch the bleeding of valuable talent, McDonald's in 2004 began offering a rich retirement savings perk. Employees who put 5 percent of their salary in the company 401(k) receive a company match of as much as 11 percent, turbocharging their savings right off the bat. To make sure employees take advantage of the program, McDonald's has made enrollment automatic. And to ease the pain of automatically deferring 1 percent of pay, the company gave managers a one-time, 1 percent salary increase.

ardmacha wrote: »

This point is often overlooked, or more likely deliberately ignored. Most people retiring now do not receive the OAP, so appearing to get bigger pensions. If they did receive the OAP state expenditure would be the same, but the PS pension bill less.

they didn't pay PRSI in full and it will take ages before post-96 will start to retire in mass

gigino wrote: »

He was talking about America. Ireland is a different country lol

?

so let me get this straight, you dont believe that McDonalds, Intel or Google, or indeed other firms make any employer contributions to pensions in Ireland?

Not too many employers in Ireland can or do afford pensions for employees , never mind public service type golden pensions.

again I dont see anyone suggesting that such companies gave employers the same kind of pensions

although they have up until recently of course (Banks, Insurance companies etc)

Drumpot wrote: »

You think since Jan 2010 the bridge has been gapped ? :rolleyes:

The piece you linked does not relate to the current pensions regime in the public service.

gigino wrote: »

Some employers are lucky enough to be in a position to contribute to employee pensions

thanks for that (grudging) admission

Well over a million of the people in the private sector have no pension

yes, that remains an issue of great concern

Jaysus, are we back here again - almost 3 years later trying to sort out the mess.
1. Not all public servants get this "Gold Plated pension" and like I said two years ago by the time the dust has settled a public service job/pension wont be of the same value as it was in the past.
2. A public service pension is also made up of the OAP pension - the component that is made up of just working in the public service isnt as high as the usual figures bandied about.
3. This figure is made up of an employee contribution (which has increased over the past few years), an employeer contribution, which, despite what some people say is relatively common place (maybe not as much of a percentage) for permanent full time employees of private sector companies as well. A portion of this pension is also made up of the aptly named spouse and childrens pension contribution.
4. There is no "opt out" of the scheme and the benefits drasticilly decrease if your time in the service is not full term (fair enough obviously)
Theres a few more negatives to it but predominately it is better than MOST offerings in the private sector.

Now, I dont think it's fair or indeed equitable AT ANY TIME, not just now, that a pensioner can walk away with one and a half times their salary tax free. Thats just wrong. I also dont think its fair that public sector pensioners have not seen their salary scale linked pensions fall in line with the salary scales cuts that have happened.
This has to change, but so to do pensions and they way they are managed in this country.
Everyone is bickering and arguing that we cant afford this any more - too right we cant - we've just blown approx 20+ billion of NPR funds on propping up dead, zombie banks - instead of using it to generate jobs and fund consistent revenue generating projects.
An increment freeze should have been the first thing any government does in times such as these - and a proper PDS system would have seen many of the useless wasters (there are a few of them) and pointless management posts eradicated long ago. As a country we are useless at doing this type of work though, it'll have to be forced on us.


The jobs for life, gold plated pensions are on the cusp of disappearing well, for the low to mid paid public servants anyway - not that thats a bad thing.

dan_d wrote: »

There's no dressing that up, and there's little or no equivalent in private industry.

Eh - that really depends on when you retired, the type of investments your pension fund was invested in and what level you worked at.
DB is definetly a great great pension but DC schemes can and have performed well at certain times - its all down to when your retire and the value of what you've it invested in.

Again though, I think pensions should be overhauled altogether, theres no real reason that Private sector workers on a similiar level to public sector workers cant receive a similiar pension - PROVIDED the public sector workers pensions come down/they pay tax on the lump etc.......

Drumpot wrote: »

the majority of the private sector does not enjoy anything near the kind of contributions that would bring them anywhere near what the value of the public service pension is.

no one said the majority did...tbh...there is constant moving of the goalposts on this point

sure I could say no PS will get close to Michael Fingleton's pension pot...what would that achieve?

as mentioned following the recent reforms PS now pay

c.7% contribution
another c.7% levy
PRSI
USC

and then a c.5% levy when they actually get the pension...plus the USC and any taxes that are liable

The average PS pay is €47 which corresponds to a pension of €23.5k (if you have 40 years service and not for new entrants)

of which €12k will be OAP and 11.5k the pension

Riskymove wrote: »

5. new entrants will have a 10% further reduciton in salary and will have a pension based on average salary as opposed to final salary meaning reduced pensions in the future

Reduced pensions "when" in the future? 30 or 40 years maybe, that'll do a lot for our current deficit