Government to reverse some Public Secor Pay cuts

Rightwing · 13-08-2014 04:27PM

not yet wrote: »

When services are sold off the only ones to win are big business.

They employ staff at minimum wage, cut the service to the bone, and care about nothing only profit.

If that's the market rate. I fail to see the advantage for instance in paying a bin man €40K p.a

not yet · 13-08-2014 04:27PM

PeteFalk78 wrote: »

Is that true for post 1995 PS though? I thought that they have a Class A PRSI so will receive a full OAP upon retirement?

Very few would have a full stamp entitling them to full state pension..

PeteFalk78 · 13-08-2014 04:27PM

antoobrien wrote: »

What are the assumptions it's based on apart from 60k salary (i.e. contribution rate etc).

Isn't the contribution rate dependent on the salary?

Riskymove · 13-08-2014 04:28PM

PeteFalk78 wrote: »

Is that true for post 1995 PS though? I thought that they have a Class A PRSI so will receive a full OAP upon retirement?

they recieve the OAP but their Occupational pension is reduced by the value of the OAP so that the overall amount is the same

not yet · 13-08-2014 04:32PM

Rightwing wrote: »

If that's the market rate. I fail to see the advantage for instance in paying a bin man €40K p.a

Market rate = race to the bottom, but sure once we don't have to pay PS staff a living wage we all win.

Just on a side note...

People believe the average PS wage is 50K, this figure is distorted by taking into account every single person who receives a PS wage, from consultants on 250k to advisers on 200k, whilst the Private sector do not include chief executives bank managers or the like, just saying...

90% of people I know in the PS earn 25k-40k

Rightwing · 13-08-2014 04:39PM

not yet wrote: »

Market rate = race to the bottom, but sure once we don't have to pay PS staff a living wage we all win.

Just on a side note...

People believe the average PS wage is 50K, this figure is distorted by taking into account every single person who receives a PS wage, from consultants on 250k to advisers on 200k, whilst the Private sector do not include chief executives bank managers or the like, just saying...

90% of people I know in the PS earn 25k-40k

It really isn't.

not yet · 13-08-2014 04:39PM

Rightwing wrote: »

It really isn't.

Yes it is.

not yet · 13-08-2014 04:42PM

Market rate will always be determined by who else is offering the same service.

This leads to cutting costs to the bone to get the business, thus leading to wage cuts re: minimum wage.

Icepick · 13-08-2014 04:48PM

I am sure you race to the bottom when doing your weekly shop.

Rightwing · 13-08-2014 04:48PM

not yet wrote: »

Market rate will always be determined by who else is offering the same service.

This leads to cutting costs to the bone to get the business, thus leading to wage cuts re: minimum wage.

If the market rate for a secretary is €15 pr hr, and in the PS it's €30, one of them is inefficient. And let's just say, it's not the market rate.

not yet · 13-08-2014 05:02PM

Rightwing wrote: »

If the market rate for a secretary is €15 pr hr, and in the PS it's €30, one of them is inefficient. And let's just say, it's not the market rate.

I know of no secretary in the PS on 30euro per hour, but then again that's not what you want to hear.

Tigger · 13-08-2014 05:27PM

not yet wrote: »

When services are sold off the only ones to win are big business.

They employ staff at minimum wage, cut the service to the bone, and care about nothing only profit.

so private sector staff are paid minimum wage now?

Rightwing · 13-08-2014 05:27PM

not yet wrote: »

I know of no secretary in the PS on 30euro per hour, but then again that's not what you want to hear.

So in effect you are agreeing. The PS rate should be very similar to the market rate, ridiculing your other argument.

not yet · 13-08-2014 05:35PM

Rightwing wrote: »

So in effect you are agreeing. The PS rate should be very similar to the market rate, ridiculing your other argument.

If you say so..

Rightwing · 13-08-2014 05:39PM

not yet wrote: »

If you say so..

Otherwise the system is inefficient.

What the Government ought to be doing is slashing costs for everyone, both business and employees. A high cost economy will eventually lead to bankruptcy.

Peter Flynt · 13-08-2014 05:40PM

The public sector were the first to have separate financial cuts placed on them in 2009 when two budgets saw their pay reduced by an average of 15%.

They pay 63% of all income after 32,800 to the state.

Rightwing · 13-08-2014 05:46PM

Peter Flynt wrote: »

The public sector were the first to have separate financial cuts placed on them in 2009 when two budgets saw their pay reduced by an average of 15%.

They pay 63% of all income after 32,800 to the state.

We don't necessarily know if this is true or otherwise.

Many private sector companies may imposed cuts on employees prior to that. Many probably went bust, thereby deeming that a financial cut.

not yet · 13-08-2014 05:47PM

Peter Flynt wrote: »

The public sector were the first to have separate financial cuts placed on them in 2009 when two budgets saw their pay reduced by an average of 15%.

They pay 63% of all income after 32,800 to the state.

Shush..we don't like that talk round here.

antoobrien · 13-08-2014 05:56PM

PeteFalk78 wrote: »

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?

We get a pension booklet every year from the company that runs our (private) pension scheme. According to them, to fund €18,928.94 per year my final fund needs to be €478,564.90. There's no mention of a lump sum, but to give some equivalence, we'll assume that there's allowance for 20 years in there - that leaves 99,986.10 spare (roughly 21% of the fund).

The assumptions behind that are 10% salary contribution & 1,000 AVC per year, with 3% return on the fund annually and a 3% yearly increase in salary each year.

Back to our notional PS worker with a 270k fund. Using the same assumptions, 20 years + lump sum to spare, the the 240k funds would produce an equivalent private pension comprising of a €56,410.77 lump sum and an annual pension of €10,679.46.

PeteFalk78 wrote: »

Is that a lush pension?

Looks it from here.

Peter Flynt · 13-08-2014 06:01PM

antoobrien wrote: »

We get a pension booklet every year from the company that runs our (private) pension scheme. According to them, to fund €18,928.94 per year my final fund needs to be €478,564.90. There's no mention of a lump sum, but to give some equivalence, we'll assume that there's allowance for 20 years in there - that leaves 99,986.10 spare (roughly 21% of the fund).

The assumptions behind that are 10% salary contribution & 1,000 AVC per year, with 3% return on the fund annually and a 3% yearly increase in salary each year.

Back to our notional PS worker with a 270k fund. Using the same assumptions, 20 years + lump sum to spare, the the 240k funds would produce an equivalent private pension comprising of a €56,410.77 lump sum and an annual pension of €10,679.46.

Looks it from here.

The Public Sector worker (Post 1995) pays PRSI at the full rate (A1).

Unlike private sector workers they are not provided with the state OAP contributory pension which is 230 per week or 12K per annum.

ardmacha · 13-08-2014 06:09PM

antoobrien wrote: »

We get a pension booklet every year from the company that runs our (private) pension scheme. According to them, to fund €18,928.94 per year my final fund needs to be €478,564.90. There's no mention of a lump sum, but to give some equivalence, we'll assume that there's allowance for 20 years in there - that leaves 99,986.10 spare (roughly 21% of the fund).

The assumptions behind that are 10% salary contribution & 1,000 AVC per year, with 3% return on the fund annually and a 3% yearly increase in salary each year.

Back to our notional PS worker with a 270k fund. Using the same assumptions, 20 years + lump sum to spare, the the 240k funds would produce an equivalent private pension comprising of a €56,410.77 lump sum and an annual pension of €10,679.46.
.

These calculations ignore the fact that if a person paid in 270K over 40 years and they got 3% return then the pot would have grown to 470K odd, or much the same.

barneystinson · 13-08-2014 06:13PM

antoobrien wrote: »

We get a pension booklet every year from the company that runs our (private) pension scheme. According to them, to fund €18,928.94 per year my final fund needs to be €478,564.90. There's no mention of a lump sum, but to give some equivalence, we'll assume that there's allowance for 20 years in there - that leaves 99,986.10 spare (roughly 21% of the fund).

The assumptions behind that are 10% salary contribution & 1,000 AVC per year, with 3% return on the fund annually and a 3% yearly increase in salary each year.

Back to our notional PS worker with a 270k fund. Using the same assumptions, 20 years + lump sum to spare, the the 240k funds would produce an equivalent private pension comprising of a €56,410.77 lump sum and an annual pension of €10,679.46.

Looks it from here.

I've never heard of any pension scheme that didn't envisage 25% of the fund being paid as a tax-free lump sum at retirement. Not sure whether in your case that is additional to or included in your 478.5k figure...

patrick 1932 · 13-08-2014 06:46PM

o great are fg-labr trying to out do ff and start buying votes next thing will be the tents at Galway races

not yet · 13-08-2014 07:41PM

patrick 1932 wrote: »

o great are fg-labr trying to out do ff and start buying votes next thing will be the tents at Galway races

Just show you get you out fg away here now for the same money.

since we are throwing words together I thought I'd join you.

PeteFalk78 · 13-08-2014 07:47PM

antoobrien wrote: »

We get a pension booklet every year from the company that runs our (private) pension scheme. According to them, to fund €18,928.94 per year my final fund needs to be €478,564.90. There's no mention of a lump sum, but to give some equivalence, we'll assume that there's allowance for 20 years in there - that leaves 99,986.10 spare (roughly 21% of the fund).

The assumptions behind that are 10% salary contribution & 1,000 AVC per year, with 3% return on the fund annually and a 3% yearly increase in salary each year.

Back to our notional PS worker with a 270k fund. Using the same assumptions, 20 years + lump sum to spare, the the 240k funds would produce an equivalent private pension comprising of a €56,410.77 lump sum and an annual pension of €10,679.46.

Looks it from here.

Those figures I posted are the figures contributed to the pension purely from the public servant alone, it doesn't include any contributory funds added to by the employer/government. You didn't realise this or you chose to ignore?

Employer pension contributions in the private sector generally match the contributions made by the employee. If the same figure is applied to the public sector then that would give a pension pot of around .....boom......500k.

excluding any pension returns previously mentioned by ardmacha

hmmm · 13-08-2014 08:05PM

PeteFalk78 wrote: »

Employer pension contributions in the private sector are around 50%.

What?

PeteFalk78 · 13-08-2014 08:19PM

hmmm wrote: »

What?

Sorry typo. I mean typically the employer would match the contributions made by the employee.

Gumbo · 13-08-2014 09:26PM

PeteFalk78 wrote: »

Is that true for post 1995 PS though? I thought that they have a Class A PRSI so will receive a full OAP upon retirement?

Post 95 staff pay the same PRSI contributions as everybody in the workforce, but they don't get get the COAP on top of their pension, it's included and capped at 50% final salary.

not yet · 13-08-2014 09:36PM

kceire wrote: »

Post 95 staff pay the same PRSI contributions as everybody in the workforce, but they don't get get the COAP on top of their pension, it's included and capped at 50% final salary.

True, as I've been trying to say. If PS worker retires on 40k salary they get 400 a week pension, The state pension is means tested against this and they will get approx 80euro saving the state 156euro on their pension.

Gumbo · 13-08-2014 09:48PM

not yet wrote: »

True, as I've been trying to say. If PS worker retires on 40k salary they get 400 a week pension, The state pension is means tested against this and they will get approx 80euro saving the state 156euro on their pension.

Not means tested at all.
If I retire on a 40k salary, this getting a 20k pension, 12k is my COAP and 8k comes from my PS pension. That's the 20k make up. No means testing etc as it's set in stone.

Government to reverse some Public Secor Pay cuts

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