The Anti Double Standard Tax Proposal. . .

Drumpot

Our government are desperate to make any savings they can and are attacking "the low hanging fruit" to get in monies as quickly as possible. Much to little backlash they have attacked the Private Pensions of people who have put money away for their retirement.

Sure its only 0.6% on their fund every year! How much could it possibly cost a person ? Well the government didnt bother discussing it with the Pensions industry, so they prob dont really know or care much. http://www.independent.ie/national-news/pension-chiefs-demand-to-meet-noonan-2641874.html

Well, we shouldnt care that the government didnt "ask" the Pensions industry what they think because in times of financial crisis like this a government needs to act fast to cut costs and increase their income! Ok, so they tip toe around the Public service unions, but thats just the norm. We shouldnt start begrudging one section of society that can force the government to protect its own vested interest at everybody elses expense.!

The government also now thinks that nobody should need more then €60,000 per annum to sustain a decent living standard. Dont think many people will argue with that and most people who have private/public Pensions couldnt fund this amount anyways so it will only really affect a small proportion of those with pensions. Great, so they are finally starting to focus on the elite ?!

Well, not exactly . .

http://www.examiner.ie/ireland/noonan-set-to-get-2000-a-week-pension-154458.html

Its a case of do as I say, not as I do (as usual) with the government and the department of Finance that has surprisingly advised that the those with private sectors be targeted while those in the Public service yet again get insulated from any pain that might be dished out.

So is this just another Public service bashing thread ? Not really as a majority of those within the Public service (at least I think) would surely not get over €60,000.

This thread, if anything, is trying to highlight how vested interest groups within the Government and certain Public service bodies, will hide behind lower paid public servants to keep their own goodies safe. Safety by numbers, so to speak. I believe we have an ill qualified, self promoting defunct department of finance giving concurrent governments poorly constructed advice on how to slash, save and tax, while protecting its own interests in the process.

I dont really care how much it saves the exchequer (f**king hate it when people say "well this would only really save or take in x Million which in the scheme of things is very small"). Any penny saved in any department within our Public service should be welcomed.

So I propose a tax of 99.5% on any existing and future public service Pension over €60,000. I propose that we call it the "anti Double standards tax" so that it bares a true reflection of pain being shared throughout society. Wonder if T.D's would vote for it ?

Irish Slaves for Europe

They should just tax every employed person 50% for the next 3 years. Boom! Our debts are now cleared. No fannying about with all these stealth taxes, just have one big bang and lets get it over with.

fliball123

Irish Slaves for Europe wrote: »

They should just tax every employed person 50% for the next 3 years. Boom! Our debts are now cleared. No fannying about with all these stealth taxes, just have one big bang and lets get it over with.

Will you feck off we are already paying more tax and putting it up by to 50% will force people to leave the country and to leave their jobs ...therefore we will actully receive less tax...They Should at the very least put a 99.5% tax on public sector pensions on those not at the retirement age.. I aggree with the OP

Irish Slaves for Europe

fliball123 wrote: »

Will you feck off we are already paying more tax and putting it up by to 50% will force people to leave the country and to leave their jobs ...therefore we will actully receive less tax...They Should at the very least put a 99.5% tax on public sector pensions on those not at the retirement age.. I aggree with the OP

They won't leave for the sake of 3 years. Its a choice between a big bang approach and a prolonged depression, I know which one I'd choose.

Drumpot

fliball123 wrote: »

Will you feck off we are already paying more tax and putting it up by to 50% will force people to leave the country and to leave their jobs ...therefore we will actully receive less tax...They Should at the very least put a 99.5% tax on public sector pensions on those not at the retirement age.. I aggree with the OP

I presumed that the poster was joking (about 50% tax on everybody).

Whatever about the fairness of everybody having to pay to prop up Public service pay, its a ridiculous, self defeating suggestion.

How many jobs and companies will be lost in all sectors of society? How many mortgages/loans will not be paid leaving the state to foot the bill ? I could go on, but if somebody thinks that taxing everybody to maintain standards for a minority of the population is a fair/prudent step on road to economic recovery then there is little hope for them!

fliball123

Irish Slaves for Europe wrote: »

They won't leave for the sake of 3 years. Its a choice between a big bang approach and a prolonged depression, I know which one I'd choose.

How do you mean for the sake of 3 years??

Drumpot

Irish Slaves for Europe wrote: »

They won't leave for the sake of 3 years. Its a choice between a big bang approach and a prolonged depression, I know which one I'd choose.

The best approach for the economy and most people in the country would be to actually balance the books immediatly through austerity cuts on Social Welfare, State Pensions and Public services.

I am not necessarily supporting this completely, but it would be the quickest and would have less effect on the wider economy.

fliball123

Drumpot wrote: »

I presumed that the poster was joking (about 50% tax on everybody).

Whatever about the fairness of everybody having to pay to prop up Public service pay, its a ridiculous, self defeating suggestion.

How many jobs and companies will be lost in all sectors of society? How many mortgages/loans will not be paid leaving the state to foot the bill ? I could go on, but if somebody thinks that taxing everybody to maintain standards for a minority of the population is a fair/prudent step on road to economic recovery then there is little hope for them!

I think the poster was saying that it is a double standard (correct me if I am wrong) that the gov is dipping into private pensions and then expect the same people to suppliment public sector pensions...So he suggested a cut off rate of 60k and all above that taxed...and I took that one step further by saying any ps under the retirement age drawing a pension should be taxed 99.5% of it..Why should they have their cake and eat it..Let them live in the real world and work till the retirement age

Drumpot

fliball123 wrote: »

I think the poster was saying that it is a double standard (correct me if I am wrong) that the gov is dipping into private pensions and then expect the same people to suppliment public sector pensions...So he suggested a cut off rate of 60k and all above that taxed...and I took that one step further by saying any ps under the retirement age drawing a pension should be taxed 99.5% of it..Why should they have their cake and eat it..Let them live in the real world and work till the retirement age

I was that Double standard poster !!

I was replying to your post on the person who suggested taxing everybody 50%!

Irish Slaves for Europe

fliball123 wrote: »

How do you mean for the sake of 3 years??

In my post I said everyone would be taxed 50% for 3 years, therefore after taxs would return to what they are now or less. People aren't going to up sticks and leave Ireland for the sake of there being high taxes here for 3 years, especially given how the world economy is and how difficult it is to get jobs overseas.

fliball123

Drumpot wrote: »

I was that Double standard poster !!

I was replying to your post on the person who suggested taxing everybody 50%!

ahh k so we are in aggreement sorry for the confusion

fliball123

Irish Slaves for Europe wrote: »

In my post I said everyone would be taxed 50% for 3 years, therefore after taxs would return to what they are now or less. People aren't going to up sticks and leave Ireland for the sake of there being high taxes here for 3 years, especially given how the world economy is and how difficult it is to get jobs overseas.

Really ... I would say if they done that it will be counter productive...If this is implemented without cuts in both social welfare and PS pay and pensions...People already on the margin between the low paid and welfare will stop working and those who have a high mortgage and now paying 50% of what they earn will do a runner...You dont seem to see the reality that is the despair of the Irish tax payer at present...but mark my words it has already been proven we are at the point of diminishing returns for our tax take..The next move the gov makes is vital to this country if they make a balls of the next budget we will be worse than Greece IMO

20Cent

Drumpot wrote: »

The best approach for the economy and most people in the country would be to actually balance the books immediatly through austerity cuts on Social Welfare, State Pensions and Public services.

I am not necessarily supporting this completely, but it would be the quickest and would have less effect on the wider economy.

For the economy!
What about the population or are we just here to service the debt?

We've been cutting since 2008 and things are getting worse.

fliball123

20Cent wrote: »

For the economy!
What about the population or are we just here to service the debt?

We've been cutting since 2008 and things are getting worse.

We have also been taxing more and more and the level of tax take is not increasing....There are 2 sides to every coin..Everything has to be on the table in this years budget...Not just taxes but ps pay, numbers, pensions and social welfare...

sollar

If the words 'Public Service' appear in an opening post it will almost certainly turn into the usual PS toing and froing.

sollar

Drumpot wrote: »

The best approach for the economy and most people in the country would be to actually balance the books immediatly through austerity cuts on Social Welfare, State Pensions and Public services.

Let somebody else take the pain eh? Isn't that the problem everybody wants everybody else to take the pain.

fliball123

sollar wrote: »

Let somebody else take the pain eh? Isn't that the problem everybody wants everybody else to take the pain.

Whats wrong with what he proposed..Obvious we will be getting taxed more aswell so why not cut aswell?

Drumpot

sollar wrote: »

Let somebody else take the pain eh? Isn't that the problem everybody wants everybody else to take the pain.

Who said anything about others taking pain ?

The government stated that they believe people shouldnt need more then 60k pension to survive after retirement. Why should this be only relevant for those outside of the public service ?

Drumpot

20Cent wrote: »

For the economy!
What about the population or are we just here to service the debt?

We've been cutting since 2008 and things are getting worse.

You speak of the economy as if looking after our economy (or not looking after it) has no positive/negative effect on peoples lives.

Its airy fairy economics (like Sinn Fein) to discuss the idea of looking after the Irish people by ignoring the market rules (and the debts we owe) as if there will be no negative downsides.

Things could be worse (dont know anybody starving yet!). Peoples lifestyle expectation are a problem and are hindering the countries ability to objectively push austerity that we will require in one way or the other.

This post was supposed to highlight the fact that upper levels of public service and government are happy to push through pain to everybody else (including those in lower areas of public service) while hiding behind the nurses/guarda to protect themselves from pain that they would actually feel.

The_Honeybadger

IMO future PS pensions should be capped at the average industrial wage, if any employees want more than that then let them pay into a private fund to make up the difference, I realise this would be rather unfair on those intending to retire in the next 5-10 years as it doesn't give them time to build up a private fund so something would have to be worked out to phase it in. I also realise the numbers getting the super duper pensions we read about in the media is small, but that doesn't mean it is not worth doing. 60k is too high IMO, my family of 4 lives comfortably on less than that so somebody in retirement with their mortgage paid off and no kids to support would be quite well off on 60k.

sollar

Drumpot wrote: »

Who said anything about others taking pain ?

The government stated that they believe people shouldnt need more then 60k pension to survive after retirement. Why should this be only relevant for those outside of the public service ?

I was responding you your statement about balancing the books by slashing Social Welfare, PS Pay and PS Pensions. I never mentioned 60K

Drumpot

sollar wrote: »

I was responding you your statement about balancing the books by slashing Social Welfare, PS Pay and PS Pensions. I never mentioned 60K

Actually I only made that statement as a point, I wasnt proposing it.

I was replying to the person who said we should tax everbody 50% which would have far more damaging, long term damage to everybody and our economy then cutting and slashing the governments expenses. That was all . .

lasnoufle

Irish Slaves for Europe wrote: »

They won't leave for the sake of 3 years. Its a choice between a big bang approach and a prolonged depression, I know which one I'd choose.

I'd leave overnight (well OK give my notice overnight) is this was happening with no matching cut in the state expenses.

Godge

Drumpot wrote: »

Our government are desperate to make any savings they can and are attacking "the low hanging fruit" to get in monies as quickly as possible. Much to little backlash they have attacked the Private Pensions of people who have put money away for their retirement.

Sure its only 0.6% on their fund every year! How much could it possibly cost a person ? Well the government didnt bother discussing it with the Pensions industry, so they prob dont really know or care much. http://www.independent.ie/national-news/pension-chiefs-demand-to-meet-noonan-2641874.html

Well, we shouldnt care that the government didnt "ask" the Pensions industry what they think because in times of financial crisis like this a government needs to act fast to cut costs and increase their income! Ok, so they tip toe around the Public service unions, but thats just the norm. We shouldnt start begrudging one section of society that can force the government to protect its own vested interest at everybody elses expense.!

The government also now thinks that nobody should need more then €60,000 per annum to sustain a decent living standard. Dont think many people will argue with that and most people who have private/public Pensions couldnt fund this amount anyways so it will only really affect a small proportion of those with pensions. Great, so they are finally starting to focus on the elite ?!

Well, not exactly . .

http://www.examiner.ie/ireland/noonan-set-to-get-2000-a-week-pension-154458.html

Its a case of do as I say, not as I do (as usual) with the government and the department of Finance that has surprisingly advised that the those with private sectors be targeted while those in the Public service yet again get insulated from any pain that might be dished out.

So is this just another Public service bashing thread ? Not really as a majority of those within the Public service (at least I think) would surely not get over €60,000.

This thread, if anything, is trying to highlight how vested interest groups within the Government and certain Public service bodies, will hide behind lower paid public servants to keep their own goodies safe. Safety by numbers, so to speak. I believe we have an ill qualified, self promoting defunct department of finance giving concurrent governments poorly constructed advice on how to slash, save and tax, while protecting its own interests in the process.

I dont really care how much it saves the exchequer (f**king hate it when people say "well this would only really save or take in x Million which in the scheme of things is very small"). Any penny saved in any department within our Public service should be welcomed.

So I propose a tax of 99.5% on any existing and future public service Pension over €60,000. I propose that we call it the "anti Double standards tax" so that it bares a true reflection of pain being shared throughout society. Wonder if T.D's would vote for it ?

OP, What is the point of your thread. You reference two articles, one from the examiner and one from the independent, both of which are two months old, one of them about consultation with the pension industry and the other about one minister's pension entitlement. Somehow, you then turn those old articles into a proposal for a tax on public sector pensions over €60,000.

By the way, why not a similar tax on any private sector pension that pays out more? There are plenty of them out there still. While you won't get tax relief once your private sector pension pot goes above a certain level, the only reason it is not worth continuing the investment at that stage is because of the high charges imposed by the pension industry.


By the way, as far as I know, the government did not consult the trade unions before it adopted the following measures:

(1) Pension levy
(2) 1 January 2010 pay cut
(3) 1 January 2011 pay cut for new entrants
(4) 1 January cut for existing pensioners

I think your proposal, which has little logic or common sense (doesn't even have potential to raise money) is just another excuse for a public service ranting thread.

fliball123

Godge wrote: »

OP, What is the point of your thread. You reference two articles, one from the examiner and one from the independent, both of which are two months old, one of them about consultation with the pension industry and the other about one minister's pension entitlement. Somehow, you then turn those old articles into a proposal for a tax on public sector pensions over €60,000.

By the way, why not a similar tax on any private sector pension that pays out more? There are plenty of them out there still. While you won't get tax relief once your private sector pension pot goes above a certain level, the only reason it is not worth continuing the investment at that stage is because of the high charges imposed by the pension industry.


By the way, as far as I know, the government did not consult the trade unions before it adopted the following measures:

(1) Pension levy
(2) 1 January 2010 pay cut
(3) 1 January 2011 pay cut for new entrants
(4) 1 January cut for existing pensioners

I think your proposal, which has little logic or common sense (doesn't even have potential to raise money) is just another excuse for a public service ranting thread.

Well the reason for not taxing private penion is that it doesnt come from the tax payer..and already the tax relief has been cut by 7% and will be reduced again by a further 13% by the end of this year

Godge

Drumpot wrote: »

The best approach for the economy and most people in the country would be to actually balance the books immediatly through austerity cuts on Social Welfare, State Pensions and Public services.

I am not necessarily supporting this completely, but it would be the quickest and would have less effect on the wider economy.

Not true, measures that would have less effect on the wider economy would include:

(1) tripling the levy on private sector pensions and making it permanent. Instead of pension funds investing abroad, the money would be taken in by the government and would reduce the deficit without affecting the economy at all (I know, whinge, whinge, share the burder, public sector spongers etc, spare me the rant please, but you are looking for measures that would have less effect on the wider economy) It would also mean people would stop paying money into pension funds and spend it instead thereby increasing VAT revenues, a tax with a positive benefit!!! Seriously I know it won't happen because of the political difficulties with taxing the poor private sector again and because of the long-term pension implications but it would have less effect on the wider economy.

(2) A large property-based tax which would capture all those living in Spain, Greece etc with property in Ireland. Better still, make it a levy of some kind so that you can't escape it through the double taxation rules. I know it would also capture those living in Ireland but I would guess that about 10% of the value of our property is owned by those living abroad for tax reasons (think of Bono, J.P. McManus etc.). Again as that 10% would be returning money to Ireland so the tax would have less effect on the wider economy than cuts in public expenditure or increases in taxation.

I know none of the above suits your public-sector bashing agenda but don't let a few things like that stop you.

Godge

fliball123 wrote: »

Well the reason for not taxing private penion is that it doesnt come from the tax payer..and already the tax relief has been cut by 7% and will be reduced again by a further 13% by the end of this year

Yes, but private sector pension money is invested abroad out of our economy. Levy it to get the money back I say. Requiring it to be invested here runs the risk of creating another asset bubble.

Debtocracy

The chances of austerity working are 0.01%. Let’s say that we manage to successfully balance the books with tax increases and cuts to expenditure. This will shrink the economy substantially thereby reducing the potential tax take available. As the tax take goes down the payment of 15bn or so servicing debt interest will become huge. About half of the tax take of our country will go towards paying back money we didn’t even get lent. Apart from the ethics of a country being forced into debt slavery, financially no economy can survive with that proportion of money being drained out every year. Stimulus won’t work either though it may kick the can down the road for a while.

Drumpot

Godge wrote: »

OP, What is the point of your thread. You reference two articles, one from the examiner and one from the independent, both of which are two months old, one of them about consultation with the pension industry and the other about one minister's pension entitlement. Somehow, you then turn those old articles into a proposal for a tax on public sector pensions over €60,000.

By the way, why not a similar tax on any private sector pension that pays out more? There are plenty of them out there still. While you won't get tax relief once your private sector pension pot goes above a certain level, the only reason it is not worth continuing the investment at that stage is because of the high charges imposed by the pension industry.


By the way, as far as I know, the government did not consult the trade unions before it adopted the following measures:

(1) Pension levy
(2) 1 January 2010 pay cut
(3) 1 January 2011 pay cut for new entrants
(4) 1 January cut for existing pensioners

I think your proposal, which has little logic or common sense (doesn't even have potential to raise money) is just another excuse for a public service ranting thread.

I was making the point that our minister for Finance stated that €60,000 a year should be enough for people at retirement (hence links). They have been cutting back reliefs for private Pension investors since 2008 that has generally only affected the upper level earners (which is fine). The point of this thread was to point out that there are two differant rules for everybody.

It is well known (I work in the Industry, search through boards to see my arguments about the actual cost to fund a public service pension, Im not repeating myself) that the cost to the state to fund public service pensions, even after the "levy" is nowhere near enough to cover the cost.

PhatPiggins

Godge wrote: »

Yes, but private sector pension money is invested abroad out of our economy. Levy it to get the money back I say. Requiring it to be invested here runs the risk of creating another asset bubble.

And incentivising private sector workers to not put money into pensions but to simply spend it instead won't? If you force pension funds to invest domestically there's only one thing they're going to put it, government bonds!

Drumpot

Godge wrote: »

Not true, measures that would have less effect on the wider economy would include:

(1) tripling the levy on private sector pensions and making it permanent. Instead of pension funds investing abroad, the money would be taken in by the government and would reduce the deficit without affecting the economy at all (I know, whinge, whinge, share the burder, public sector spongers etc, spare me the rant please, but you are looking for measures that would have less effect on the wider economy) It would also mean people would stop paying money into pension funds and spend it instead thereby increasing VAT revenues, a tax with a positive benefit!!! Seriously I know it won't happen because of the political difficulties with taxing the poor private sector again and because of the long-term pension implications but it would have less effect on the wider economy.

(2) A large property-based tax which would capture all those living in Spain, Greece etc with property in Ireland. Better still, make it a levy of some kind so that you can't escape it through the double taxation rules. I know it would also capture those living in Ireland but I would guess that about 10% of the value of our property is owned by those living abroad for tax reasons (think of Bono, J.P. McManus etc.). Again as that 10% would be returning money to Ireland so the tax would have less effect on the wider economy than cuts in public expenditure or increases in taxation.

I know none of the above suits your public-sector bashing agenda but don't let a few things like that stop you.

1) Pensions are about saving for retirement and people who choose to take up private Pensions do so for this very reason. You are promoting that people basically get incentivised to spend all they have so at retirement they have only the state to rely on! Great short term thinking, lets not worry about these people until they are retiring and we can come up with some other kind of measures to fund looking after them!

2)Not really sure what relevance it has to this discussion. .

I have two questions:

1) Do you not think its double standards for a person, who will get €120,000 every year from the state in a couple of years for his pension, to say that people in a differant sector (that wont effect him) shouldnt need more then €60,000 a year to live ?

2) What exactly is Public Service bashing ? Was the recent levy on private Pensions called Private sector bashing ? Is there Social Welfare bashing ? Is there Pensioner bashing ? Is there child welfare bashing ? Is there vehicle driver bashing ?

What makes the public service so special that whenever its on the receiving end of suggested austerity that its being bashed ? It would be hilarious if some of the Union members didnt convince so many that its actually a winning argument!

Godge

Drumpot wrote: »

I was making the point that our minister for Finance stated that €60,000 a year should be enough for people at retirement (hence links). They have been cutting back reliefs for private Pension investors since 2008 that has generally only affected the upper level earners (which is fine). The point of this thread was to point out that there are two differant rules for everybody.

It is well known (I work in the Industry, search through boards to see my arguments about the actual cost to fund a public service pension, Im not repeating myself) that the cost to the state to fund public service pensions, even after the "levy" is nowhere near enough to cover the cost.

Never said that the cost to the state to fund public service pensions was enough based on the contributions. You will accept that a decent employer matches employee contributions, and a really good employer beats employee contributions (If you don't accept this, I don't believe you work in the pension industry)

Contributions from employees, including the pension levy are now running at nearly 15% and when you take the integration element into account, as well as the new pension scheme (awaiting publication of the legislation), some public servants, starting now, and retiring at lower grades, will be paying close to the full cost of their pension. If an equal contribution from the employer is made, the cost will be covered for most public sector employees.

Godge

Drumpot wrote: »

1) Pensions are about saving for retirement and people who choose to take up private Pensions do so for this very reason. You are promoting that people basically get incentivised to spend all they have so at retirement they have only the state to rely on! Great short term thinking, lets not worry about these people until they are retiring and we can come up with some other kind of measures to fund looking after them!

2)Not really sure what relevance it has to this discussion. .

I have two questions:

1) Do you not think its double standards for a person, who will get €120,000 every year from the state in a couple of years for his pension, to say that people in a differant sector (that wont effect him) shouldnt need more then €60,000 a year to live ?

2) What exactly is Public Service bashing ? Was the recent levy on private Pensions called Private sector bashing ? Is there Social Welfare bashing ? Is there Pensioner bashing ? Is there child welfare bashing ? Is there vehicle driver bashing ?

What makes the public service so special that whenever its on the receiving end of suggested austerity that its being bashed ? It would be hilarious if some of the Union members didnt convince so many that its actually a winning argument!

Yes, I am saying that in the short-term, because of the unprecedented crisis facing this country, that we would be better off disincentivising pensions as well as savings and ensuring that the money is spent. I know that this creates a problem for the pensions industry, but the solution to that is convincing people that they will still get a great return for investing their money. Unfortunately, the pension industry, like many others in Ireland, has got used to a state subsidy and has grown fat on that subsidy, so most are unable to do anything other than cry and whinge.


Maybe I missed something, but your two-month old links (remind me again why we are having a debate about old newspaper stories) did not have anything about the €60,000 comment. Again, while the state may subsidise up to €60,000, nothing to stop people investing above that in pensions if the pensions industry can cut charges and provide the returns.

Yes, there is public sector bashing.

Drumpot

Godge wrote: »

Never said that the cost to the state to fund public service pensions was enough based on the contributions. You will accept that a decent employer matches employee contributions, and a really good employer beats employee contributions (If you don't accept this, I don't believe you work in the pension industry)

Contributions from employees, including the pension levy are now running at nearly 15% and when you take the integration element into account, as well as the new pension scheme (awaiting publication of the legislation), some public servants, starting now, and retiring at lower grades, will be paying close to the full cost of their pension. If an equal contribution from the employer is made, the cost will be covered for most public sector employees.

What world do you live in ? Most of my clients are not afforded employers contributions and when I worked in Group Pensions (company Pension scheme department) as an administrator of Pensions I can assure you that there were many companies that did not match exactly what their employees put in and a tiny proportion paid in more then what their employees paid in (and they were generally directors of companies etc).

I looked after well over 200 differant Pension schemes which is a decent amount to at least base a competent opinion on what you discuss.

Since you refused to actually clarify exactly what a public service basher is, perhaps you could afford me the honour of answering one of these questions:

- What evidence do you have with regards to all these employers contributing huge sums to their employees pensions ? (You do know that employers cannot contribute to Individual PRSA's right ?)

- What evidence do you have to clarify exactly the cost to fund the Pensions of Public servants going forward?

Drumpot

Godge wrote: »

Yes, I am saying that in the short-term, because of the unprecedented crisis facing this country, that we would be better off disincentivising pensions as well as savings and ensuring that the money is spent. I know that this creates a problem for the pensions industry, but the solution to that is convincing people that they will still get a great return for investing their money. Unfortunately, the pension industry, like many others in Ireland, has got used to a state subsidy and has grown fat on that subsidy, so most are unable to do anything other than cry and whinge.


Maybe I missed something, but your two-month old links (remind me again why we are having a debate about old newspaper stories) did not have anything about the €60,000 comment. Again, while the state may subsidise up to €60,000, nothing to stop people investing above that in pensions if the pensions industry can cut charges and provide the returns.

Yes, there is public sector bashing.

If I didnt know any better I would say you are simply trying to spoil debate. No facts, no figures, just very broad assumptions . .

What is public service bashing ? I need to know if I am to stop the bashing . . I dont like bashing . . Makes me think of Seal clubbing for some reason ! What exactly have I been bashing in this thread ?

One one hand you admit that we need to bring in severe measures to reduce our overheads and bring in more cash and that raiding private sector pensions is fair enough in these harsh times. Yet you still attack my suggestions that people over €60,000 with Public service pensions shouldnt be touched and accuse this of being an attack or bashing excercise. Does that mean you private sector bash ?

Even in your flawed and questionable "figures" you admit that it wont be until the newer pensions take effect, will there be a truer reflection on contributions made to benefits received. So, why wait if we are in such a dire situation? Maybe people like yourself throw out the comment "public service bashing" when in fact its your flawed logic that is being bashed and not actually a section of society being persecuted when nobody is being spared pain!

Godge

Drumpot wrote: »

What world do you live in ? Most of my clients are not afforded employers contributions and when I worked in Group Pensions (company Pension scheme department) as an administrator of Pensions I can assure you that there were many companies that did not match exactly what their employees put in and a tiny proportion paid in more then what their employees paid in (and they were generally directors of companies etc).

I looked after well over 200 differant Pension schemes which is a decent amount to at least base a competent opinion on what you discuss.

Since you refused to actually clarify exactly what a public service basher is, perhaps you could afford me the honour of answering one of these questions:

- What evidence do you have with regards to all these employers contributing huge sums to their employees pensions ? (You do know that employers cannot contribute to Individual PRSA's right ?)

- What evidence do you have to clarify exactly the cost to fund the Pensions of Public servants going forward?

http://www.arkfinance.ie/financialservices/pension/prsas/


On what do you base your statement that employers cannot contribute to individual PRSAs in light of the above link? BTW, I do know that my own private sector company contributes to individual PRSAs of some employees so can you explan further? Employers are required to give access to PRSAs to any employee not in a company pension scheme but while they may make contributions, they are not obliged to do so, which is the bit that may be confusing you.

http://oneview.mercer.ie/pages/1388195#Employers_level_of_contribution

Again, Mercer seem to suggest a contribution from employers of 5-10% so your clients must be atypical.

http://www.finfacts.ie/irishfinancenews/article_1022408.shtml

This most recent article from finfacts puts the average employer contribution at 7%, so if many of your clients are getting nil from their employer, the good employers must be paying a hell of a lot more than 7% to their ordinary employees (and a hell of a lot more than 26% to their senior employees). Are you suggesting that the State should be a minimum wage employer only offering the minimum entitlements or do you go along with the generally accepted guideline that the State should be a good fair employer?

Based on your post above, I am guessing that you are a pensions consultant offering individual pension arrangements and that as a result of the government decisions, your business is likely to be severely affected. That does not make you an impartial observer in this debate.

For my own part, I will admit to a preserved pension benefit in the public sector and a current private sector pension arrangement. I have worked in a variety of roles and have had various pension specialists reporting to me so while I may not have all the detail, I am familiar with a lot of the general aspects of pensions and pension schemes (including funding difficulties!!)

beeftotheheels

Drumpot wrote: »

1) Pensions are about saving for retirement and people who choose to take up private Pensions do so for this very reason. You are promoting that people basically get incentivised to spend all they have so at retirement they have only the state to rely on! Great short term thinking, lets not worry about these people until they are retiring and we can come up with some other kind of measures to fund looking after them!

Maybe you didn't get the message. We're in receivership according to Minister Quinn (who I agree with on this). As another poster mentioned
We have to have a feasible possibility of getting to old age before it makes any sense worrying about it

Godge

Drumpot wrote: »

- What evidence do you have to clarify exactly the cost to fund the Pensions of Public servants going forward?

http://www.hea.ie/en/node/1413


Revised Employment Control Framework for the Higher Education Sector sets the value of the employer contribution to state pensions at 20%.


http://www.finance.gov.ie/viewdoc.asp?fn=/documents/Publications/other/2009/pensiondedtablemay09.pdf



Pension levy table sets the pension contribution at 7.1% for those earning €60,000. Superannuation contributions are at 6.5%, giving a total of 13.6%, when added to the notional 20% employer contribution, gives a total funding of 33.6% of employee salary towards a public service pension. I think that rate broadly covers the cost except for mayber teachers, guards and army which can retire earlier.

Drumpot

Godge wrote: »

http://www.hea.ie/en/node/1413


Revised Employment Control Framework for the Higher Education Sector sets the value of the employer contribution to state pensions at 20%.


http://www.finance.gov.ie/viewdoc.asp?fn=/documents/Publications/other/2009/pensiondedtablemay09.pdf



Pension levy table sets the pension contribution at 7.1% for those earning €60,000. Superannuation contributions are at 6.5%, giving a total of 13.6%, when added to the notional 20% employer contribution, gives a total funding of 33.6% of employee salary towards a public service pension. I think that rate broadly covers the cost except for mayber teachers, guards and army which can retire earlier.

Been here before . .

Those stats dont include management charges, allocation of premiums and most importantly Fund performance. I always find it interesting when people defending the PS pension give out about how people in DC schemes take risks. The alternative for them is to leave their money in a deposit style fund that will get little or no growth (especially after charges). The facts and figures that the department of finance would use would include certain investment growth (what it doesnt appear to be clear) but that calculated growth is not guaranteed and has to be subsidised by the taxpayer

That aside, it says somebody on €60,000 is contributing 7.1% which is a net cost of 3.6%. Does that figure presume that the person was always on €60,000 or was the person on a lower salary ? Its all good and well contributing larger amounts to your Pension when your salary goes up, but for everybody else without a DB Pension arrangement, we have to rely on whatever we could put into our Pension before we get to that stage.

That aside, if I was on €60,000 and was contributing €4,500 and was lucky enough that my Employer was contributing the same amount, if my fund was to grow by 6% per year, every year without a loss anytime, I would only have enough to purchase an annuity of €27,641 after 40 years. The modern day value of that would equate to a Pension of €8474 per annum. So for the majority of people whose employer doesnt match what they put in, this might equate to half of those figures! That aside, people dont start on €60,000 and remain at €60,000 for 40 years. In my example even starting and remaining on €60,000 a person doesnt fund enough to warrant a full pension. But sure, why let facts get in the way of a good debate! Edit: and thats just the cost of a level pension, public service pensions are indexed which are more expensive but Im not wasting my time doing more quotes for somebody that doesnt appear to actually want to understand the comparible cost of what Pensions they are debating.

Yes Mercer suggest that the Employer contributes 5%-7% into their members Pension plans. Its a Pension Provider, of course it suggest this. On one hand your accusing me of being impartial because I am a financial adviser and on the other you are happy to use vague paragraphs from a larger brokers website that makes a sweeping statement on a product it sells (without any facts or figures). Does it say that there is a vested period within which an Employer can get a refund of its contributions ? (usually 2 years in many cases).

And I am a financial adviser. What exactly has that to do with me being impartial if I am actually giving out about the Minister for Finance engaging in blatant double standards ? One of his own coalition members (Joan Bruton) even thinks the Pension levy was poorly conceived and thought through. http://www.taxation.ie/2011/06/joan-burtons-pension-levy-warning/ .

Whatever about how impartial I am, the differance between what I say and what you say is that you keep defending the indefensible. I dont defend the charges in the Pensions industry, in fact I would be happy if the government offered their Pension scheme to everybody else in the country, but we both know they couldnt afford to as its not fully funding itself. I dont think €60,000 ceiling on relief is unfair in the Private Sector.

I know that most employers do not contribute 5%-7% to their employees Pension schemes and I also know that there are many companies that dont even have a Pension scheme and allow their employees to contribute to their own plan. I also know of Pension schemes that are under funded and schemes where the Employees values have been hammered by fund performance. What value is there on knowing that you will have a guaranteed Pension at retirement irrespective of your contribution ? Oh and the reason that DB pension schemes are all but gone in the private sector is because they are money pits.

fliball123

Godge wrote: »

Yes, but private sector pension money is invested abroad out of our economy. Levy it to get the money back I say. Requiring it to be invested here runs the risk of creating another asset bubble.

You do realise that private sector pensions are way down and will continue to drop with regards to payments...By all means go mad on the pensions...and sure we will keep paying to keep the 300k odd in the public sector on theirs...How is this fair....A private sector pension bar the tax relief which will be done away with over the next couple of years has no bearing on this..It does not cost the tax payer anything??

Drumpot

fliball123 wrote: »

You do realise that private sector pensions are way down and will continue to drop with regards to payments...By all means go mad on the pensions...and sure we will keep paying to keep the 300k odd in the public sector on theirs...How is this fair....A private sector pension bar the tax relief which will be done away with over the next couple of years has no bearing on this..It does not cost the tax payer anything??

Never ceases to amaze me how people with little or no knowledge on Pensions can engage in debates about the cost/benefits of a DB scheme!

Heres assumptions made in supposedly comparing DC v DB in this case:

1. Charges - Not clear exactly what charges are included in administering the public service pension scheme.
2. Fund performance. Not sure what fund performance is assumed on members contributions and doesnt appear to allow years when fund performances might drop. Even government bonds these days arent safe!
3. Employers contribution. Next to Fund performance, this is the most ridiculous assumption made. Most employers do not match what their employees put in, indeed many companies dont even have Occupational Pension schemes , but do offer facilitys for employees to contribute to whatever they want.
4. Indexed pensions. I know that up until now existing Pension recipients in the public service got benchmarked pensions in comparible with the jobs they used to have, lets even ignore this ridiculous perk. Indexed pensions on their own cost alot more then level pensions (indexed pensions are pensions that increase).
5. The annuity rates that a person has to rely on to purchase a Pension for life go up and down depending on Interest rates at the time they retire, DB scheme members do not need worry about this fact of life for the rest of us scmucks.

These are 5 huge assumptions that have to be made by defenders of the public service DB defenders for their argument to work. Alternatively they can simply ignore these points and just start into the whole "well you are just public service bashing" as a default defencive mechanism to not awknowledge the farcial self vested position they take.

And I still havent been told what exactly Public service bashing is . .

Drumpot

Drumpot wrote: »

4. Indexed pensions. I know that up until now existing Pension recipients in the public service got benchmarked pensions in comparible with the jobs they used to have, lets even ignore this ridiculous perk. Indexed pensions on their own cost alot more then level pensions (indexed pensions are pensions that increase).

This is my main issue with the public sector DB: the pension increases. Adds on a fortune.
Drumpot also makes excellent points that someone may be on a lower salary, paying contributions based on the lower salary for many years, then on a higher salary close to retirement, on which the pension is based.
Finally, 33% contributions (if I accept this figure, I haven't looked into it) on the full salary of 60k for 40 years might just about cover the cost of the annuity and TFLS for someone retiring on a 30k pension, with very modest increases. But nobody in the public sector is going to be earning 60k for 40 years and paying contributions based on that.
(I'm a little confused on the thread whether we're talking about 60k pensions i.e. 120k salaries, or 60k salaries leading to 30k pensions?)
And considering we're just plain broke, I don't think "employer" contributions should be that high in this case.

I don't know about capping the pensions themselves but I will argue yet again that pension increases need to be done away with.

fliball123

Godge wrote: »

Never said that the cost to the state to fund public service pensions was enough based on the contributions. You will accept that a decent employer matches employee contributions, and a really good employer beats employee contributions (If you don't accept this, I don't believe you work in the pension industry)

Contributions from employees, including the pension levy are now running at nearly 15% and when you take the integration element into account, as well as the new pension scheme (awaiting publication of the legislation), some public servants, starting now, and retiring at lower grades, will be paying close to the full cost of their pension. If an equal contribution from the employer is made, the cost will be covered for most public sector employees.

Recruitment freeze so to date feck all have had the this restriction you state above yet..and I am a private sector employee who is provding for his own pension no contribution from employer..Unfortunately I can no longer afford it and have put a stop on it due to wage cut and hours cut...Also its only in the large Multinationals and the likes of the banks that will contribute to your pension. The pension levy is 7% not 15% ...Also you forget your employer is broke and the tax payer cannot match what you put and should not be asked to do so when the majority can not afford their own pension

fliball123

Godge wrote: »

Yes, I am saying that in the short-term, because of the unprecedented crisis facing this country, that we would be better off disincentivising pensions as well as savings and ensuring that the money is spent. I know that this creates a problem for the pensions industry, but the solution to that is convincing people that they will still get a great return for investing their money. Unfortunately, the pension industry, like many others in Ireland, has got used to a state subsidy and has grown fat on that subsidy, so most are unable to do anything other than cry and whinge.


Maybe I missed something, but your two-month old links (remind me again why we are having a debate about old newspaper stories) did not have anything about the €60,000 comment. Again, while the state may subsidise up to €60,000, nothing to stop people investing above that in pensions if the pensions industry can cut charges and provide the returns.

Yes, there is public sector bashing.

This subsidy is being taken away it was 40% it is now at 33% it will be 20% by the end of the year and 0 by 2014 what s your problem with that...I find it hard to believe that with such pensions like gaurds, politicians and other high ranking CS are getting and you want to tackle private sector pensions...So is this private sector bashing?

careca11

Irish Slaves for Europe wrote: »

In my post I said everyone would be taxed 50% for 3 years, therefore after taxs would return to what they are now or less. People aren't going to up sticks and leave Ireland for the sake of there being high taxes here for 3 years, especially given how the world economy is and how difficult it is to get jobs overseas.

eh 50% tax would mean many , many , many more families not been able to meet our monthly mortgage payments , life insurance , car insurance , health insurance ,food, utilities etc etc etc ........................
it would be a disaster for the economy

fliball123

careca11 wrote: »

eh 50% tax would mean many , many , many more families not been able to meet our monthly mortgage payments , life insurance , car insurance , health insurance ,food, utilities etc etc etc ........................
it would be a disaster for the economy

I tried to point this out to the poster..that if this happened a lot of people working would leave and hand their keys to the bank and therefore we would end up getting less tax