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Public Service Pay Commission
09-05-2017 10:17pmRegistered Users Posts: 24,017 ✭✭✭✭Join Date:Posts: 23743
The Report of the Public Service Pay Commission has been released:
It makes for interesting reading and more interesting headlines, especially scare stories about public servants having to pay more for pensions:
"The report finds that public servants should pay more for the traditional standard guaranteed public service pension schemes that applied before 2013."
"Minister for Public Expenditure and Reform Paschal Donohoe has said the 12% to 18% premium put on pre-2013 pensions in the report is a "reasonable and fair assessment".
He said public service pensions had to be made affordable."
"In its report published on Tuesday, the commission suggests public service staff appointed before 2013 and who are covered by the standard or “legacy” pension schemes, as well as those groups who can accrue retirement benefits at a faster rate, should contribute more."
But what does the report actually say:
"The 2007 Benchmarking Body report concluded that,
on average, a fair rate for the employer cost of the
bulk of public service pensions would be just over
20% of salary, while a comparable rate for private
sector employees with occupational pensions
was around 8.5%. Taking the difference between
these estimates, it thus quantied the average
additional value of public service pensions relative
to private sector pensions as 12% of salary and
applied a corresponding discount of that amount
when comparing public service and private sector
remuneration levels in its report."
So salaries up until now have been based on a 12% differential being fully accounted for. So what about now? The Commission says:
"Accordingly, the Milliman report proposed
a revised costing estimated in the range of
23-25% for pre-2013 public servants with
standard accrual terms and a revised costing
in the range of 10-11% for pre-2013 private
sector employees. The updated differential
between the estimated costs for pre-2013 public
service employees and pre-2013 private sector
comparators is in the range of 13-14%."
So salaries are already discounted by 12% because of higher pensions, and now it has increased to 13-14%. That implies a 1-2% extra should be paid by public servants towards their pensions. Hardly demands the sensationalist headlines.
This will be interesting to follow.
One caveat - I haven't read or examined the pay chapter so there may be more to this.0