End public-sector pensions

Permabear

This post has been deleted.

JustinDee

donegalfella wrote: »

This post has been deleted.

Agreed.

douglashyde

Public Sector workers DONT pay PRSI YET their pensions are worth more than a state pension.

It's not their fault they are paid so much. But they certainly dont have a right to harper on about getting stuffed with the bill. THEY ARE THE BILL!

In my opinion

douglashyde wrote: »

Public Sector workers DONT pay PRSI YET their pensions are worth more than a state pension.

It's not their fault they are paid so much. But they certainly dont have a right to harper on about getting stuffed with the bill. THEY ARE THE BILL!

Bull. Public Sector workers pay full A PRSI, 6.5% into pension fund from 1st day of service and also now paying 6.5% into a pension levy. I know this is my situation.

Celticfire

douglashyde wrote: »

Public Sector workers DONT pay PRSI YET their pensions are worth more than a state pension.

Thanks for that, I'll get onto payroll immediately and make sure I get reimbursed for all those years I was wrongly paying PRSI...

granturismo

douglashyde wrote: »

Public Sector workers DONT pay PRSI YET their pensions are worth more than a state pension.

Wrong - Post 1995 staff have full PRSI deductions, pre 1995 staff half PRSI and pre 1982 (I think) have no PRSI deduction.

Tipp Man

The problem isn't whats going in to the pensions, its whats coming out and whats due to come out

for the governemnt to have 350k people on defined benifit pensions is pure madness and needs to be stopped asap

The governement should have a defined contribution scheme where they will match an employees contributions up to 5% of salary - anything after that comes from the employee. I think this is the most common type of pension for "office" staff in the private sector and is the fairest. using this method the pension cost is all current and there isn't a huge potential liability waiting to sink the state, especially considering the excellent salaries that public sector workers are now on

stevoman

douglashyde wrote: »

Public Sector workers DONT pay PRSI YET their pensions are worth more than a state pension.

It's not their fault they are paid so much. But they certainly dont have a right to harper on about getting stuffed with the bill. THEY ARE THE BILL!

Yes they do. Any PS employee who was hired in the last 15 years pays full PRSI so please do some research.

w123

In my opinion wrote: »

Bull. Public Sector workers pay full A PRSI, 6.5% into pension fund from 1st day of service and also now paying 6.5% into a pension levy. I know this is my situation.

As someone else said, PS workers since 1995 pay full A class PRSI.

But - and this is a big one.

They get a BIG pension - GUARANTEED - and it only costs them a max of 7%of salary. They also get a tax free gratuity 6 months salary or something.

This pension doesn't know the vagaries of the market either.

Either it has to end or the PS workers have to pay for it. Or suffer losses/gains like anybody else in a defined contribution scheme.

I don't begrudge them this pension, what I object to is the whinging that went along with the PS levy.

The PS wanted parity with private sector workers during the boom - but only on their own terms.

In my opinion

w123 wrote: »

As someone else said, PS workers since 1995 pay full A class PRSI.

But - and this is a big one.

They get a BIG pension - GUARANTEED - and it only costs them a max of 7%of salary. They also get a tax free gratuity 6 months salary or something.

This pension doesn't know the vagraies of the market either.

Either it has to end or the PS workers have to pay for it. Or suffer losses/gains like anybody else in a defined contribution scheme.

I don't begrudge them this pension, what I object to is the whinging that went along with the PS levy.

The PS wanted parity with private sector workers during the boom - but only on their own terms.

Public servant pays from first day of service into their pension, my case will be 40 years. Now compare that to private sector workers how many start their pension at age 22?

The pension levy was a stupid fine on public service employment and I feel it is unfair, people with out pension cover should have to pay that levy not those with.

w123

In my opinion wrote: »

Public servant pays from first day of service into their pension, my case will be 40 years. Now compare that to private sector workers how many start their pension at age 22?

The pension levy was a stupid fine on public service employment and I feel it is unfair, people with out pension cover should have to pay that levy not those with.

2-6% paid into your pension - with tax relief, and no choice in the matter.
I'll bet that 22 year old you would have preferred the cash.

more than offset by the fact that you weren't paying PRSI.

The pension levy is finally the government realising that they cannot afford the luxury of a content PS and showing some willingness to make them work for their salaries and pay for their perks.

It seems that the days of partnership are coming to an end and we will now have a somewhat normal employer/employee relationship with the employer having the upper hand. I welcome this.

anymore

In my opinion wrote: »

Public servant pays from first day of service into their pension, my case will be 40 years. Now compare that to private sector workers how many start their pension at age 22?

The pension levy was a stupid fine on public service employment and I feel it is unfair, people with out pension cover should have to pay that levy not those with.

The pension contributions being made now by PS workers do not even remotely cover the pensions and the huge tax free lump sum they receive at retirement. There is no equality between Private and public sector workers and very little equality in productivity. The annual increments pa.id to PS workers are one of the most ludicrous examples of how PS workers are paid ever more as their productivity decreases.

In my opinion

w123 wrote: »

2-6% paid into your pension - with tax relief, and no choice in the matter.
I'll bet that 22 year old you would have preferred the cash.

more than offset by the fact that you weren't paying PRSI.

The pension levy is finally the government realising that they cannot afford the luxury of a content PS and showing some willingness to make them work for their salaries and pay for their perks.

It seems that the days of partnership are coming to an end and we will now have a somewhat normal employer/employee relationship with the employer having the upper hand. I welcome this.

1. 6.5% paid by me into my pension from day one no choice.
2. Full PRSI stamp paid by me from day one no choice.
3. Private sector employee at 22 not paying into a pension cause he has a choice.
4. My job is pensionable and permanent that's part of reason I choose to do it.
5. I work for my salary.

johnnyrotten

w123 wrote: »

2-6% paid into your pension - with tax relief, and no choice in the matter.
.

Where did 2-6% come from?

anymore

In my opinion wrote: »

1. 6.5% paid by me into my pension from day one no choice.
2. Full PRSI stamp paid by me from day one no choice.
3. Private sector employee at 22 not paying into a pension cause he has a choice.
4. My job is pensionable and permanent that's part of reason I choose to do it.
5. I work for my salary.

Workers in the construction sector have no choice about the pension deductions from thier salary ! Well I suppose 150,000 of them no longer have to pay into a pension fund as they are on the dole. And of these some of them will possibly find that that the companies they were working for are now bankrupt and the possibility exists that not all of the deductions taken from thier salary were paid into pension funds. many if not all of these pension funds are worth but a fraction of the original contributions.
Work to reule is not an option for most private sector employees. It is a perk of the job for PS as are the sick days etc....

The_Honeybadger

In my opinion wrote: »

Bull. Public Sector workers pay full A PRSI, 6.5% into pension fund from 1st day of service and also now paying 6.5% into a pension levy. I know this is my situation.

That does not even come close to covering the cost of your lump sum and pension. You would need to be 30-40% of your gross salary to do this.

However it was a condition when you joined and should not be changed. The pension levy was a crude and underhanded paycut, and the government should have called it just that.

Didn't they change the pension entitlements for new entrants in budget 10? It will no longer be 50% of final salary but 50% of the average salary over the employees career, so they have adjusted it. Personally I believe new recruits should be made take out a private pension like the rest of us, working for the state should not mean special treatment. Otherwise privatize everything that we can. It would be grossly unfair to change the pension entitlements of those currently within the service however, I imagine it may be illegal too.

w123

In my opinion wrote: »

1. 6.5% paid by me into my pension from day one no choice.
   to get the pension that you will receive you should have been paying 20-30% more.
2. Full PRSI stamp paid by me from day one no choice.
   This is at odds with what a few other posters have said about how PRSI workd in the PS, you say that you're there almost 40 years, that would mean that you started pre 1982 - My mistake there
3. Private sector employee at 22 not paying into a pension cause he has a choice.
   No, because at 22 it is only PS workers who can afford to pay.
4. My job is pensionable and permanent that's part of reason I choose to do it.
   Then don't complain about it
5. I work for my salary.
   Like the Passport office workers or all of the other 'work-to-rulers'?

?

w123

johnnyrotten wrote: »

Where did 2-6% come from?

I made it up

leabharin

As a public servant, I have been paying for my pension since my first day of employment. I am paying 6.5% of my salary into the pension. I am also paying a Class A PRSI stamp, which will NOT entitle me to an Old Age pension, because as a public servant I will receive only one pension. Compare this to my father who retired from the private sector. He will receive a defined benefits pension from his company, along with the Old Age pension. Which of us will be better off? From what he calculates, he will be better off by far. I expect to pay for my pension - and that is what I am doing. There will be no Rolls Royce pension for public service workers. Hopefully, there will be enough to live on.

doc_17

douglashyde wrote: »

Public Sector workers DONT pay PRSI YET their pensions are worth more than a state pension.

!

Oh my God. You really should delete that post. It makes it look like you know nothing about the PS. But then ........

doc_17

And PS sectors workers, actually no workers anywhere, should not have their pensions tied to the whims of men like Sean Fitzpatrick. Who almost singlehandedly could turn their contributions into a crock of sh*t overnight.

Eliot Rosewater

leabharin wrote: »

I am paying 6.5% of my salary into the pension.

My father is a public servant; he works as a Primary School Teacher. At the moment he pays 12.5% of his gross into his pension. This is a result of the pension levy, which means he wasn't paying this much before.

He will retire this year after 40 years of service, which will yield him a pension that pays 50% of his current gross salary. He will also get a lump sum to the value of 1.5 times his current salary.

Given that he's turning 60, and that the average life expectancy is 79, he will get the pension for 19 years. Add in the lump sum, and we will call it a round 20. Roughly a half of his working life.

At this stage calculating what he gets versus what he has paid is very complicated. Ideally we would have to account for inflation, and the fact that he didn't contribute much to his pension before this years budget. Most importantly, his pension is based off of his final years of pay. He is paid, annually, about 2.5 times the amount he would be paid starting off in 2010. In other words, the he contributes far more to his pension now than he would have at the start of his career.


But we will ignore these analytical caveats. He gets 50% for 20 years for his pension. He contributes 12.5% for 40 years, which is the equivalent of 25% for 20 years. So theres a gap of 25% between what he pays in and what he gets out. Thats 25% the taxpayer must provide.


Anyone, feel free to critique that analysis if it's incorrect.

murphaph

In my opinion wrote: »

1. 6.5% paid by me into my pension from day one no choice.
2. Full PRSI stamp paid by me from day one no choice.
3. Private sector employee at 22 not paying into a pension cause he has a choice.
4. My job is pensionable and permanent that's part of reason I choose to do it.
5. I work for my salary.

The bit in bold is not always true. At least in the case of IBM (whom I worked for for a while) it was compulsory to pay into the company defined contribution scheme, to which the company would match your contribution up to 5% of gross pay. Bog standard defined contribution scheme as seen in many multinationals. Sinec the law was changed it is also now impossible to "cash out" of such pension schemes before (I think) 55.

I believe all new recruits into the PS should enter a similar compulsory defined contribution scheme, with no silly lumps sum on retirement. The defined benefit pension needs to go or we'll have an absolutely massive pension time bomb on our hands in a few decades.

If possible I would switch all current employees into a defined contribution scheme but that may not be financially possible (I doubt the NPRF has enough money to cover all the pension payments made by existing public servants). This is something that will have to happen sooner or later.

I would also push the retirement age up to 70 (we are living longer, so we have to work longer) and eliminate compulsory retirement, so if a person wants to keep working and is fit and able to do so, then they should be allowed, though they would not be entitled to draw the state pension if they did opt to keep working.

Public servants should be allowed to claim the full state pension as well as their defined contribution one, same as the private sector. In short, I see no reason why the public sector should be treated any different than the private sector (which faced up to its pensions issues years ago) when it comes to pensions.

Laminations

Eliot Rosewater wrote: »

My father is a public servant; he works as a Primary School Teacher. At the moment he pays 12.5% of his gross into his pension. This is a result of the pension levy, which means he wasn't paying this much before.

He will retire this year after 40 years of service, which will yield him a pension that pays 50% of his current gross salary. He will also get a lump sum to the value of 1.5 times his current salary.

Given that he's turning 60, and that the average life expectancy is 79, he will get the pension for 19 years. Add in the lump sum, and we will call it a round 20. Roughly a half of his working life.

At this stage calculating what he gets versus what he has paid is very complicated. Ideally we would have to account for inflation, and the fact that he didn't contribute much to his pension before this years budget. Most importantly, his pension is based off of his final years of pay. He is paid, annually, about 2.5 times the amount he would be paid starting off in 2010. In other words, the he contributes far more to his pension now than he would have at the start of his career.


But we will ignore these analytical caveats. He gets 50% for 20 years for his pension. He contributes 12.5% for 40 years, which is the equivalent of 25% for 20 years. So theres a gap of 25% between what he pays in and what he gets out. Thats 25% the taxpayer must provide.


Anyone, feel free to critique that analysis if it's incorrect.

Hmmmm. If your dad is paying 25%, wouldn't it make sense that the government (taxpayer) as his employer matches this contribution? That would make up the other 25% no?

Kingdom

mickeyk wrote: »

That does not even come close to covering the cost of your lump sum and pension. You would need to be 30-40% of your gross salary to do this.

However it was a condition when you joined and should not be changed. The pension levy was a crude and underhanded paycut, and the government should have called it just that.

Didn't they change the pension entitlements for new entrants in budget 10? It will no longer be 50% of final salary but 50% of the average salary over the employees career, so they have adjusted it. Personally I believe new recruits should be made take out a private pension like the rest of us, working for the state should not mean special treatment. Otherwise privatize everything that we can. It would be grossly unfair to change the pension entitlements of those currently within the service however, I imagine it may be illegal too.

Fair play to you. Finally someone on this forum has written a sensible post with both sides of the divide taken into account.

This is a post I'd say 90% of Civil Servants would agree with.

Kingdom

Another point; the pension levy is calculated on total income, just like the income levy, but total income doesn't contribute to your pension, such as o/t or certain allowances.

problemchimp

douglashyde wrote: »

Public Sector workers DONT pay PRSI YET their pensions are worth more than a state pension.

It's not their fault they are paid so much. But they certainly dont have a right to harper on about getting stuffed with the bill. THEY ARE THE BILL!

A little bit of research me thinks.

Eliot Rosewater

Laminations wrote: »

Hmmmm. If your dad is paying 25%, wouldn't it make sense that the government (taxpayer) as his employer matches this contribution? That would make up the other 25% no?

A fair point. However if we factor in the fact that the 50% pension rate is calculated from the final salary, whereas the 12.5% contribution is calculated from the 40-year average, its clear there is a larger discrepancy.

problemchimp wrote: »

A little bit of research me thinks.

That is the sixth post on this thread dedicated entirely to saying that one post is wrong. I think douglashyde gets it at this stage!

In my opinion

w123 wrote: »

Full PRSI stamp paid by me from day one no choice.
This is at odds with what a few other posters have said about how PRSI workd in the PS, you say that you're there almost 40 years, that would mean that you started pre 1982 - My mistake there

I did not say I am there almost 40 years, I said Full PRSI paid by me from day one that will be 40 years - meaning when I am finished my career. I have paid A class stamp all my career.

Sorry for confusion.

pah

Kingdom wrote: »

Another point; the pension levy is calculated on total income, just like the income levy, but total income doesn't contribute to your pension, such as o/t or certain allowances.

Paying 6.5% always to pension now another 7.5%(Levy) and roughly 6.5% of salary on PRSI.

OT and allowances are used to calculate the amount paid in the levy but these are not pensionable.

I have heard of some workers who are not entitles to a pension but still pay a pension levy!!!

Mad_Max

So would it be fair to summise then that the public sector workers would want their pension contributions back into salary and take out a private pension if they want?

RGS

I believe all new recruits into the PS should enter a similar compulsory defined contribution scheme, with no silly lumps sum on retirement. The defined benefit pension needs to go or we'll have an absolutely massive pension time bomb on our hands in a few decades.

This will happen for new recruits from 2011.

The_Honeybadger

RGS wrote: »

I believe all new recruits into the PS should enter a similar compulsory defined contribution scheme, with no silly lumps sum on retirement. The defined benefit pension needs to go or we'll have an absolutely massive pension time bomb on our hands in a few decades.

This will happen for new recruits from 2011.

It is common for retirees even in defined contribution schemes to take a lump sum on retirement, but not 1.5 times final salary. This is far too generous and I can see this being reduced out of necessity in the future and if not it should certainly be taxed. The PS pensions problem is bubbling under the surface at the moment, the banks are a bigger issue in the news. However this will change once we eventually nurse our banks back to health and people realise that the banking crisis is a hiccup compared to our pensions crisis with an ageing population, the money simply won't be there to pay them. The major problem is that private pensions are a total sham, I would be interested to see what other countries are doing in this regard, I know Australia has a good superannuation system perhaps we could look at something like that?