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Hey, binners, I'm finding it particularly funny as this was the second post of the thread
clubber - Member
oh god, no!just look up TandemJeremy and half the threads he's been on to save having yet another unproductive discussion on this.
🙂 Mind, I am actually learning something here.
I am not misunderstanding him at all- I see the point he is making but its irrelevant.
this "liability" has only arisen because of the unique nature of the scheme. If it had been like a private scheme with the contributions being invested then there would be no liability that was unfunded.
So he cannot treat the future liabilities the same as a private scheme because the past contributions were no used in the same way as a private scheme.
You cannot compare chalk and cheese
You cannot compare chalk and cheese
You can. But you're best to only eat one.
You can review the ongoing accrual of benefits which is what I said above - people should get the benefits they were promised up to this point, the same as if they left the NHS now. The debate should be about what pension they should accrue going on from here. That's a perfectly reasonable debate to have IMO.
Clubber - that debate has been had - all new entrants are going on the new scheme which is sustainable
but does that mean that people who were already on the pension - eg you - continue to accrue a pension benefit as before? If so, I still see that as an issue based on what's been discussed here.
Why? the government took my contributions and spent them. If they hadn't done this and were not basing future projections of income on reduced contributions from a decreasing workforce and a decreasing payroll then this "deficit" would not be there.
OK, so your position is that the future projections are wrong and therefore the future deficit won't actually happen so that the liability is zero? I'd be interested to see how different the projections have to be for that to be the case.
Otherwise, I don't see it as unfair (annoying but not unfair) if the current pension scheme is stopped, you get exactly the benefits you were promised up to this point (same as if you left the NHS now) and then there's a different pension scheme that follows a sensible line on benefits payable against liability.
There will have been huge surpluses in the early years of the scheme - this along with more recent surpluses would if invested have ensured the sustainability of the scheme
Do you have proof of this, any figures which support your assertion?
which years was it in surplus, which years was in in deficit?
repeated assertions that there "will have been" amount to nothing - facts and figures please TJ.
What was the employers and employees contribution rate throughout the history of the scheme, that led to these huge surpluses that should have been invested? as far as I can see, the only reason for the current surplus is the tripling of the employers contribution since the millenium.
No clubber - I am saying the future projections are pessimistic.
Pessimism is considered accounting good practice - take the negative, don't assume the positive. If those rules had been followed by the banks...
regardless, how different do the assumptions have to be to forecast a surplus?
And I'm saying that your historical claims are wildy optimistic TJ, but you don't appear to be very keen on backing them up for some reason 🙄
Why? the government took my contributions and spent them.
I think you'll find they're doing that with all of us that pay NI without future guarantee of contribution rates or payouts
Clubber - if only I could have put it so succinctly, restores my faith in my ability to write intelligibly.
The overiding point remains that the fundamentalstarting point of pension liability management is that you evaluate your long term liabilities (ignoring new joiners) that you have incurred, incomings and outgoings in any one year are only inputs into this process.
Quite so. It's a pity that Thatcher didn't see this when she decided to tax pension scheme surpluses and allow companies to take contributions holidays. Cue downturn in the stock market and the concomitant closure of schemes, something that should've been unnecessary.
Guys, TJ will just not agree with you, he doesn't want to. You've explained to very well, but he's not prepared to understand that.
He just wants whatever it was he was promised 25 years ago.
Shame he's not got experience of the outside world, as he'd realise that only history is fixed, the future can change.
I still beleive that the Govt should close down all public pension schemes, honour the agreed benefits (to date), and start from a fresh with a more 'sustained' approach - for all.
Quite interesting to see TJ happy that his new collegues are getting a worse deal, from now, than he will get - comradeship in action? Oink, Oink...
Nice to see the insults coming in - shows the paucity of your arguenets again
Its really rather unpleasant the delight you have in this governments spiteful destruction of public sector pensions. Still - business as usual from the usual right wingers
Does that include me because it seems I don't agree with you TJ? I have to say that having read up on it now, I think that your argument about long term self-sustainability doesn't stack up. Can you provide the figures that Z11 has been asking for to back up your claims?
Agreed though, no need for the insults - TJ had thus far held off, so unnecessary.
TJ - Its not an insult, just a reading of the posts you've made
And I'm not a right-winger, far from it - I'm labour, but please notice the small 'l'. Old fashioned and believe in pragmatism and realism.
Like you I am mad about what has happened with my (various) pensions over the years, but it doesn't get me anywhere been mad...
I've Equitable ones (less said about that the better), deferred final-salary and cash ones - and we haven't even got onto what annuity my cash will buy. This is another area where a final salary schemes win-win - have you seen the reductions in this area recently?
And even if the Govt had invested your money, it still doesn't mean there wouldn't be this discussion - and returns vary, and as the phrase goes 'you can't buy history'.
No clubber - you appear to be actually listening and thinking about the issues -a rare thing on here. I disagree with some of your conclusions but thats OK
Phew. Wouldn't want to be slurred with lazy rightwinger stereotypes... 😉
TJ - not going to argue you're right or wrong, but I have been a public sector pension trustee. I do however have a question:
As the variables governing pensions assets and liabilities change pretty much daily, you're asking taxpayers to insulate you against that risk. Fair enough, it is a viewpoint, but rather than argue about entitlements, how would you go about persuading the large body of private (or no) pension holders and taxpayers that they should take your risk as well as their own?
oldbloke - again you are looking at this as tho it was an investment fund - it is not. (NHS) there is no "risk" associated with it as there is no investment fund that can go up and down.
Its a far smaller amount of money involved that the amount of subsidy given to the very rich in tax relief on their pensions.
Its a contractual entitlement.
basic fairness - we took lower salaries in anticipation of having decent pensions
There is no cash saving as all the reduced pensions will mean is that a greater sum of benefits will have to be paid out
tahts a few reasons
there is no "risk"
There is, it is known as longevity risk or in plain words the risk that the pensioners live longer than anticipated when the contributions were set.
mefty beat me to it...
I was very specific in referring to liabilities. It doesn't matter if a scheme is funded or not, it still looks at its liabilities and if it thought that on average it was going to have to pay a pension for an average of 10 years but now thinks that is going to be 15 years it looks at how to deal with that shortfall. That's risk and is the biggest risk in pensions management - life expectancy - and that's what you're asking taxpayers to cover.
So, again, how would you ask them? Given your contributions on other threads where you've pointed out the small % of higher rate taxpayers, your point on the rich is somewhat diversionary as you're speaking mostly to basic rate payers. Go on, sell them the deal.
As a former FD of a public sector body, I have to disagree on the salaries point being universal (although valid where there is a differnce) - plenty of salaries at or close to the private sector where I was. But, even where different, the pensions benefit far outstripped the salary shortcomings.
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TJ - you're being disingenuous again regards there being no "fund" - Calculations on the affordability of the pension scheme are made on four yearly Actuarial reports. Which are based on the use of a ‘notional fund’ as if all income from the start of the NHS Pension Scheme had been invested.
And before you tell me I'm talking rubbish, I'll be glad to point you towards the NHSBSA report that confirms it 😉
richmars - MemberJulianwilson,
I have worked as an engineer in modern hi tech companies for about 30 years. I have had a number of fairly senior positions, not one had a company car, or gym membership. I've been to a few trade shows, but I don't think the NEC is much of a perk. This is not unusual in the private sector.
Do you really believe everyone has free cars? Obviously some jobs have cars and perks, but I'm sure the vast majority don't.
Edit: And I had a 25% pay cut last year, just to keep the company afloat.
Richmars, (I have reread my post here and I don't want iot to sound like a 'my job's harder than yours for the money' willy-waving contest but I fear it will anyway 🙁 )
...my badly-made point was that the public sector pension is seen by most who pay into it as mitigating against a lower salary relative to qualifications, experience, responsibility and stress. Much like some folk see a company car as being 'worth' some of their pay which they would otherwise spend on a private car.
You do I am sure get paid according to the complexity, stress and risk of your job as well as the qualifications and experience required for it. My brother in law is the same age as me and has been in his field the same length of time I have. He is a degree qualified engineer of the 'sony wall of lcd screens' wierdy electronic type. His job is complex and would require a very bright graduate in engineering to understand the finer points. He works 40 hours a week and usually gets flexi if he stays late to get a project in. If you substitute 'twiddly electronics' for 'immensely fragile psyche of the abused teenager' we are so far quite equal on complexity, qualifications, years of service/experience and 'baffling people that ask you too many questions about what you do'.
On the other hand, unlike my job, he has no professional registration to consider, no risk that someone will die on his watch and under his direct (or even indirect) responsibility, no risk of him losing his registration through his acts or omissions and unless he loses his rag and stabs a colleague, no risk of actual criminal proceedings through his acts or omissions. Like you he doesn't have a company car [b]yet he earns £13k a year more than me.[/b] The 'stress and risks/perils' of my job are all also present for the overwhelming majority of police officers, radigraphers, nurses, social workers, soldiers (minus the professional registration bit) and teachers (minus the death but very much including the 'criminal proceedings' bit) amongst others.
Richmars, I expect you [s]are[/s] were paid commensurate to your qualification, skills and experience as well as stress it causes you and the risk of you geting it in the neck for it all going terribly wrong (I appreciate that 'terribly wrong' in engineering could be any point on a very broad spectrum from mild peril through to huge tragedy depending on what it is you engineer, but the greater the risk to the public or responsibility for this risk, the more that is reflected in your salary, much like in my work).
If your actual job or a similar one exists within public service, (as opposed to being contracted at great expense to the taxpayer to provide a service or product for a public body!) it is almost certainly paid significantly less than the job you are in now, at least before you accepted a 25% pay cut 🙁 . In the NHS this is the complaint of our own engineers, occupational therapists, psychologists, PA's, payroll and IT staff to throw out a few examples, who routinely see very similar or identical roles to their own advertised in the private sectormminus our spanky nice pension but at at attractively higher salaries.
Bottom line: The pension [s]is[/s] was one reason to stay with the lower pay.
With all due respect, some jobs just pay more than others so you haven't really given a very good example. I'm not poor by a long stretch (TJ would say I was minted 🙂 ) but typically lawyers earn lots more than me for the same amount of work, risk and experience.
Incidentally one other point to consider is that the salaries that are advertised are often quite different to what people actually earn but people only ever see the top figure thus distorting their view of what salaries are actually available elsewhere.
[i]Engineer in private sector, salary up to £40k[/i]
Really means
[i]we'll pay £40k in exceptional circumstances but will far more likely pay £30-£35k particularly in the current economic climate.[/i]
We come up against that in the private sector too with employees claiming that they could earn more elsewhere but when you compare actual salaries paid, it tells a different story.
Personally I think anyone earning over £42k a year shouldn't get tax breaks on pensions as they are in the super elite rich top 10% of the country.
[i]Personally I think anyone earning over £42k a year shouldn't get tax breaks on pensions as they are in the super elite rich top 10% of the country. [/i]
you forgot the 😉
So all of those who are complaining about possibly in the future having to pay small sums to top up the pensions of the public sector going to also be happy to loose the much larger subsidy to the private sector pensions of tax breaks?
Tax breaks on pensions for the richest few are 2-3 times as much per year as the potential shortfall on public sector pensions. Tax breaks for all private pensions are much much more than this
so - end tax breaks on private pensions completely?
Tax breaks on pensions for the richest few are 2-3 times as much per year as the potential shortfall on public sector pensions
Figures to support this claim please.
you could make that argument but since there's no liability issue with a tax break, what's the relevance to this other than a lazy attempt to make emotive point scoring comments?
[i]Quite interesting to see TJ happy that his new collegues are getting a worse deal, from now, than he will get [/i]
Did I miss TJ's answer on this?
TJ - love the way you ignore the bits you don't like.
Forget the "richest few" and other such generalisations. Provide information on the benefits from the scheme you object to having imposed on you vs those from a money purchase scheme with the same employee contribution and the rates employers are about to have to provide under the latest Pensions Act.
Then we can debate the specific merits of your complaint and it may help you articulate why taxpayers should cover your risk.
Talking tax breaks is again a distraction from your desire to have others cover your risk, but to answer your point: Remove the tax incentive and you remove the merit of a pension plan.
In conclusion?
TJ - this is a lifestyle choice for you, you don't need to work in the public sector
clubber - Memberyou could make that argument but since there's no liability issue with a tax break, what's the relevance to this other than a lazy attempt to make emotive point scoring comments?
It shows the massive hypocrisy
It cost the government 10 billion a year to give tax breaks on the pension funds of people earning over £150 000 pa but would only cost 4 billion a year to meet all the projected shortfall in all public sector pension funds.
It puts it in perspective
so I ask again - those of you that think public sector workers should loose their modest pensions do you support an end to tax relief on private pensions?
Remove the tax incentive and you remove the merit of a pension plan.
Same applies - make public sector pensions worthless and there is no incentive to be in them
It cost the government 10 billion a year to give tax breaks on the pension funds of people earning over £150 000 pa but would only cost 4 billion a year to meet all the projected shortfall in all public sector pension funds.
According to the Guardian, [url= http://www.guardian.co.uk/politics/reality-check-with-polly-curtis/2012/mar/07/taxing-the-rich-pensions-taxed?newsfeed=true ]here, [/url] removing tax relief on earnings over 150k would only bring in 840 million a year.
Quite a significant shortfall compared with your claim of Ten Billion, isn't it TJ?
However its nice to see you finally conceding there is a projected shortfall in public sector pensions of *four thousand million pounds* a year, most people would think thats a problem, the type of thing you might want to tackle.
I also think its an interesting psychology to say that If the government does not take something off you thats rightfully yours, then they're giving you a break - next time someone breaks into your house and steals the telly, you should maybe thank them for giving you the DVD player...
Umm to quote myself frrom another thread
Boys, just remember TJ isn't an engineer or a scientist, he is a nurse. So stop getting your knickers in a twist every time he says something. What TJ says is not actually a fact, set in stone or golden, it's most likely poorly informed bullshit. So the simple solution is to just ignore or dismiss him and not to pander to his ego by getting caught up in one of his pedantic argue fests.
But there is - the employer covers so much more of the risk in a public scheme that you gain that benefit. The benefit of a public sector pension is not dependent on the tax status of employee contributions - it is in its expression in terms of pension payment
If a money purchase scheme delivers nothing through a market collapse just as you price the annuity, there's no fallback.