[Closed] Public Sector and their pensions

of course there's hypocrisy. same as big companies avoiding huge amounts of tax while the relatively small value of welfare cheats is hyped.

But that's not the point being discussed and you're just diverting because you seem to be unable to justify your statements about the self-sustainability of the NHS pension.

No oldgit -there is no risk - a risk is unforeseen. Nothing here is,

clubber - I accept that there is a possibility that the NHS pension scheme may need a small amount of government support. I do not think this is unreasonable given the billions that have been taken out of the scheme by governments and given that the scheme has already been altered to reduce liabilities to a sustainable level.

Reducing pensions further will not produce savings as people will become eligible for benefits as well

I merely point out that even including the worse performing pension schemes the subsidy required is far less that the amount of subsidy given to a very small amount of rich people for their pensions.

so yoiu want to remove a 4 billion a year subsidy from millions of people an leave a ten billion subsidy for a much smaller grump of people who are much better off.

The teachers pension scheme has contributed 46 billion to the exchequer more than it has taken out for example

From the poor to the rich.

The government even has admitted that these extra contributions will only be used to pay off deficit - they are intending to get 2.8 billion a year in extra contributions to use to pay off the deficit.

TandemJeremy - Member

"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

Which is of course the aim here - make the pensions so unattractive that people opt out then the schemes collapse

so yoiu want to remove a 4 billion a year subsidy from millions of people an leave a ten billion subsidy for a much smaller grump of people who are much better off.

The guardian has already shot down your ten billion figure TJ

I see you're still avoiding backing up any of your claims with figures...

so we're back to you needing to provide figures for the claimed big surpluses taken by the state and the claimed small subsidy required in the future.

ooh and I have no issue with reviewing pension tax breaks for the seriously rich but once again it has zero relevance to this discussion so stop diverting.

clubber - Member

With all due respect, some jobs just pay more than others so you haven't really given a very good example.

Read the whole post clubber:

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 . [b][b]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[/b][/b], who routinely see very similar or identical roles to their own advertised in the private sector mminus our spanky nice pension but at at attractively higher salaries.

If a car was important to you, you might consider a job that paid a little bit less than other similar ones, but provided you with one for your personal use. A pension is important to some people and they have accepted lower wages in light of a great pension. Take away your company car and you might expect a bit back from your employer. Public servants are having their wages [s]frozen[/s] cut relative to inflation for three years and now the government wants to charge them for the 'company car' too. Give me back my £3k that I have lost in wage freezes and I might feel a bit better about putting some of it into my pension.

HTH.

clubber - sources given in earlier posts and plenty out there on google.

Why does the tax breaks have zero relevance? It shows the massive hypocrisy here. I don't see any of those calling for cuts in public sector pensions also calling for an end to tax relief on private pensions.

It really is rather amusing if very sad how much the tory press and tory party have been able to sell the line that public sector pensions are unaffordable.

Effectively the tories want to put an extra tax on public sector workers of 3% (its tax as it will go directly to the exchequer not into pensions) At the same time here will be a salary freeze. At the same time they want to reduce the pensions payable by a huge amount despite the fact most of the schemes have already been revised to reduce pensions dramatically

They are happy to spend the surpluses from the pension schemes but not happy to make any shortfall up

you're confusing need/want with a lifestyle choice here TJ

TJ, you may think I'm a git, but it isn't in the username.

You've been told what the risk is by more than one contributor, so until you're prepared to acknowledge such significant components of the debate nothing else from you is worthy of consideration.

I don't know what teachers pension scheme you're on about - I know of at least one funded one. Do you mean the Royal Mail scheme which hit the news recently and generated headlines like that? That's a scheme in deficit no matter what absurd public accounting policies show otherwise.

Anyway, enough of your diversions. Answer the questions and provide the evidence.

zero relevance to this discussion. Raise a new topic about it and I'll happily contribute. You're raising it because you've failed here at least to justify a lot of your key claims.

Disappointing because previously I reckoned you were probably right on self-sustainability but you've convinced me otherwise now.

Why does the tax breaks have zero relevance? It shows the massive hypocrisy here. I don't see any of those calling for cuts in public sector pensions also calling for an end to tax relief on private pensions.

This government like many before it will screw over those that would never vote for them anyway before they start messing with their own supporters. 😕

Small difference being that plenty of public servants regret having voted lib dem (I include myself here, mind you the Conservative candidate got in as usual in my constituency anyway) and inadvertently giving rise to what amounts to a conservative minority in government acting outside their election manifesto within mere months of the election.

Jota everyone might be ignoring your comments but you made me laugh out loud.

Phew - been away all day celebrating b'day. Thank goodness I haven't been following all of this instead. TJ, you make some valid points about the folly of the current system and then confuse it by saying it doesn't need reform - bizarre? Then accuse people of not understanding the basics of NHS and other pension funds when they clearly understand it better than you, fail to grasp that surplus does not equal sustainable and then lose any real credibility with this line:

TandemJeremy - Member

Which is of course the aim here - make the pensions so unattractive that people opt out then the schemes collapse

That is simply absurd and simply obscures any of your valid points. If you really think that the government and its advisers (Hutton etc) have the over-riding strategic objective of seeing then NHS pension scheme (sic) collapse, then there is little if any point in debating the subject.

Like any pyramid scheme, there is more likelihood of collapse from the basic fact that it is based on shocking foundations than any perceived (or otherwise) political objectives.

Oldbloke - sorry - slip of the keyboard - there is a couple of varieties of oldgits on here and I got you uconfused. No insult intended.

I do mean the teachers pension fund

The NUT has calculated the total payments into and from the TPS over the period 1923 to date, using its official valuation reports and accounts. Adjusting these figures in line with GDP growth shows that at least £46.4bn more in current prices has been paid into the TPS in contributions over the years than has been paid out in pensions.

http://www.teachers.org.uk/node/14349

NHS is the same - this is why is immoral to do this pensions robbery - a variety of governments has taken surpluses and spent them - now that money could have been used to cover deficits its not there. We have already paid once - now they want us to pay again - and even worse the government has acknowledged the extra payments will not go into pensions but into paying of the government debt

Teamhurtmore - are you really that naive? Of course the destruction of the public pension schemes is a part off the aim - and people on here even the knowledgeable ones cannot grasp the difference between and investment funded private scheme and a revenue funded government backed scheme.

No private investor would be allowed to spend the funds!

But TJ - the teachers pension scheme is currently in deficit - so you've shot your own argument about the affordability of the NHS scheme in the foot 😆

a variety of governments has taken surpluses and spent them

Yes, you keep saying this, but keep not backing it up with any figures or evidence that supports your claim of consistent surpluses.

You are doing it again! Of course, no private investor would be allowed to spend the funds. The set-up is flawed and yet you want to defend the status quo. That's the naive bit IMO. People do recognise the obvious differences between types of fund and they are able to understand where the underlying principles are the same. They also understand the very basic difference between surplus and sustainability.

Governments, that great allocator of scarce resources, have created a fudge primarily to help their accounting. But its sustainable????And then you defend a system that works in favour of the higher paid members of the NHS (final salary, oops BMA vested interest again).. You really have lost me on this one. Unless you are just having an elaborate wind up.

I thought I had a low opionion of politicians but you trump me if you think they are deliberately out to collapse the whole scheme!

TJ - follow that link and try and open the link to the report and you get error 404.

As, by definition, a fund should have more in it than it has paid out, the story lists a completely non relevant measure. All that story says is that previous contributions have covered pensions already paid. It makes no mention of there being enough for the future. Clearly if the link to the full report still worked there might be more to it, but the brief headline is nonsense.

A fund should have enough to pay all its future liabilities for past and current members. Unless it can be stated that on current actuarial valuations, fund + growth + future contributions > liabilities, there's a problem of deficit and hence affordability.

TJ your logic is seriously flawed.

"This shows that this year the civil service pension scheme will be in deficit by £2.1bn; the teachers pension scheme in deficit by £3bn; the armed forces in deficit by £1.6bn; the judicial pension scheme will be balanced; and the NHS pension scheme will be £1.8bn in profit."

So you jump on the £1.8bn profit(sic) from the NHS scheme but ignore the following.

"On the NHS scheme the Treasury points out that by 2015-16 the surplus is reduced to £200m and that the reason it is in surplus is that there is a larger number of employees now paying in than there are receiving pensions. But those people paying in will ultimately have to receive a pension and unless the NHS carries on growing it cannot remain in surplus."

How do you square that circle?

And don't give me the line that if contributions had been invested all would be OK. Have you seen the state of the funded Local Government Pension Scheme lately?

This still going on? Have you sorted it all yet?

Yes binners, one poster has categorically proven the existence of "confirmation bias", either that or is a brilliant master of elaborate leg-pulling!

This still going on? Have you sorted it all yet?

all done Binners baby

TJ has made a life choice to stay in the public sector

I think it's reached its conclusion, for me at least. TJ hasn't convinced me of his viewpoint and now he's just throwing accusations around - people don't understand, they're unable to think for themselves, etc. while not backing up statements that he's making.

I think that'll do me but thanks TJ for taking the time to explain earlier because I do now have a much better understanding of the situation so this thread has actually taught me something and amazingly changed my view on it, just maybe not in the way you intended.

Oldbloke - that would be true if it was an investment funded scheme - however its revenue funded and to date for the teachers 46 billion more has gone into it than has come out. where is this 46 billion? spent by the governments

Same for the NHS - if it had been a ring-fenced investment fund it would have billions in it.

So how can this be morally right? We have paid in far more than has been taken out and the governments have spent that surplus and it then using the fact it has spent the surplus to justify us having to pay more to get less in future.

Whats worse the extra we will pay will not be put into pensions but will be used to reduce the deficit. 2.8 billion a year more.

So how can this be morally right?

TJ

i) is the Teachers pension scheme [b]currently[/b] in Surplus or Deficit?

ii) You've been careful to repeatedly comment out that 46 billion has been paid in... what are the current liabilities?

Same for the NHS - if it had been a ring-fenced investment fund it would have billions in it.

Yes, but not enough billions. That's why almost all private sector final salary pension schemes, who actually have to account for their future liabilities on a sensible basis, are closed to new entrants or closed altogether. As are the majority of public sector schemes (e.g. post office) that are required to be funded. They are simply too expensive to be sustainable.

Ace, here we are:

The pension schemes liabilities published in the Teachers’ Pension Scheme Annual Accounts 2010-11 (HC 988) are £192,400m.

So - 46 billion in paid in, but liabilities of one hundred and ninety two billion pounds

[b][u]£192,400,000,000[/u][/b]

So, one question answered - can you answer the other one I posed please... is the Teachers pension scheme currently in surplus or deficit?

What i'd like to know is why can private sector teachers pay into the teacher pension scheme?