Government to reverse some Public Secor Pay cuts

Tim Robbins

Tim Robbins wrote: »

It is insane considering pension contribution as a tax. Tax you pay for other things not something you get back yourself.

That is like calling my need to buy Milk and butter a tax. I am on 99% tax rate so.

The big drawback of the public sector is that once you want the cake no-one else will want you. If you were working in IT public sector and tried to get back into private sector you could really struggle. That means you are signing up to be a lifer.

Now, if you are on some cushy number pulling in 80K a year (twice what you get in private sector when you factor in all the benefits) that might suit you but when that little bit of boredom kicks in to every job and you just want a change you are trapped.

https://www.youtube.com/watch?v=tSNWeXGZMcU

You have to be a very type of "settled" person to hack this.
Another thing, I work in the private sector and I have come across a few wasters in my time. They are a pain to work with. Now, at least there is the possibility they get bad reviews etc or even get the sack.

In the public sector nothing happens. That would reck my head.

+ most common people slagging you thinking you do nothing.

It is like being a D4 head. Has its advantages (access to better looking women, no scumbags living near you) but given its advantages, a lot of people wouldn't want to be one. Same with public sector.

Sleephead

Tim Robbins wrote: »

It is insane considering pension contribution as a tax. Tax you pay for other things not something you get back yourself.

That is like calling my need to buy Milk and butter a tax. I am on 99% tax rate so.

There's a contribution AND a levy.

But don't let the facts get in the way of your diatribe

Icepick

as exchequer finances improve

OK
National debt
2008 - 65,000,000,000
2014 - 180,000,000,000

as % of GDP
2008 - 45%
2014 - 120%

Mongfinder General

Tim Robbins wrote: »

It is insane considering pension contribution as a tax. Tax you pay for other things not something you get back yourself.

That is like calling my need to buy Milk and butter a tax. I am on 99% tax rate so.

The levy is a tax. I will never see one penny of it back. An here's why. I already pay into two pension schemes. My own scheme and a separate spouses and children's scheme. These are compulsory. I do not have a choice. I do not want to pay into any of the above because by the time I reach retirement there will be nothing left in these schemes. These schemes will be insolvent because of too many dependants and too few contributors. It's actually worse than a tax. You expect something back from taxation. I am likely to get very little.

Bob24

Icepick wrote: »

OK
National debt
2008 - 65,000,000,000
2014 - 180,000,000,000

as % of GDP
2008 - 45%
2014 - 120%

Ah don't be spoiling our national party now ;-) Since when do facts matter?

Little CuChulainn

sabat wrote: »

How old is your wife and how long has she been working in the PS? Presuming she's in good health she'll probably see her 100th birthday and will have several decades of state-backed free money after her retirement, unless the system collapses (which it probably will.) Her current pension is worth way more than she pays for it and any logical private sector worker would give their right arm to pay those deductions for those benefits.

I'm not sure if this is a genuine post or not. Her 100th birthday? The average life expectancy is 78. That's 20 years after the earliest retirement age for most public service workers. That's after paying 10% of her wage into the scheme for 40 years plus PRSI. I've yet to see someone actually do workings on how much a public sector wage actually costs.

PeteFalk78

Little CuChulainn wrote: »

I've yet to see someone actually do workings on how much a public sector wage actually costs.

Say the average public sector pay is 60k a year I think, so lets take it from there for the average post 1995 public sector worker.

That person would pay roughly €130 in pension related deductions a week.

That's 270k contributed to a pension over 40 years (we'll bring this down to 240k because of scales and salaries)

That person can expect a lump sum of 90k upon retirement. That brings the pot down to 150k of own monies put in. Excluding any SW handouts...... that person is entitled to 18k a year pension. 150k/18k = 8 years pension before they even reach parity with what they've contributed.

Is that a lush pension?

Tim Robbins

Mongfinder General wrote: »

The levy is a tax. I will never see one penny of it back. An here's why. I already pay into two pension schemes. My own scheme and a separate spouses and children's scheme. These are compulsory. I do not have a choice. I do not want to pay into any of the above because by the time I reach retirement there will be nothing left in these schemes. These schemes will be insolvent because of too many dependants and too few contributors. It's actually worse than a tax. You expect something back from taxation. I am likely to get very little.

You get a defined benefit pension. That's worth a lot more than 10% of your salary.

Little CuChulainn

PeteFalk78 wrote: »

Say the average public sector pay is 60k a year I think, so lets take it from there for the average post 1995 public sector worker.

That person would pay roughly €130 in pension related deductions a week.

That's 270k contributed to a pension over 40 years (we'll bring this down to 240k because of scales and salaries)

That person can expect a lump sum of 90k upon retirement. That brings the pot down to 150k of own monies put in. Excluding any SW handouts...... that person is entitled to 18k a year pension. 150k/18k = 8 years pension before they even reach parity with what they've contributed.

Is that a lush pension?

Certainly sounds like one. I would have one or two questions though. Where do you get the figure of 60k average wage? I presume that must include all management ranks and upwards. How did you calculate that lump sum of 90k? Is the 18k per year inclusive of the standard state pension?

barneystinson

Tim Robbins wrote: »

You get a defined benefit pension. That's worth a lot more than 10% of your salary.

Doesn't change the fact the fact that the so called pension levy is a pay reduction. It was confirmed as such by the minister who introduced it. It isn't a pension contribution.

This crap about the DB pension being "worth more than 10%" - SO WHAT! Most large employers who operate occupational pension schemes have employers' contributions which often match the employees' contributions...

Always number 1

Old news people - when this levy was introduced, the unions agreed to it on the basis that the Government promised that once things started picking up again, the levy would be reversed starting with the lowest paid workers..

Can someone point me in the direction of the "Hospital consultants pay cuts to be reversed" thread
Thanks

PeteFalk78

Little CuChulainn wrote: »

Certainly sounds like one. I would have one or two questions though. Where do you get the figure of 60k average wage? I presume that must include all management ranks and upwards. How did you calculate that lump sum of 90k? Is the 18k per year inclusive of the standard state pension?

I think the average public sector wage is between 50k-60k.
Lump sum of 90k as it is 1 1/2 times finishing salary of 60k
18k per year is not inclusive of standard state pension which is 12k on top.

I'm trying to show people how much money is contributed to the pension.

PeteFalk78

Little CuChulainn wrote: »

Certainly sounds like one.

What's so lush about it?

Little CuChulainn

PeteFalk78 wrote: »

I think the average public sector wage is between 50k-60k.
Lump sum of 90k as it is 1 1/2 times finishing salary of 60k
18k per year is not inclusive of standard state pension which is 12k on top.

I'm trying to show people how much money is contributed to the pension.

The average public sector pay may be that but it is not what many make. It is distorted by high earners in middle to upper management. As is the lump sum.

Tim Robbins

barneystinson wrote: »

Doesn't change the fact the fact that the so called pension levy is a pay reduction. It was confirmed as such by the minister who introduced it. It isn't a pension contribution.

This crap about the DB pension being "worth more than 10%" - SO WHAT! Most large employers who operate occupational pension schemes have employers' contributions which often match the employees' contributions...

Do the Math. To make a defined contribution benefit worth as much as a defined benefit one you would need to be putting in about 40% of your salary.

So 10% is a small price to pay for something that is worth about 40% of your salary.

Neon_Lights

I think theyre pumping up their payments as a prempt to them getting destroyed in the Next General Election, They don't care really and are just showing their true colors.

I think in order to stop this a G.E. Should be called every two years, as near the end of a stint, politicians care little for public initiatives and more for their own security and continuity.

barneystinson

Tim Robbins wrote: »

Do the Math. To make a defined contribution benefit worth as much as a defined benefit one you would need to be putting in about 40% of your salary.

So 10% is a small price to pay for something that is worth about 40% of your salary.

No, you do the mathS.

Put it up on the board, show your workings, state your assumptions. Otherwise it's just all hot air.

Brussels Sprout

Neon_Lights wrote: »

I think in order to stop this a G.E. Should be called every two years, as near the end of a stint, politicians care little for public initiatives and more for their own security and continuity.

Would this not just exacerbate the problem?

Neon_Lights

Brussels Sprout wrote: »

Would this not just exacerbate the problem?

Depends how you look at it, it would definitely weight public satisfaction with initiatives more highly as there is an increased chance of the government losing power more frequently. That would be my thoughts on the matter.

Kristopherus

Tim Robbins wrote: »

Do the Math. To make a defined contribution benefit worth as much as a defined benefit one you would need to be putting in about 40% of your salary.

So 10% is a small price to pay for something that is worth about 40% of your salary.

You are omitting the fact that the NTMA have use of the PS pension contribution from day 1. A nice little earner interest-wise for the National Pension fund. The same fund that had to be raided to bail out the problems caused by ........... the private sector.:pac:

Tim Robbins

barneystinson wrote: »

No, you do the mathS.

Put it up on the board, show your workings, state your assumptions. Otherwise it's just all hot air.

Say you buy an annuity that gives you 3% return.

So if you have 500K in your pension fund you get 15K a year.
If you have 1 million in your fund you get 30K a year.
1.5 million 45K a year and about 1.25 million to get 37.5K a year.

The average teacher will get 2 / 3's their closing salary so that's about 37.5K a year in their defined benefit pension.

So, for a private sector person to get that they have to put 1.25 million over a 40 year career. That means 30K a year.

So if they are 50K a year (a reasonable salary), they need to put away 30K to get the same pension as a teacher.

Right, there's my maths. I have simplified things a little of course but you should get the general point that a defined benefit pension is a major nub of gold and paying 10% for it is f all.

PeteFalk78

Tim Robbins wrote: »

The average teacher will get 2 / 3's their closing salary so that's about 37.5K a year in their defined benefit pension.

Your figures are all wrong. The average PS worker will get 1/3 of their closing salary if they have full service. That is 18k a year excluding the SW OAP which you shouldn't include in your figures unless you are intentionally trying to obfuscate.

barneystinson

Tim Robbins wrote: »

Say you buy an annuity that gives you 3% return.

So if you have 500K in your pension fund you get 15K a year.
If you have 1 million in your fund you get 30K a year.
1.5 million 45K a year and about 1.25 million to get 37.5K a year.

The average teacher will get 2 / 3's their closing salary so that's about 37.5K a year in their defined benefit pension.

So, for a private sector person to get that they have to put 1.25 million over a 40 year career. That means 30K a year.

So if they are 50K a year (a reasonable salary), they need to put away 30K to get the same pension as a teacher.

Right, there's my maths. I have simplified things a little of course but you should get the general point that a defined benefit pension is a major nub of gold and paying 10% for it is f all.

2/3 of final salary? Very very few in the PS get that, it's 50% for almost all members. So straight away your simplified figures are nearly 25% overstated.

Class A PRSI payers have their contributory pension included in that figure, so using the figures from your example, that's a 25k pension (50% of 50k) of which about 12k is the normal State pension. So that's a 13k DB pension. According to your figures above that's about 430k of a fund.

You also assume no return whatsoever on the contributions (employees or employers) over the individual's career in accumulating that fund, but using your straight line zero return methodology that'd be 10,750 p.a.

As I mentioned earlier, it's very common for employers to match employees' contributions into a scheme. That'd be 5,375 each. Which is 10.75% of a 50k salary.

Now, let me be very clear, all of those figures are nonsense - both yours and mine. Difference is, I don't believe my nonsense figures whereas you do yours.

Sheldons Brain

Tim Robbins wrote: »

Right, there's my maths. I have simplified things a little of course but you should get the general point that a defined benefit pension is a major nub of gold and paying 10% for it is f all.

The usual deliberately misleading posting that seems to characterise these things.

A teacher will receive a lump and then half of their salary less the OAP. This is more like 15K. Simplifying things is one thing but ending up with a figure two and half times the actual figure is either grossly incompetent or malicious. Which is it?

Brussels Sprout

Neon_Lights wrote: »

Depends how you look at it, it would definitely weight public satisfaction with initiatives more highly as there is an increased chance of the government losing power more frequently. That would be my thoughts on the matter.

It would lead to the worst kind of populism. No government would want to make tough but necessary decisions which are often taken in the beginning to middle period of 5 year cycles.

Long term capital investment in infrastructure would be neglected while governments tried to buy elections with tax cuts and public sector pay raises.

Idbatterim

It would lead to the worst kind of populism. No government would want to make tough but necessary decisions which are often taken in the beginning to middle period of 5 year cycles.

Long term capital investment in infrastructure would be neglected while governments tried to buy elections with tax cuts and public sector pay raises.

I would prefer if money was spent on DU and Metro North, as opposed to even tax cuts for myself. But the parties would probably be better off spending money on this the year after they have been elected or re-elected. Why not just increase the entry point to the crazy marginal rate or reduce the marginal rate, that way public and private sector are better off and they are by far the most deserving for more money in their pockets... But even ahead of those and the most deserving would be those who lost their jobs and are currently jobless...

sabat

Little CuChulainn wrote: »

I'm not sure if this is a genuine post or not. Her 100th birthday? The average life expectancy is 78.

Life expectancy includes deaths of children, accidents, chronic illness, travellers etc. An educated, employed, non-smoking, physically active woman in her 30s or 40s today can reasonably expect to make 100.

PeteFalk78

sabat wrote: »

Life expectancy includes deaths of children, accidents, chronic illness, travellers etc. An educated, employed, non-smoking, physically active woman in her 30s or 40s today can reasonably expect to make 100.

"Reasonably expect"? The odds are 6000/1 against :rolleyes:..... so enough of your diatribe.

http://www.genealogyintime.com/GenealogyResources/Articles/how_many_people_live_to_100_page1.html

Vizzy

sabat wrote: »

Life expectancy includes deaths of children, accidents, chronic illness, travellers etc. An educated, employed, non-smoking, physically active woman in her 30s or 40s today can reasonably expect to make 100.

Don't you know that all PS workers are uneducated and lazy as sin so she won't be active. If we assume that the woman also smokes I'd say she will be lucky to make it to retirement age at all.

creedp

Idbatterim wrote: »

I would prefer if money was spent on DU and Metro North, as opposed to even tax cuts for myself. But the parties would probably be better off spending money on this the year after they have been elected or re-elected. Why not just increase the entry point to the crazy marginal rate or reduce the marginal rate, that way public and private sector are better off and they are by far the most deserving for more money in their pockets... But even ahead of those and the most deserving would be those who lost their jobs and are currently jobless...

In summary, public servant should never again receive, nor deserve, pay increases!