Croke Park II preliminary Talks started today

Godge · 04-03-2013 12:03AM

noodler wrote: »

It seems pretty clear that the wages figures on the DPER database website is wrong.

It clearly says 18bn which is at odds with the more regularly published figures.

Taking out the pension levy though is pretty disingenous again Godge.

I mean what does it take for some of the PS haters on here to accept that the pension levy is a pay cut. Here is Karl Whelan on the issue:

http://www.irisheconomy.ie/index.php/tag/pension-levy/

The Taoiseach and several Ministers are on record saying that it is a pay cut.

Galwayguy35 · 04-03-2013 01:38AM

I read there yesterday in the paper that because the Guards won't do anything other than their core duties as a protest about CP 2 the cost of policing the Dublin/Mayo match will hit the taxpayer for 10 k.

If the PS goes down the route of industrial action they won't be too popular with the rest of the people.

Hotblack Desiato · 04-03-2013 01:41AM

how does the supposed extra cost arise?
Gardai turning down voluntary extra duty funded by sporting bodies doesn't cost anyone anything.

AlmightyCushion · 04-03-2013 04:41AM

ninja900 wrote: »

how does the supposed extra cost arise?
Gardai turning down voluntary extra duty funded by sporting bodies doesn't cost anyone anything.

The only way I can think of would be a loss of income tax, PRSI and USC on the extra income the gardai would be getting for working it.

Riskymove · 04-03-2013 07:45AM

OMD wrote: »

Why do you need to compare it with private sector?

I don't but many will

[/QUOTE]Anyway if 20% earn over 65k surely it makes sense that the average can be above 60k.[/QUOTE]

makes sense? no not really, that is my point

indeed the median is below the average so its even more unlikely

creedp · 04-03-2013 09:34AM

Galwayguy35 wrote: »

If the PS goes down the route of industrial action they won't be too popular with the rest of the people.

Not wanting to be too facetious here .. but the one thing the PS doesn't have to concern itself with it losing popularity!

Paulzx · 04-03-2013 11:13AM

Galwayguy35 wrote: »

If the PS goes down the route of industrial action they won't be too popular with the rest of the people.

There's no such thing as an industrial action that is "popular" with the people. People don't go on strike on the basis of being popular

Godge · 04-03-2013 11:41AM

Galwayguy35 wrote: »

If the PS goes down the route of industrial action they won't be too popular with the rest of the people.

It doesn't matter whether the industrial action is popular or not.

Typical sequence of events.

Industrial Action commences. Public is disrupted. Public gets annoyed, pressurises politicians to do something about it. Politicians then either give in to industrial action or refuse to give in. Industrial action escalates. Public is further disrupted. Further pressure on politicians etc.

See, nowhere in that cycle of action is there a public sector interaction with the rest of the people.

creedp · 04-03-2013 12:42PM

Paulzx wrote: »

There's no such thing as an industrial action that is "popular" with the people. People don't go on strike on the basis of being popular

I was coming at this from the angle that the PS has no popularity left to lose at this point. Ater 4 years of the sustained depiction of all PS as being lazy, over-paid, underworked, not living in the real world, standing by and taking scarce resources from the underpriveledged, etc, there is no possibility that the PS could be popular with anyone.

Whether people consider it enough or not - its brutally obvious its the latter - after July 1 PS earning over €65k wil have seen their gross pay cut by over 20% since 2009. You can retort about increments, etc, etc, all you want and that is everybody's right, but if the average 15% pay cuts already imposed and the proposed 5.5% hadn't taken place, PS in this bracket would be earning 20% higher gross pay after July 1. Now I know the kind of responses that statement will illicit, but just once it would be nice to see some recognition of that contribution made. You can argue its not enough, no problem there, but the incesssant noise around CP1 protecting the wage levels of PS as if nothing has happenned since 2009 is simply disingenious IMHO.

What gets me as well is the constant view that as the State is broke, as any other business would do, it should slash wages to reduce the loss/deficit. Seems logical except it doesn't apply in the semi-states, it doesn't apply in the banks (see below in case you weren't aware!), etc. Also I was interested in reading this comment in the Irish Times on the 28 Feb that a business owner recently had to put the last of his savings into his business to keep it alive while also having to give a staff member a 15% salary increase. Why did the business owner do this? The accepted ecomomic strategy espoused here is that when the private sector is in trouble economically it cuts wages. I wonder why this guy didn't follow this logic? http://www.irishtimes.com/newspaper/opinion/2013/0228/1224330605695.html

http://www.irishtimes.com/newspaper/breaking/2013/0304/breaking5.html

Its gone to the point when Matt Cooper, in yesterdays Sunday Times, wrote about the negative scapegoating of the PS - and Matt is not known for his sympathetic views in this regard.

AlexisM · 04-03-2013 01:12PM

creedp wrote: »

Whether people consider it enough or not - its brutally obvious its the latter - after July 1 PS earning over €65k wil have seen their gross pay cut by over 20% since 2009. You can retort about increments, etc, etc, all you want and that is everybody's right, but if the average 15% pay cuts already imposed and the proposed 5.5% hadn't taken place, PS in this bracket would be earning 20% higher gross pay after July 1. Now I know the kind of responses that statement will illicit, but just once it would be nice to see some recognition of that contribution made. You can argue its not enough, no problem there, but the incesssant noise around CP1 protecting the wage levels of PS as if nothing has happenned since 2009 is simply disingenious IMHO.

But happened BEFORE 2009 is important too - PS workers got substantial benchmarking and other improvements because the country thought it was rich - turns out it wasn't rich after all and the largesse has to be reversed. If the PS had reaped no rewards in the good times, it would be particularly unfair to make them take the pain now and there would be more sympathy. But there is a perception of 'what goes up can't come down' in the PS.

kippy · 04-03-2013 01:16PM

AlexisM wrote: »

But happened BEFORE 2009 is important too - PS workers got substantial benchmarking and other improvements because the country thought it was rich - turns out it wasn't rich after all and the largesse has to be reversed. If the PS had reaped no rewards in the good times, it would be particularly unfair to make them take the pain now and there would be more sympathy. But there is a perception of 'what goes up shouldn't come down' in the PS.

I dont think anyone is daft enough to think that things "shouldn't" come down.
Things have come down across the board when it comes to wages for almost everyone, in either sector.
The issues are probably around the "fairness" of these cuts in an environment of ever increasing costs and a belief, either correct or incorrect, that certain sectors and people have escaped more lightly than others.

creedp · 04-03-2013 01:34PM

AlexisM wrote: »

But happened BEFORE 2009 is important too - PS workers got substantial benchmarking and other improvements because the country thought it was rich - turns out it wasn't rich after all and the largesse has to be reversed. If the PS had reaped no rewards in the good times, it would be particularly unfair to make them take the pain now and there would be more sympathy. But there is a perception of 'what goes up can't come down' in the PS.

Yea no problem with that. I don't think anyone is disputing that benchmarking happenned. But it is also an indisputable fact that gross wages for those over €65k will be 20% lower than they would have been had the last 3 pays cuts not be implemented. But again lets ignore what doesn't fit the argument and talk about what happenned in the past that better suits. Without checking the facts again it is my understanding that Benchmarking 1 gave the €65k+ people approx a 10% increase and benchmarking 2 a 0% increase. That has now been reversed but it doesn't mean that people can call for even bigger cuts. All I was saying is that there is absolutely no recognition of the 20% cuts and all on the 10% increase. Sometimes a bit of balance is useful too.

Riskymove · 04-03-2013 01:53PM

AlexisM wrote: »

But happened BEFORE 2009 is important too -

indeed

Benchmarking 1 increased the pay bill by around 7%
the cuts have been far in excess of that

12% was deducted from all pay increases in Benchmarking 2 to take account of the public pension scheme

6% of a national pay increase was canceled in response to the economic troubles

ardmacha · 04-03-2013 03:55PM

Benchmarking 1 increased the pay bill by around 7%
the cuts have been far in excess of that

And of course benchmarking 1 give varying increases, based on whether the unions concerned were friendly with Bertie Ahern. Everyone gets the same cuts of course, those who got almost nothing in Benchmarking as well as those who got a substantial amount.

Idbatterim · 07-03-2013 05:16PM

could the tax free lump sum not be taxed or stopped entirely? this has nothing to do with current or future pay or pension...

Gumbo · 07-03-2013 05:35PM

Idbatterim wrote: »

could the tax free lump sum not be taxed or stopped entirely? this has nothing to do with current or future pay or pension...

It should be taxed over a certain amount but if its stopped completely then employee contributions will have to be reduced also.

I don't see what PS pensions cannot be DC schemes for new recruits similar to ESB etc it won't save much at present but it will into the future and for future generations.

Godge · 07-03-2013 06:09PM

Idbatterim wrote: »

could the tax free lump sum not be taxed or stopped entirely? this has nothing to do with current or future pay or pension...

Legally, pensions (and lump sums) are deferred earnings and the property of the person who is due to receive them. While bankrupt pension schemes can do something about this, technically the state is not bankrupt and cannot touch the lump sums already accrued. Future pensionable service is a different matter.

kceire wrote: »

It should be taxed over a certain amount but if its stopped completely then employee contributions will have to be reduced also.

I don't see what PS pensions cannot be DC schemes for new recruits similar to ESB etc it won't save much at present but it will into the future and for future generations.

http://per.gov.ie/public-service-pension-reform/

Pensions have already been reformed for new entrants - see new link. It is rare that pension schemes are revisited as often as twice a year and I would think that any further changes to that pension scheme are some way off.

Farmer Pudsey · 08-03-2013 01:42AM

Idbatterim wrote: »

could the tax free lump sum not be taxed or stopped entirely? this has nothing to do with current or future pay or pension...

First of Batt you cannot selectivly tax so any change in taxation law will also effect private sector pensions. So taxation of Lump Sums will effect Private sector pensions. It is a benifit to private sector workers that they can take up to 1/3 of there pension as a lump sum that is tax free.

Godge wrote: »

Legally, pensions (and lump sums) are deferred earnings and the property of the person who is due to receive them. While bankrupt pension schemes can do something about this, technically the state is not bankrupt and cannot touch the lump sums already accrued. Future pensionable service is a different matter.

http://per.gov.ie/public-service-pension-reform/

Pensions have already been reformed for new entrants - see new link. It is rare that pension schemes are revisited as often as twice a year and I would think that any further changes to that pension scheme are some way off.

The real issue Godge is that the public service has no pension fund so how sustainable long term are PS pensions. It is arguable wheather the state is bankrupt or not.

The pension deficit for the state is massive after all it is not just PS pensions that are funded out of day to day expenditure but the OAP as well. Even though new entrants have a changed system it is questionable if PS and the OAP can be funded as the pension reserve fund was depleted to rescue the banks. The Trioka took the atitude that this was a Soverign fund so they plundered it.

A good case in point is pensioners from the Irish Examimer group they follow Waterford Glass, Irish Shipping and is it Cleary's into the pension abyess

kippy · 08-03-2013 10:05AM

Farmer Pudsey wrote: »

First of Batt you cannot selectivly tax so any change in taxation law will also effect private sector pensions. So taxation of Lump Sums will effect Private sector pensions. It is a benifit to private sector workers that they can take up to 1/3 of there pension as a lump sum that is tax free.

The real issue Godge is that the public service has no pension fund so how sustainable long term are PS pensions. It is arguable wheather the state is bankrupt or not.

The pension deficit for the state is massive after all it is not just PS pensions that are funded out of day to day expenditure but the OAP as well. Even though new entrants have a changed system it is questionable if PS and the OAP can be funded as the pension reserve fund was depleted to rescue the banks. The Trioka took the atitude that this was a Soverign fund so they plundered it.

A good case in point is pensioners from the Irish Examimer group they follow Waterford Glass, Irish Shipping and is it Cleary's into the pension abyess

The public sector pension fund is paid for by current (taxation and state income).
I believe the long term goal of the NPRF was to assist funding this into the future as well, but that's not long since burned.

I'll say it again, the state are not the same as any other employer when it comes to payments of any description to their employees.

murphaph · 08-03-2013 10:36AM

kceire wrote: »

It should be taxed over a certain amount but if its stopped completely then employee contributions will have to be reduced also.

I don't see what PS pensions cannot be DC schemes for new recruits similar to ESB etc it won't save much at present but it will into the future and for future generations.

Agreed but I'd go further and convert existing DB schemes to DC, as has been done by many large corporations including IBM in the past. DB schemes are pyramid schemes and are not realistic anymore, unless people are prepared to work until they are 75+

antoobrien · 08-03-2013 11:16AM

kippy wrote: »

The public sector pension fund is paid for by current (taxation and state income).
I believe the long term goal of the NPRF was to assist funding this into the future as well, but that's not long since burned.

The NPRF is not as badly off as many people would have us believe. The portion of the portfolio excluding BOI & AIB is currently valued at €6.1bn and this is being refocused to concentrate on investments in Ireland designed to allow the domestic economy to grow.

Yes the AIB investment is a mess - it's worth about 3/8 of what was invested and there's no sign of movement there, and there probably won't be until they start to get a handle on their mortgage book arrears.

The full cost of the BOI recap has been recouped through sale of part of the shareholding that was created, repurchase of warrants, sale of contingent capital (capital that's converted to shares under certain situations) and guarantee fees. I'm not sure how the sale of the contingent capital affects the NPRF shareholding of BOI - which was 15% - valued at €1.9bn as of the end of September (the share price is up 40% since then - though going from 9.5c to 14c a share isn't much to crow about).

Unfortunately for the NPRF, the money recouped from BOI has not been returned to the NPRF, it has been remitted to the exchequer. It's hard to know if/when the NPRF will start getting the proceeds of any sales of AIB/BOI related assets. There are a few possibilities - when we can balance out all the exchequer funded bank debt*, when we get out of the excessive deficit procedure, when debt falls below 100% of GDP, when the debt interest bill falls back below 4bn.

So while things aren't exactly rosy for the NPRF, they aren't as bleak as are being made out either. While it's not carrying out its original function of providing for the PS pension holders from 2025 on, it's going them a greater service now by helping to ensure that they get paid today.

* There has been €16.7bn bank related debt accounted for in the exchequer statements before the promissory note deal. Up to the end of February there has been (at least) a €6.27bn return to the exchequer from the recaps & guarantees - with a further 1.3bn due from Irish Life whenever that deal completes.

Gumbo · 08-03-2013 12:26PM

murphaph wrote: »

Agreed but I'd go further and convert existing DB schemes to DC, as has been done by many large corporations including IBM in the past. DB schemes are pyramid schemes and are not realistic anymore, unless people are prepared to work until they are 75+

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.

antoobrien · 08-03-2013 12:30PM

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.

It would depend on the terms of the deal, but I'd expect that's the least that would happen under any conversion. Such as scheme may have to do more than just that in order to make sure that those being converted don't end up in a worse financial position.

Farmer Pudsey · 08-03-2013 12:45PM

kippy wrote: »

The public sector pension fund is paid for by current (taxation and state income).
I believe the long term goal of the NPRF was to assist funding this into the future as well, but that's not long since burned.

I'll say it again, the state are not the same as any other employer when it comes to payments of any description to their employees.

Most of the NPRF is gone yes it was ment to partiall fund pensions down the line. The reality is that the funding of PS pensions and the OAP when the dependacy rate was much lower however the projectd dependancy rate will increase over the next forty years.

At the same time some of the IRBC bonds will be maturing and have to be paid. Unless we get substancial growth/inflation it may well be that these two issue will again cause huge finiancial stress to the country. It may not even take that long

PS pensioners live longer than the average person. There is a projection that these pensioners will live into there eighties on average. This will mean that PS pensioners retiring at 60 will draw for 20 years+ and some such as prision officers and guards if they retire at mid fifties may require pensions funds for nearly 30 years.

This mantra that the state can continue to fund OAP and PS pensions out of day to day taxation into the future is an illusion. It is a pyrimid scheme set up by the politician that do not look beyond the next 3-4 years.

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.

For younger PS this would be a very good idea however it would cause the immediate collapse of the pyrmid scheme that is PS pensions.

Godge · 08-03-2013 12:49PM

murphaph wrote: »

Agreed but I'd go further and convert existing DB schemes to DC, as has been done by many large corporations including IBM in the past. DB schemes are pyramid schemes and are not realistic anymore, unless people are prepared to work until they are 75+

antoobrien wrote: »

It would depend on the terms of the deal, but I'd expect that's the least that would happen under any conversion. Such as scheme may have to do more than just that in order to make sure that those being converted don't end up in a worse financial position.

There isn't a chance of any of this happening.

Legislation on public service pensions is complicated.

The best that could happen is that at some future date (2016, post Croke Park 2?) the Government could close the old pension scheme, preserve benefits and move existing public servants to the new pension scheme for future service.

This would probably be accompanied by an exit option/early retirement for those who wished to go.

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

Godge · 08-03-2013 12:56PM

Farmer Pudsey wrote: »

PS pensioners live longer than the average person. There is a projection that these pensioners will live into there eighties on average. This will mean that PS pensioners retiring at 60 will draw for 20 years+ and some such as prision officers and guards if they retire at mid fifties may require pensions funds for nearly 30 years.

This mantra that the state can continue to fund OAP and PS pensions out of day to day taxation into the future is an illusion. It is a pyrimid scheme set up by the politician that do not look beyond the next 3-4 years.

.

I think you are overstating the problem. A report in or around 2007/08 calculated the pension fund requirement at €120 bn or so by 2050.

However, this was based on a number of assumptions:

- growth of public service numbers by 20% by 2018
- CPI plus 2% for growth in earnings
- existing pension scheme remaining unchanged
- life expectancy continuing to rise

Since 2007/08, the opposite has happened.

Public service numbers have come down by 10% which reduces the number of future pensioners; average public service earnings are down while inflation has continued; there is a new cheaper pension scheme in place; life expectancy growth has slowed as happens in recessions.

As a result the public service pension problem is nowhere near as acute as it was predicted to be. I don't know how much these measures have addressed the problem but they are significant changes. In order to be able to state with confidence that the pension bill is unsustainable, you would want to do a bit of work of demonstrating it in actuarial terms.

AlexisM · 08-03-2013 01:08PM

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.

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.

creedp · 08-03-2013 01:52PM

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.

Post 95 public servants pay a 5% pension contribution and a 1.5% Spouses and Children's Scheme contribution. Seperate to that is the pay cut of av 7% which is fondly known as the pension levy when it suits.

murphaph · 08-03-2013 02:14PM

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.

That would be fair. The state pension is just as bad from a sustainability perspective as PS DB pensions IMO. Something will have to be done there as well. There is no political appetite for that of course as most people expect they'll draw the state pension someday, but we're all gonna have to take much more responsibility for our old age, private or public sector.

Riskymove · 08-03-2013 02:20PM

Idbatterim wrote: »

could the tax free lump sum not be taxed or stopped entirely? ...

it is taxed now, but at €200,000

Croke Park II preliminary Talks started today

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