Pension shock 17/9/11

femur61

I haven't seen a thread on this yet. I watched Georges Lee last night and not only was I amazed how little I'm going to get upon retirement but how well off the gold plated PS pensions are. How in the rational mind do they think they will get what they are promised. We are a small nation with a decresing workforce so how are they going to be funded with less tax payers. Merkel will not be happy finding us money to pay out this extortionate lump sums and pensions.

Something really needs to be done. So many of my friends have gone to Austrailia with their kids (potential tax payers). If we are squeezed any more my kids will just have to leave against their will. BTW I do begrudge paying taxes to pay for over inflated wages.

RichardAnd

femur61 wrote: »

I haven't seen a thread on this yet. I watched Georges Lee last night and not only was I amazed how little I'm going to get upon retirement but how well off the gold plated PS pensions are. How in the rational mind do they think they will get what they are promised.

They won't get what they're promised and alot of the public servants I know are poignantly aware of that. The pensions system is falling apart across all over the world, it's not just Ireland. There are too many humans and we live too long.

sarumite

deleted

irishh_bob

all pensioners including those on the basic state pension are spoiled beyond belief at the moment despite what various interest groups would have us believe , anyone in thier thirties now , wont see anywhere near the same priveledges upon retirement

n97 mini

The National Pension Reserve Fund was created to pay Public Sector pensions in the future as the maths have shown for a long time that there will be a shortfall.

Regardless of how much money is in the NPRF, Public Sector workers will get their full pensions today, tomorrow and next year, as was agreed.

Even if we have to borrow more to pay them.

The Govt has already taken a baby step in the right direction by basing pensions for new entrants on average salary rather than final salary, though it will take 40 years before the results starts to be seen.

The only long term solution is to privatise Public Sector pensions, i.e. let staff choose and pay for their own pensions.

Gumbo

n97 mini wrote: »

The only long term solution is to privatise Public Sector pensions, i.e. let staff choose and pay for their own pensions.

thats a fair enough comment. would you be ok with PS staff then getting back all their contributions and pensions levy payments?

sarumite

kceire wrote: »

thats a fair enough comment. would you be ok with PS staff then getting back all their contributions and pensions levy payments?

Contributions; yes. Certianly. Though the pensions levy is a pay cut as we keep hearing, therefore it is not a pension contribution.

Gumbo

sarumite wrote: »

Contributions; yes. Certianly. Though the pensions levy is a pay cut as we keep hearing, therefore it is not a pension contribution.

i agree, it was a pay cut by another name.

sarumite

kceire wrote: »

i agree, it was a pay cut by another name.

Slightly better terms than an outright paycut under your current pensions arrangements whereby gross pay (which was unaffected) determines the size of your pension.

n97 mini

kceire wrote: »

would you be ok with PS staff then getting back all their contributions and pensions levy payments?

In exchange for sourcing their own pensions, then yes of course.

Do you think this idea would find favour with many Public Sector workers?

CiaranC

Why would anyone in their right mind put money into a pension with a view to it funding their retirement in 30/40 years from now. Who could possibly trust the financial sector with their money after whats gone on in the last ten years?

Bishop_Donal

CiaranC wrote: »

Why would anyone in their right mind put money into a pension with a view to it funding their retirement in 30/40 years from now. Who could possibly trust the financial sector with their money after whats gone on in the last ten years?

Oh ya. That makes a lot of sense alright. You show them. Put nothing away, and when you've don't have a 'pot to whatever in' in 30 years time, the financial services industry will really have to do a lot of soul searching.

woodoo

All workers should have money taken out of their wages at source to pay for pensions. About 15% of their income. Over and above PRSI

irishh_bob

Bishop_Donal wrote: »

Oh ya. That makes a lot of sense alright. You show them. Put nothing away, and when you've don't have a 'pot to whatever in' in 30 years time, the financial services industry will really have to do a lot of soul searching.

poster didnt suggest putting nothing away , pension plans are not the only form of nest egg provision , anyone who put money in a savings account since 2001 is better off than those who invested in the marketplace , thats how bad it was

Gumbo

Bishop_Donal wrote: »

Put nothing away, and when you've don't have a 'pot to whatever in' in 30 years time,

Dont forget they will still get the state OAP which is currently 230e plus then any money they haved saved themselves.

irishh_bob wrote: »

poster didnt suggest putting nothing away , pension plans are not the only form of nest egg provision , anyone who put money in a savings account since 2001 is better off than those who invested in the marketplace , thats how bad it was

+1
i worked out my pension contributions against allowing me to simply lodge the money into a decent savings account with 4% returns such as Ulster Bank, and i am no worse off after 40 years, and even allowing for the lump sum etc

The_Thing

Gold or silver plating is a layer of metal only a few microns thick applied to a worthless base metal.

One micron is one millionth of a meter.

Bishop_Donal

irishh_bob wrote: »

poster didnt suggest putting nothing away , pension plans are not the only form of nest egg provision , anyone who put money in a savings account since 2001 is better off than those who invested in the marketplace , thats how bad it was

Think savings accounts are generally provided by the financial services sector as well? They were the last time I checked anyway.

My point is you need to make personal provision for the future & lack of trust in FS sector is not a justification for not doing so.

Vizzy

The_Thing wrote: »

Gold or silver plating is a layer of metal only a few microns thick applied to a worthless base metal.

One micron is one millionth of a meter.

Whaaaa ????

Bishop_Donal

kceire wrote: »

Dont forget they will still get the state OAP which is currently 230e plus then any money they haved saved themselves.



+1
i worked out my pension contributions against allowing me to simply lodge the money into a decent savings account with 4% returns such as Ulster Bank, and i am no worse off after 40 years, and even allowing for the lump sum etc

Thought one of the key observations of the programme last night was that the government were unlikely to be able to provide general pension coverage for the masses along with the PS?

I happen to agree with the analysis (and I am not a George Dramatic Lee fan in general terms, but his argument seemed fairly compelling).

Maybe if we've had Zimbabwe type inflation for a few years they will be able to pay Eur230 a week and you could buy an apple with it.:)

sarumite

kceire wrote: »

+1
i worked out my pension contributions against allowing me to simply lodge the money into a decent savings account with 4% returns such as Ulster Bank, and i am no worse off after 40 years, and even allowing for the lump sum etc

How did you know when you would stop recieving the pension? I mean most people who go onto pension age typically live beyond the average life expectancy (obvioulsy, since it is skewed by deaths from younger people).

Vizzy

sarumite wrote: »

How did you know when you would stop recieving the pension? I mean most people who go onto pension age typically live beyond the average life expectancy (obvioulsy, since it is skewed by deaths from younger people).

Its skewed by the deaths of older people as well

sarumite

Vizzy wrote: »

Its skewed by the deaths of older people as well

though the average age a person lives beyond retirement should include older people, not younger people.

NIMAN

n97 mini wrote: »

The National Pension Reserve Fund was created to pay Public Sector pensions in the future as the maths have shown for a long time that there will be a shortfall.

I thought it was there to be used to pay off debts to badly run banks and the IMF.

irishh_bob

Bishop_Donal wrote: »

Think savings accounts are generally provided by the financial services sector as well? They were the last time I checked anyway.

My point is you need to make personal provision for the future & lack of trust in FS sector is not a justification for not doing so.

cash funds are available but the punitive fund fees mean you end up with less than if it had been sitting the bank - post office

hmmm

irishh_bob wrote: »

anyone who put money in a savings account since 2001 is better off than those who invested in the marketplace , thats how bad it was

I doubt that actually, if you were receiving tax relief at the higher rate you would still be ahead. People look at "the amount I've put into a pension", forgetting that if they had instead taken that as income the government would have taken 50% immediately.

Gumbo

sarumite wrote: »

How did you know when you would stop recieving the pension? I mean most people who go onto pension age typically live beyond the average life expectancy (obvioulsy, since it is skewed by deaths from younger people).

Average life expectancy of a Public Servant in retirement is 13 years, but i rounded it to 15

sarumite

kceire wrote: »

Average life expectancy of a Public Servant in retirement is 13 years, but i rounded it to 15

source? I am not doubting you, actually interested in the stats behind it.

RichardAnd

kceire wrote: »

Average life expectancy of a Public Servant in retirement is 13 years, but i rounded it to 15

My late grandfather drew his public service pension for 25 years before passing away last July. When the rules for pensions where thought up, the average male civil servant lived 2 years past retirement if he lived that long at all.

Pensions were set up when few people lived long enough to ever draw them and those that did, rarely lasted long. They were meant to look after someone for the last few years of their life. However, people can easily live 20+ years past retirement so pensions are not doing what they were intended to do.

I think George Lee's documentary wrapped this up nicely when he said that the modern Irish person doesn't fear dying too soon but rather, living too long. In my case, I don't get very excited at the prospect of working for another 50 years (I'm 24), and that's if I'm lucky enough to find work. Wonderful little system the western world has created eh.

Gumbo

sarumite wrote: »

source? I am not doubting you, actually interested in the stats behind it.

sorry, i was a bit out

In 1845, life expectancy for a person aged 65 was 10.9 years for a male and 11.5 years for a
female. The actuarial review of public service pensions assumes life expectancy at age 65 of 16.5
years for a male and 20.3 years for a female. This represents an increase of 56% and 77%,
respectively. It has been suggested that current projections for increases in life expectancy in
Ireland may prove conservative (see Paragraph 7.4.6).

http://www.finance.gov.ie/documents/psp/part6.pdf

RichardAnd wrote: »

My late grandfather drew his public service pension for 25 years before passing away last July.

sorry to hear that, but glad he had a long retirement
Did he retire at 65 or earlier?

ardmacha

The actuarial review of public service pensions assumes life expectancy at age 65 of 16.5 years for a male and 20.3 years for a female.

Why don't women pay a higher pension levy or have a later retirement age?

sarumite

kceire wrote: »

sorry, i was a bit out

Although the age a person lives beyond retirement could be higher than the average life expectancy. The life expectancy statistic includes the death of everybody from the age 0 right up to retirement age, which shouldn't be included in determining the average age a person lives beyond retirement. My guess (and without proper statistical data, I can only guess) is it is closer to 20 years (mid 80's) than the average life expectancy.

solerina

I am a PS worker and I am sick and tired of people going on about our 'gold plated' pensions, the PS workers who joined the scheme after 1995 have been paying quite a lot into the scheme from day 1 and are not on these amazing PS pensions that everyone talks about. I contacted our financial advisors, I was informed that my amazing pension would be worth 11,000 per year before tax.....wow I really am on the gravy train !!!

RichardAnd

kceire wrote: »

sorry to hear that, but glad he had a long retirement
Did he retire at 65 or earlier?

He retired in 1985 at 58, he took some form of early retirement as I recall my mother mentioning but remember, in those days you had to go at 60. I actually have/had quite a few family members retired from the public service for a long time. Perhaps I'm bound for an equally long life but I won't be getting any pension at 60

eric hoone

We've got to suspect that the fifty-something policy makers are looking after their own interests re. pension entitlements. They are sneaking off with tax-free, six-figure lump sums. And half their six figure salaries p.a. Meanwhile the unions allow the government hire new public servants with yellow pack pension packages.

Gumbo

RichardAnd wrote: »

He retired in 1985 at 58, he took some form of early retirement as I recall my mother mentioning but remember, in those days you had to go at 60. I actually have/had quite a few family members retired from the public service for a long time. Perhaps I'm bound for an equally long life but I won't be getting any pension at 60

Me too, with the mortgage, and my pension not kicking in till 65/66, were in the same boat

liammur

Greed is the problem. The likes of this:

A SENIOR civil servant who brokered disgraced Fas boss Rody Molloy's €1.1m golden handshake will retire this week with an exit package worth up to €634,000.
Secretary general at the Department of Jobs, Enterprise and Innovation, Sean Gorman, will leave with the same controversial deal given to former top civil servant Dermot McCarthy, who retired with €713,000 last July.
And the Government could not clarify last night whether it will offer the same terms to his replacement -- although it promised to review the perks "shortly".
Secretaries general get an extra lump sum worth up to half a year's pay plus extra years of service that they have not actually worked to boost their pensions.
This is on top of a pension gratuity worth up to half a year's pay and their annual pension.
Mr Gorman, who is a former FAS board member, has 40 years' service and stands to walk away with an estimated €634,000 when he retires on Friday. This is because he is on a lower grade than Mr McCarthy, who was secretary general to the Department of the Taoiseach.

sarumite

Interesting, but off topic about Irish pensions. I was watching the Daily show and Jon Stewart was intereviewing a woman who wrote a book about pensions in the US. She was saying that many times you hear Corporations complain that their pension scheme is unsustainable. Though according to her, much of the problem is that these corporations are using their pensions funds to boost their own profits, rather than the pensions fund itself. Furthermore she reckons that in an large corporation, the executive pensions could account for >15% of the total pensions requirement. Both facts are rarely, to never mentioned by the corporations themselves when complaining about pension schemes.

irishh_bob

hmmm wrote: »

I doubt that actually, if you were receiving tax relief at the higher rate you would still be ahead. People look at "the amount I've put into a pension", forgetting that if they had instead taken that as income the government would have taken 50% immediately.

cash funds or bonds rarely pay more than 2 % , a savings account can pay near double that so the tax relief on the fund investment is cancelled out

fliball123

solerina wrote: »

I am a PS worker and I am sick and tired of people going on about our 'gold plated' pensions, the PS workers who joined the scheme after 1995 have been paying quite a lot into the scheme from day 1 and are not on these amazing PS pensions that everyone talks about. I contacted our financial advisors, I was informed that my amazing pension would be worth 11,000 per year before tax.....wow I really am on the gravy train !!!

Well until you are paying all not just a lot but the full amount and stop getting subsidised by tax payers you will continue to here about the gold plated pensions..As most in the private sector can not afford their own and have to pay more tax to pay for the PS pensions..this simple should not be the case

femur61

solerina wrote: »

I am a PS worker and I am sick and tired of people going on about our 'gold plated' pensions, the PS workers who joined the scheme after 1995 have been paying quite a lot into the scheme from day 1 and are not on these amazing PS pensions that everyone talks about. I contacted our financial advisors, I was informed that my amazing pension would be worth 11,000 per year before tax.....wow I really am on the gravy train !!!

I'm a private sector worker. Paid €1,000/month for 10 years cut it to €500/month two years ago and now it is down €0/month. I am self employed . Still working no pension now but my taxes are still paying for your gaurenteed pension. Yes, I am bloody mad.

Paulzx

femur61 wrote: »

I'm a private sector worker. Paid €1,000/month for 10 years cut it to €500/month two years ago and now it is down €0/month. I am self employed . Still working no pension now but my taxes are still paying for your gaurenteed pension. Yes, I am bloody mad.

At least you have the option to reduce your contributions in line with what you can afford.

The "guaranteed pensions" will be no more for PS workers who arent due to retire in the next 20 years.

I'm a PS and i'm pretty sure that my pension conditions will be fecked by the time i retire many years down the road. Nothing is safe anymore even the "gold plated":rolleyes: pension

n97 mini

Paulzx wrote: »

I'm a PS and i'm pretty sure that my pension conditions will be fecked by the time i retire many years down the road.

Why would they be? They're in your contract of employment.

Only new entrants can have new terms.

Paulzx

n97 mini wrote: »

Why would they be? They're in your contract of employment.

Only new entrants can have new terms.

You are niave in the extreme if you actually believe that.

Legislation was passed in the Dail at night in order for the Pension Levy to be implemented. There is nothing to stop more changes down the road.

It hasn't been done yet as government decided they had got enough without any serious industrial action and didn't want to push anymore. New entrants were easy targets.

I have every reason to believe that at some stage in the future the existing pension "contracts" will be torn up when the time is suitable.

The only people who have their "contracts" honoured are senior bank managers who led their banks to ruin. You can probably lump senior civil servnats in there as well

n97 mini

Paulzx wrote: »

I have every reason to believe that at some stage in the future the existing pension "contracts" will be torn up when the time is suitable.

Considering virtually every Public Sector worker is unionised I think that's highly unlikely.

If it was going to be easy it would have been done by now.

Vizzy

Do you think that the PS workers were less unionised when the pension levy was introduced ?

Paulzx

n97 mini wrote: »

Considering virtually every Public Sector worker is unionised I think that's highly unlikely.

If it was going to be easy it would have been done by now.

Who said it was going to be easy?

The government got away with imposing a paycut and a pension levy without any serious industrial action. The staff accepted these but it was not so certain they would accept the next attack.

The government new that there was a line in the sand that if crossed could cause more problems than it was worth.

Down the road this line will be crossed at a more opportune time and my own personal opinion is that pension conditions of exisiting employees will be targeted.

I don't say this with any glee as my own pension will be affected.

Things have happened over the last 3 years in this country that nobody thought they would ever see and there's a few more surprises to come yet

n97 mini

Vizzy wrote: »

Do you think that the PS workers were less unionised when the pension levy was introduced ?

No, but I don't think the majority of PS staff felt is was unjust. Not nice maybe, but not unjust. Aside from go-slows or works-to-rule there was no major backlash from it. The proof is in the pudding so to speak.

paulzx wrote:

Who said it was going to be easy?

Not only is it not easy, it's next to impossible. The govt can cut every other area and raise taxes, and in my opinion that is what they will do instead.

Red Actor

The woman who was told that 190k would give her a pession of 93 euro per week, say 5k per year, shocked me. Even allowing the pension to start at age 60 it would mean that she would have to live to 98 to draw the value of the fund. Assuming that there is a return on the 190k the money would last even longer.

My understanding of the actuaral value of pensions (€2m pot to buy that pension) is that the pot would generate the income to pay the pension. If that assumption is correct it leads me to the question as to what happens to the €2m pot when the pensioner passes on?

donalg1

What i dont understand is why someone who is earning 200k a year for 5years say retires and gets a pension of 100k a year, whereas someone earning 25k a year for the same period retires and gets 12.5k per year. Surely the lower paid needs a higher pension as they wont have been able to save nearly as much??

Why does someone who earns 200k a year need a pension above the state pension, well why does any1 for that matter.

Gumbo

femur61 wrote: »

I'm a private sector worker. Paid €1,000/month for 10 years cut it to €500/month two years ago and now it is down €0/month. I am self employed . Still working no pension now but my taxes are still paying for your gaurenteed pension. Yes, I am bloody mad.

you will still get your state pension of 200 odd (non contrib/self employed) plus the value of your 132k pension pot.
you must of been earning well to pay 1k into a pension over the years, fair play.

sarumite

Paulzx wrote: »

Who said it was going to be easy?

The government got away with imposing a paycut and a pension levy without any serious industrial action. The staff accepted these but it was not so certain they would accept the next attack.

Always makes me laugh when people start using terms like "got away with" and "next attack", yet when there is talk about benchmarking and de-facto automatic increments.....its tumbleweed time!