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Did I hear right - Civil Service pensions?

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Did I hear right - Civil Service pensions?

On BBC Breakfast News earlier this morning, in an article about today's strikes, a couple (both Civil Servants) contacted the programme complaining that they stand to loose £80,000 per year in the pension changes.  Did I mis-hear this or is the taxpayer actually expected to support rediculously large pension payments - even if the figure was £18,000 (it definitely sounded like £80,000 though) that must relate to a pension that the average taxpayer could only dream about.  It was pointed out that the figure was based on conjecture by a trade union leader but nevertheless I'm speechless.
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Re: Did I hear right - Civil Service pensions?

Quote from: Reuters
"It is hardly surprising that public sector workers are on strike today," said Brendan Barber, head of the Trade Union Congress (TUC) union body.
"They know that they are being asked to play an unfair part in deficit reduction.

Possibly because they have been having an unfair slice of the cake for too long.
http://uk.reuters.com/article/2011/06/30/uk-britain-strike-idUKTRE75S27920110630
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randpwar
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Re: Did I hear right - Civil Service pensions?

Don't know about Civil Service but did you know that the average Local Government Pension is only about £4000. Don't beleive all you read in the Daily Mail / Express type of papers
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Re: Did I hear right - Civil Service pensions?

Quote from: randpwar
the average Local Government Pension is only about £4000.

That may be true but it may well be based on a fairly short average length of service, many people have a lot of pensions from different employments as a result of moving jobs.
If you earn an average wage and have a decent (final salary) pension scheme you'd probably accrue a pension worth £4000 pa after about 8 years of employment.  Most people (outside the public sector anyway) don't stay 8 years in the same job nowadays.  Also, bear in mind that Local Government employs a high proportion of part time workers which will also artificially reduce the average pension value so don't assume that £4000 'average' represents a poor pension.
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Re: Did I hear right - Civil Service pensions?

Based on how many years service - that is the one fact always missed out
http://www.guardian.co.uk/society/2011/jun/26/public-service-pensions-striking-matter
Quote
His report says the average public sector average pension is about £7,800 per year, while the median payment is about £5,600. In 2009-10, the average public sector pension payments were: local government worker £4,052; NHS worker £7,234; civil servant £6,199; teacher £9,806; and member of the armed forces £7,722.
Quote
But it points out that, according to the Hutton report, fewer than 2% of civil servants achieve this length of service and the average civil service career is 13 years.
http://www.gmb.org.uk/newsroom/latest_news/gmb_on_lg_pension_talks.aspx
Quote
5 Two-thirds of the local authority workforce are part-time women and the average length of service in the LGPS is less than ten years.
So compare those figures with any private section pension provision
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Re: Did I hear right - Civil Service pensions?

Quote from: Oldjim
Two-thirds of the local authority workforce are part-time women

What are these 'part-time women' the rest of the time?  Cheesy  I think I may have seen some of them around the dodgier bars in our town centre on a Saturday night.  Grin
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alanf
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Re: Did I hear right - Civil Service pensions?

People may stay in a job for relatively few years but one the advantages of a public sector pension was (and as far as I know is) that you had the option to transfer pension rights between employers on similar terms. So a proportion of those average pensions will have been earned and paid for working in a number of different jobs. Given a choice, all but the youngest public sector workers are likely to prefer to stay within the public sector for this reason.
I don't know how much effect it would have on costs but I think that some of the public anger would be reduced if the "gold plated" pensions were capped at a level which would provide a decent living standard. What really annoys most folks is reading of high ranking public officials earning hundreds of thousands of pounds per year (e.g. a reported £218,000 for Suffolk County Council chief)  getting a great pension as well. With that sort of income they should be arranging most of their retirement finances themselves.
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Re: Did I hear right - Civil Service pensions?

Quote from: alanf
you had the option to transfer pension rights between employers on similar terms

And not doing that fairly was always the "con" that private sector final-salary schemes employed.
If you changed jobs you had the choice of leaving behind a "frozen" shrinking pension or transferring to the new employers scheme which somehow ALWAYS resulted in a large loss in benefits.
Things improved somewhat in more recent years, but many people, like me, have been bitten hard by this.
I think the employers used to work on the basis that a significant portion of the funding for their pension schemes came from people "moving on" and thus significantly reducing future liabilities by far more than the transfer values paid out.
That is one reason why many of the, regularly mis-sold, private schemes introduced in the Thatcher years initially appeared attractive but have subsequently proved to be equally flawed.  Angry
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Re: Did I hear right - Civil Service pensions?

Quote from: alanf
What really annoys most folks is reading of high ranking public officials earning hundreds of thousands of pounds per year (e.g. a reported £218,000 for Suffolk County Council chief)  getting a great pension as well. With that sort of income they should be arranging most of their retirement finances themselves.

I couldn't agree more!
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Re: Did I hear right - Civil Service pensions?

Just to add my thoughts here..
I used to be in the civil service. When they did my pension forcast, based on another 40 years of service I would see £425 per year.
Wherever these numbers are being plucked by the papers they're wrong.
Whoever reckoned you'd get £4k per year for short service is also wrong.
Needless to say I felt so valued I walked out the door.
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Re: Did I hear right - Civil Service pensions?

Quote from: okrzynska
Wherever these numbers are being plucked by the papers they're wrong.

Journalists. Inevitable.  Lips are sealed
They also mix up the many "varieties" of pension scheme out there in public-sector land and combine "features" to support whatever argument they want to take.
For example, I've seen no statements pointing out that the "old-school" Civil Service pensions were accrued at the rate of one-eightieth per annum.
Most private final salary schemes and newer public sector ones (with different contributions) typically work on sixtieths or better.
So, someone retiring at 65 say in a newer scheme will probably have at least 50% more pension than someone retiring at 60 in the old one, all other things (salary, grade etc.) being equal.
pierre_pierre
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Re: Did I hear right - Civil Service pensions?

can you still get final salery pensions?, admitted I have one, but my employer ditched those in the early 90's
itsme
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Re: Did I hear right - Civil Service pensions?

Quote from: okrzynska
I used to be in the civil service. When they did my pension forcast, based on another 40 years of service I would see £425 per year.

and would you go on strike to protect that. I would say the answer is No so I'm assuming for employees to go on strike the pension is significant which allow them to retire several years before they can draw a state pension.
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Re: Did I hear right - Civil Service pensions?

Quote from: itsme
allow them to retire several years before they can draw a state pension.

Historically I guess that was inevitable, but that's why it's all being equalised over time.
And don't forget actuarial reductions for taking pensions early - they can be very large.
Most of my pension entitlement was accrued in private schemes - some final salary, some private pension.
I had only 2 years working in the public sector.
Interestingly every single scheme was built around around retirement at 60, giving a 5-year gap to the start of my state pension. Though many of my friends were/are in schemes that defined 65 as the normal retirement age (a fading concept anyway).
The public-sector one had an interesting feature in that you could elect to draw a pension that had a "step" (down) in it at age 65, i.e. larger before 65 and smaller later in order to cover that gap before drawing State Pension. Though with only 2 years service it wasn't hugely useful to me!
I haven't seen that anywhere else and don't know how common that option is.
(it doesn't cost the fund anything as the actuaries just work out a neutral balance)
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Re: Did I hear right - Civil Service pensions?

Quote from: HPsauce
Historically I guess that was inevitable, but that's why it's all being equalised over time.
And don't forget actuarial reductions for taking pensions early - they can be very large.

What are the main reasons for the strike I thought it was these in order.
1 The raising of the age that they can draw the pension, up from 58/60 to 66.
2. The increase in personal contributions
3. The pension received. Final salary to average salary.
So the public sector still want to retire several years before other employees paid by the tax payer.