Croke Park II preliminary Talks started today

antoobrien

Godge wrote: »

I just cannot see the government putting a third general scheme in place.

I don't think it could be a third scheme, it would have to replace at least one of the other two and do so is such a way as to ensure that there was no loss vs the benefits accrued from the current status of the relevant scheme.

One way of phasing either or both out would be to introduce a DC scheme for new entrants and those that change post/grade. Working out how to convert the fully DB pensions to DC would be tricky, but it could be something as relatively simple as freezing the "old" pension remuneration at current entitlements (e.g. lump sum + half salary guaranteed on full retirement), with a full DC pension to take over the rest of the period of service.

Paulzx

Farmer Pudsey wrote: »

PS pensioners live longer than the average person..

That's a new one for me. I'd be very interested to know more about it. Never heard it before

antoobrien

Paulzx wrote: »

That's a new one for me. I'd be very interested to know more about it. Never heard it before

Probably more correct to say that because they retire earlier (often between 55-65 after 35-40 years service), they collect a pension for longer.

Paulzx

antoobrien wrote: »

Probably more correct to say that because they retire earlier (often between 55-65 after 35-40 years service), they collect a pension for longer.

That's a different point.

The post states that Public service workers "live longer than the average person"

That has nothing got to to do with retirement age.

I'm just interested to see more detail on that "fact"

Farmer Pudsey

Paulzx wrote: »

That's a new one for me. I'd be very interested to know more about it. Never heard it before

People in certain socio-economic groups live longer than others. Pension funds do liability calculation re same. This is one of the reasons why DB pension funds such as Waterford Glass, Irish Examiner and AIB has issue's.

The average life expectancy is around 76 for men and 81 for women. however if you reach 60 on average the people that do have a longer life expectancy. Also depending on your socio-economic group this would increase if you are skilled compare to unskilled or a professional compared to a tradesperson.

So a pension fund set up for a bank needs a higher level of funds than one that deals with carpenters and you need less of a fund again if it was bottlewashers that were in your pension scheme.

PS tend to live longer that the average in the population. So we may well be funding the averge PS pension for those that can retire at 60 or less for 30 years.

This is not just an Irish phenonem it is an issue accross Europe along with the cost of the contributary and non-contributary pension. As all these are funded out of day to day taxation our dependancy rate will climb in the next 20 years.

Some of the funding projections treat PS lifespans the same as the rest of the population. This is an error in the calculation if you calculate that the aver recipent will recieve a pension for 20 years and they are getting that pension for 27 or 28 then you will have a huge deficit. You also have the issue that any publuc servant that has a partner. that that partner will recieve 50% of the rate until they die. This increases the liability when added lifespan is added in.

Paulzx

Farmer Pudsey wrote: »

PS tend to live longer that the average in the population.
.

I understand the concept of an earlier retirement age meaning you will claim a pension for more years (if you live) and consequently it will cost more. That's not what i'm querying

It's the statement i have quoted above that i can't get my head around.

How and why do public sector workers live longer than a non public sector worker?

I'm genuinely interested to see an expansion of that statement or studies to that effect.

Godge

antoobrien wrote: »

I don't think it could be a third scheme, it would have to replace at least one of the other two and do so is such a way as to ensure that there was no loss vs the benefits accrued from the current status of the relevant scheme..

That still doesn't get over the problem that a new single public-service wide "career average" pension scheme for new entrants was introduced on 1 January 2013 that will cut the average cost by 20-30%. The old DB scheme was closed to new entrants. Going again with another new scheme in say 2016 would cause immense IR difficulties.

Pension schemes because of their nature tend to change slowly and not quickly or often.

antoobrien wrote: »

One way of phasing either or both out would be to introduce a DC scheme for new entrants and those that change post/grade. Working out how to convert the fully DB pensions to DC would be tricky, but it could be something as relatively simple as freezing the "old" pension remuneration at current entitlements (e.g. lump sum + half salary guaranteed on full retirement), with a full DC pension to take over the rest of the period of service.

It actually would be quite simple to close the current DB scheme, freeze benefits and move existing public servants to the new career-average scheme. It would just mean calculating a preserved pension entitlement for everyone.

For example, take a person who is on the fifth point of the executive officer scale with 19 years service. Salary = €35,749 *19/80 = pension of €8490 (this would be uprated at 60/65 to the then salary level then applicable as is the case with preserved pensions currently). He could then accumulate service for the next 21 years on the basis of the cheaper career average scale.

Farmer Pudsey

Paulzx wrote: »

I understand the concept of an earlier retirement age meaning you will claim a pension for more years (if you live) and consequently it will cost more. That's not what i'm querying

It's the statement i have quoted above that i can't get my head around.

How and why do public sector workers live longer than a non public sector worker?

I'm genuinely interested to see an expansion of that statement or studies to that effect.

If you read my previous post I explained it in some detail. Sorry if you are not able to understand it.

Paulzx

Farmer Pudsey wrote: »

If you read my previous post I explained it in some detail. Sorry if you are not able to understand it.

I'm sorry but you have not explained where you got the fact that Public Sector workers have a longer life expectancy than the rest of the population.


Have you a link to a study that backs this up?

Godge

Farmer Pudsey wrote: »

People in certain socio-economic groups live longer than others. Pension funds do liability calculation re same. This is one of the reasons why DB pension funds such as Waterford Glass, Irish Examiner and AIB has issue's.

The average life expectancy is around 76 for men and 81 for women. however if you reach 60 on average the people that do have a longer life expectancy. Also depending on your socio-economic group this would increase if you are skilled compare to unskilled or a professional compared to a tradesperson.

So a pension fund set up for a bank needs a higher level of funds than one that deals with carpenters and you need less of a fund again if it was bottlewashers that were in your pension scheme.

PS tend to live longer that the average in the population. So we may well be funding the averge PS pension for those that can retire at 60 or less for 30 years.

This is not just an Irish phenonem it is an issue accross Europe along with the cost of the contributary and non-contributary pension. As all these are funded out of day to day taxation our dependancy rate will climb in the next 20 years.

Some of the funding projections treat PS lifespans the same as the rest of the population. This is an error in the calculation if you calculate that the aver recipent will recieve a pension for 20 years and they are getting that pension for 27 or 28 then you will have a huge deficit. You also have the issue that any publuc servant that has a partner. that that partner will recieve 50% of the rate until they die. This increases the liability when added lifespan is added in.

Public servants cross all socio-economic groups (other than long-term social welfare recipients and the self-employed who do not get employee pensions anyway). There are some public servants employed as manual labourers, gardeners, caretakers, fire-fighters etc who have physically demanding jobs and also many others who sit behind desks. Teachers and lecturers stand in front of a class while nurses are semi-active in a pressurised environment. Putting all of them into one basket is counter-inituitive.

Furthermore, the reason why gardai, prison officers and firemen can retire early is because it was originally found that they live less long than the general population. Are you aware of any studies that show the opposite? If so, shouldn't we be addressing the early retirement issue if that is the problem?

AlexisM

Paulzx wrote: »

How and why do public sector workers live longer than a non public sector worker?

I haven't seen any studies but bear in mind that what was originally said was about public sector employees vs. rest of population, not vs. private sector workers. If it's true, some possible reasons include:

• People in poor health are less likely to be working - therefore those working are, on average, healthier than 'the rest'
• Public sector workers tend to have higher educational levels - life expectancy improves with educational attainment
• Workers generally can afford better health care than the unemployed

Godge

AlexisM wrote: »

I haven't seen any studies but bear in mind that what was originally said was about public sector employees vs. rest of population, not vs. private sector workers. If it's true, some possible reasons include:

• People in poor health are less likely to be working - therefore those working are, on average, healthier than 'the rest'
• Public sector workers tend to have higher educational levels - life expectancy improves with educational attainment
• Workers generally can afford better health care than the unemployed

Yes, but the point was being made that the problem is the cost of public service pensions was being underestimated. If what you say is true, then it is a problem common to workers generally rather than a public service pension issue only as those not working don't qualify for an occupational pension.

If there is a problem with the actuarial calculation of pension entitlements for workers generally, it shouldn't be turned into another public/private argument.

If the original point made by Farmer Pudsey is to stand up, it must be shown that public sector employees live longer than private sector employees.

sarumite

AlexisM wrote: »

I thought we aere all clear a few pages back that the pension levy was a paycut, not a pension contribution. Apparently no serious commentator call it anything but a paycut.

Apparently to even call it such would have you labelled as a "PS hater". Thats the current ad-hominem doing the rounds.

Godge

sarumite wrote: »

Apparently to even call it such would have you labelled as a "PS hater". Thats the current ad-hominem doing the rounds.

Oh dear me.

There are two pension deductions made from public servants.

There is the traditional 6.5% deduction (1.5% for pre-1995 civil servants) which is a superannuation payment and which has been in existence for many years.

Then there is the pension-related pay deduction (around 7%) introduced in 2009/10.

It is only the second of these that is called a pay cut.

At the time the second one was introduced, many economic commentators and boards posters said it was good that public servants were now paying for their pensions which was usually a statement made in complete ignorance of the fact that public servants had been making pension contributions for years. and yes, all serious commentators call it a pay cut.

Usually when people say they are paying into their pension, they are referring to the first original deduction which is a pension deduction.

Clear now?

Paulzx

Godge wrote: »

Oh dear me.

There are two pension deductions made from public servants.

There is the traditional 6.5% deduction (1.5% for pre-1995 civil servants) which is a superannuation payment and which has been in existence for many years.

There are many sections of the PS that contributed 6.5% before 1995. Many only contributed 1.5% but it was not consistant across the board.

Riskymove

sarumite wrote: »

Apparently to even call it such would have you labelled as a "PS hater". Thats the current ad-hominem doing the rounds.

who says that?

anyways, as the Pension levy is supposed to reduce the cost of pensions (i.e. go towards cost of current pensions as opposed to contribute to an individual's pension) it would only seem reasonable that if the entire pension structure was changed to a private pension scenario that the funds be used for that instead

sarumite

Godge wrote: »

Oh dear me.

There are two pension deductions made from public servants.

There is the traditional 6.5% deduction (1.5% for pre-1995 civil servants) which is a superannuation payment and which has been in existence for many years.

Then there is the pension-related pay deduction (around 7%) introduced in 2009/10.

It is only the second of these that is called a pay cut.

At the time the second one was introduced, many economic commentators and boards posters said it was good that public servants were now paying for their pensions which was usually a statement made in complete ignorance of the fact that public servants had been making pension contributions for years. and yes, all serious commentators call it a pay cut.

Usually when people say they are paying into their pension, they are referring to the first original deduction which is a pension deduction.

Clear now?

I am not arguing that the levy is a pay cut. I have agreed with that argument a number of times. However, it seems that it is not that clear to many since some PS workers on here refer to it as a pension contribution when they are discussing how much their pay goes towards their pension. However they get a pass when they do as such, whereas when someone who is not a PS workers makes the same claim they are labelled as "PS haters".

AlexisM

Godge wrote: »

Oh dear me.

There are two pension deductions made from public servants.

There is the traditional 6.5% deduction (1.5% for pre-1995 civil servants) which is a superannuation payment and which has been in existence for many years.

Then there is the pension-related pay deduction (around 7%) introduced in 2009/10.

It is only the second of these that is called a pay cut.

At the time the second one was introduced, many economic commentators and boards posters said it was good that public servants were now paying for their pensions which was usually a statement made in complete ignorance of the fact that public servants had been making pension contributions for years. and yes, all serious commentators call it a pay cut.

Usually when people say they are paying into their pension, they are referring to the first original deduction which is a pension deduction.

Clear now?

Godgey Godgey Godgey, what shall we do with you... it is clear that you are not clear which comment follows which.

sarumite wrote: »

Apparently to even call it such would have you labelled as a "PS hater". Thats the current ad-hominem doing the rounds.

followed my

AlexisM wrote: »

I thought we were all clear a few pages back that the pension levy was a paycut, not a pension contribution. Apparently no serious commentator call it anything but a paycut.

which followed kceire’s

kceire wrote: »

I'd rather get back all my contributions and pension levies in order to look after my own pension to top up my state pension.

So kceire referred to contributions AND levies so it is clear he/she is referring to that which is actually a paycut – hence my comment followed by sarumite’s comment followed by your misunderstanding. All clear now?

And just so it’s even clearer, it’s not 6.5% of salary. It’s 3% of pensionable remuneration and 3.5% of net pensionable remuneration which, for example, works out at about 4.6% on a 45K salary, 5.1% on a 60K salary – nowhere near enough to fund the final salary defined benefit that PS employees receive.

Farmer Pudsey

Godge wrote: »

Yes, but the point was being made that the problem is the cost of public service pensions was being underestimated. If what you say is true, then it is a problem common to workers generally rather than a public service pension issue only as those not working don't qualify for an occupational pension.

If there is a problem with the actuarial calculation of pension entitlements for workers generally, it shouldn't be turned into another public/private argument.

If the original point made by Farmer Pudsey is to stand up, it must be shown that public sector employees live longer than private sector employees.

Nearly all private sector DB pension schemes are under funded. You have to ask why. There sre two reasons.

The first relates to new accountancy/actuarial rules by the pensions boards. This forces all pension funds to have enough in them in the case of a windup to fund said pensions. This means that in a down turn when fund values drop these schemes are in need of funding by the employer who may be under pressure due to downturn anyway.

However the second reason is the use of acturial provisioning by the Trustee/Owners. These often use country wide life expectancy as opposed to socio-economic grouping. History has told us in the case of windup DB schemes leave massive shortfalls. If you look at Waterford Glass, the Examiner group at present, I believe that the Clearys scheme ( this was defunded during the boom I think), also AIB. The Aerlingus/Dublin airport scheme and there are hints about Independant newspapers have funding issues.

Now back to the PS and OAP there is no funding in place of any substance just a theory that it can be funded out of day to day spending. In the case of the ps this is build on the theory that present day contributions will today pensions and that this will be ok into the future. However the issue with private sector BD schemes tells us different.

Now back to projected life expectancy. Lower socio economic grouping have a lessor life expectancy. You also have certain working groupings such as those employed in the building sector, farming and trucking driving that have lower life expectancies due to livestyle and are mainly private sector workers. Single males are another grouping and even though these crosss the private and public sector there would be a larger demographic in the private sector.

AIB has solved some of it DB scheme funding by putting is it 1 billion into the fund. The only other DB fund that is on a fairly secure footing is the Eircom which restructured the scheme a few years ago. It trustees took an acturial position of an average life span of 84 years for its workers I believe against other accountancy advice. It would more than likly have a higher male than female workforse for historical reasons. It would also be a good starting point for PS life expectancy.

From this we could assume that life expectancy in the PS is much higher than average nationwide life expectancy. Therefore if the average PS retires at 61 or 62 they will draw the pension for at least 22-23 years. For those that have the option of retiring earlier at 55 you can assume that they will draw a pension for up near 30 years.

Godge

Paulzx wrote: »

There are many sections of the PS that contributed 6.5% before 1995. Many only contributed 1.5% but it was not consistant across the board.

I know, local authorities, VECs, teachers have all contributed 6.5% from the year dot.

Godge

Farmer Pudsey wrote: »

Nearly all private sector DB pension schemes are under funded. You have to ask why. There sre two reasons.

The first relates to new accountancy/actuarial rules by the pensions boards. This forces all pension funds to have enough in them in the case of a windup to fund said pensions. This means that in a down turn when fund values drop these schemes are in need of funding by the employer who may be under pressure due to downturn anyway.

However the second reason is the use of acturial provisioning by the Trustee/Owners. These often use country wide life expectancy as opposed to socio-economic grouping. History has told us in the case of windup DB schemes leave massive shortfalls. If you look at Waterford Glass, the Examiner group at present, I believe that the Clearys scheme ( this was defunded during the boom I think), also AIB. The Aerlingus/Dublin airport scheme and there are hints about Independant newspapers have funding issues..

Those are private sector pension fund issues.

Farmer Pudsey wrote: »

Now back to the PS and OAP there is no funding in place of any substance just a theory that it can be funded out of day to day spending. In the case of the ps this is build on the theory that present day contributions will today pensions and that this will be ok into the future. However the issue with private sector BD schemes tells us different..

If the working population is growing faster than the ranks of public sector pensioners then the theory that present day contributions and/or general taxation will fund tomorrow's public sector pensions holds true. That equation is of more importance than any other.

You can then add to that the ameliorating effect of the changes to pension terms and the fact that over the last few years private sector earnings have grown while public sector earnings have fallen (though the latter is not an indicator of the future but most recent and most immediate happenings have the biggest effect on projected costs of anything).

You then add to that the fact of the NPRF which although depleted is still there and will start to grow again. If it is was meant to help with pensions paid adter 2025, its recent travails may mean that it is after 2035 when it starts to help but it has not gone away completely.

Farmer Pudsey wrote: »

Now back to projected life expectancy. Lower socio economic grouping have a lessor life expectancy. You also have certain working groupings such as those employed in the building sector, farming and trucking driving that have lower life expectancies due to livestyle and are mainly private sector workers. Single males are another grouping and even though these crosss the private and public sector there would be a larger demographic in the private sector..

Males in the prison service, gardai, fire-fighters, caretakers, service officers with lower life expectancy don't count?

Farmer Pudsey wrote: »

AIB has solved some of it DB scheme funding by putting is it 1 billion into the fund. The only other DB fund that is on a fairly secure footing is the Eircom which restructured the scheme a few years ago. It trustees took an acturial position of an average life span of 84 years for its workers I believe against other accountancy advice. It would more than likly have a higher male than female workforse for historical reasons. It would also be a good starting point for PS life expectancy.

From this we could assume that life expectancy in the PS is much higher than average nationwide life expectancy. Therefore if the average PS retires at 61 or 62 they will draw the pension for at least 22-23 years. For those that have the option of retiring earlier at 55 you can assume that they will draw a pension for up near 30 years.

Much higher? Have you controlled for the stressful nature of the jobs held by gardai etc, the 40 years standing by teachers etc.

AIB is a bank, very different to teachers, nurses, gardai, army, prison officers, engineers, caretakers, general operatives, craft workers etc which are across the public service. You must remember that civil servants and administrative workers are only a small percentage of the public service.

Head The Wall

Godge

Plenty of people spend a full 40 hours a week every week on their feet. Teachers do 22 hours classtime a week and have a third of the year off.

Godge

Head The Wall wrote: »

Godge

Plenty of people spend a full 40 hours a week every week on their feet. Teachers do 22 hours classtime a week and have a third of the year off.

Not disagreeing with you, but equating public servants with bankers in terms of life expectancy when there are huge differences in the jobs they do is wrong.

Not saying which has a longer or better life expectancy, just saying they are oranges and apples.

Farmer Pudsey

Godge wrote: »

Those are private sector pension fund issues.





If the working population is growing faster than the ranks of public sector pensioners then the theory that present day contributions and/or general taxation will fund tomorrow's public sector pensions holds true. That equation is of more importance than any other.

You can then add to that the ameliorating effect of the changes to pension terms and the fact that over the last few years private sector earnings have grown while public sector earnings have fallen (though the latter is not an indicator of the future but most recent and most immediate happenings have the biggest effect on projected costs of anything).

You then add to that the fact of the NPRF which although depleted is still there and will start to grow again. If it is was meant to help with pensions paid adter 2025, its recent travails may mean that it is after 2035 when it starts to help but it has not gone away completely.




Males in the prison service, gardai, fire-fighters, caretakers, service officers with lower life expectancy don't count?



Much higher? Have you controlled for the stressful nature of the jobs held by gardai etc, the 40 years standing by teachers etc.

AIB is a bank, very different to teachers, nurses, gardai, army, prison officers, engineers, caretakers, general operatives, craft workers etc which are across the public service. You must remember that civil servants and administrative workers are only a small percentage of the public service.

I did not use life expectancy for AIB to compare to the PS. Rather included it as one of a number that had funding difficulty. The reality is that DB schemes accross the private sector are in difficulty. I used the life expectancy from the Eircom pension fund.

It would be a good comparrison and if anything on the low side as historically the DB scheme would be more male than female. This should in theory allow for actuarial calculation of a expectancy age of below the average national female age. However they are allowing for three years above it.

It is forecast that our dependancy rate will rise over the next 40 years from less than 18% at present to a level of about 45% by 2050.
http://www.economicshelp.org/dictionary/d/dependency-ratio.html

Taxation or contributions from then existing workers will not be able to support the present pension structore as reformed from day to day taxation long before that.

In general you have to look at the total PS workforce general Operative and Craft workers would work in a far more healthy and safe work envoirment than craft workers in the general building industry or some other private sector industries such as farming and fishing.

We have more than likly reach the zenith of PS employment so the number of pensioners to workers will climb at a steady pace over the next 20 years unless we get massive population growth. The general working populatiom may grow but as can be seen from the above projections the dependancy rate is set to climb very fast.

I cannot see the NPRF recovering before the 2040 just in time to start paying off the bonds for the IBRC.

noodler

Godge wrote: »

the fact that over the last few years private sector earnings have grown while public sector earnings have fallen

PS pay on average higher now than it was in Q1 2008 despite pay cuts.

Private sector pay lower.

Despite the massive gap.

noodler wrote: »

2008Q1 2008Q2 2008Q3 2008Q4 2009Q1 2009Q2 2009Q3 2009Q4 2010Q1 2010Q2 2010Q3 2010Q4 2011Q1 2011Q2 2011Q3 2011Q4 2012Q1 2012Q2 2012Q3 2012Q4
Private sector 642.54 636.61 624.10 644.20 631.82 618.08 609.38 631.03 612.46 614.87 604.22 629.07 610.56 614.67 608.29 621.86 623.89 616.93 615.45 623.43
Public sector 904.80 930.51 930.14 956.71 934.00 946.09 963.76 964.74 895.43 907.84 940.35 917.06 893.82 893.70 916.83 919.05 917.46 916.95 925.75 921.99


Ok, we are talking about averages here and it is a blunt instrument so lets leave out the whole 50% average gap for a moment.

From the above table, we can see that PS pay is higher than it was during the peak. Private sector pay is lower.

This is despite the fact there has been a collapse in Private sector jobs.

creedp

noodler wrote: »

PS pay on average higher now than it was in Q1 2008 despite pay cuts.

Private sector pay lower.

Despite the massive gap.

Couple of quick comments - the PS figure does not include the PS levy pay cut (av 7%) and it includes semi-state pay which has not been subject to the 12-15% pay cuts that PS pay has been subject to. I fully agree with your point about an average being a very crude measure.

fall

creedp wrote: »

Couple of quick comments - the PS figure does not include the PS levy pay cut (av 7%) and it includes semi-state pay which has not been subject to the 12-15% pay cuts that PS pay has been subject to. I fully agree with your point about an average being a very crude measure.

I heard last week that the semi state bodies got a pay increase. Did anyone else hear this? How would you go about confirming.

With regards to the pension levy and superannuation I pay around €700 a month. So when figures don't include the pension levy deduction it is a sizeable amount that they don't take into account. The net is hugely different to the gross.

fall

Head The Wall wrote: »

Godge

Plenty of people spend a full 40 hours a week every week on their feet. Teachers do 22 hours classtime a week and have a third of the year off.

22 hours class time multiplied by 30 students equals 660 teenagers a week. Tell me another job where people deal with that volume weekly. Everyone of them have individual needs.
Also in my own school teachers have been punched in the face, spat at through their car window sitting at the lights, threatened to have their car burnt out, intimidated, verbally abused etc.

Paulzx

fall wrote: »

22 hours class time multiplied by 30 students equals 660 teenagers a week. Tell me another job where people deal with that volume weekly. Everyone of them have individual needs.
Also in my own school teachers have been punched in the face, spat at through their car window sitting at the lights, threatened to have their car burnt out, intimidated, verbally abused etc.

Hey, you knew what you signed up to. It's tough sh*t if you get smacked by a pupil. Perfectly acceptable


......insert sarcasm......

Gumbo

fall wrote: »

I heard last week that the semi state bodies got a pay increase. Did anyone else hear this? How would you go about confirming

A close friend of mine works for electric Ireland and she's been on a pay freeze since 2009.
A lough she's in the admin/interactive billing, so non technical as such.

It may be different across different sections, I don't know.

They have also moved office since and go no extra money, not that she wanted it, it suited her as it was closer to home but they motioned during the boom, they would of had to pay staff to facilitate the move, which I've seen happen across public and private sectors.