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Pension Timebomb

Community Veteran
Posts: 18,546
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Registered: 12-08-2007

Pension Timebomb

Public sector pensions have a deficient of £1.12 trillion in payments.  Most of this is unfunded which means we, the taxpayer, will have to foot the bill.  It will need massive tax increases to maintain the present system.  It has to be changed and brought in line with private pensions.
http://www.dailyexpress.co.uk/posts/view/121292/-1-12-trillion-public-sector-pensions-bill-
25 REPLIES
Community Veteran
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Registered: 02-02-2008

Re: Pension Timebomb

I always trust everything I read in the Daily Express.  Grin
(beginning over 40 years ago when a specific barely-newsworthy event that I witnessed first-hand was reported at great length on the front cover of the DE the next day. In a way that bore no resemblance to the facts but totally supported the prejudices of its target audience)
Community Veteran
Posts: 18,546
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Registered: 12-08-2007

Re: Pension Timebomb

Ah, but this was also being discussed on LBC this morning.  Couldn't use anything from their website so used the DE.
itsme
Grafter
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Registered: 07-04-2007

Re: Pension Timebomb

The public sector is about the only one that offer index linked final salary pensions to new employees. Why can they afford it where the private sector can't?
Community Veteran
Posts: 18,546
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Registered: 12-08-2007

Re: Pension Timebomb

They can't afford it.  They are unfunded and rely on taxes to pay the pension.
VileReynard
Seasoned Pro
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Registered: 01-09-2007

Re: Pension Timebomb

And public sector workers aren't taxpayers are they? Crazy

jmd
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Registered: 30-07-2007

Re: Pension Timebomb

Yes, civil servant and public sector workers of all grades do pay tax.
And not all depts now offer new entrants final salary pensions now anyway.
Community Veteran
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Re: Pension Timebomb

Quote from: jmdlp
And not all depts now offer new entrants final salary pensions now anyway.

That's certainly true and is more widespread than the Daily's (Mail & Express for starters) would want you to believe. My other half works in a large Central Government department and some time ago existing staff had to choose which pension scheme they wished to move to.......
New staff get less choice.
Community Veteran
Posts: 1,699
Registered: 30-07-2007

Re: Pension Timebomb

I'm a local government employee.  Yes I've got a final salary scheme (at the moment) which the employers unilaterally changed recently.  I've always paid 6% of my salary into the scheme, and that's just gone up to over 7%.  I've worked for the local government for over 29 years, so that all adds up to quite a bit.
People talk as if we didn't contribute anything, how many people on this forum put 7% of their salary into their pension? 
John
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Re: Pension Timebomb

Quote from: hulls
how many people on this forum put 7% of their salary into their pension? 

I'm drawing mine now, for what they're worth.  Sad
I've always put the maximum I could under the rules applying at the time; fat lot of good it did me in the end.  Cry
That was up to 40% in my later years.
(you can now put 100% of your earned income into your pension at any age)
N/A

Re: Pension Timebomb

Can't remember what percentage of my NHS salary went into superannuation but it was a fair bit and as I bought years back, it was quite a bit of my salary gone.  
Years ago we were allowed to opt out but I didn't, thank goodness. It is a decent pension, but yes, people do pay a lot of their salary into it, and from a very early age. Can't remember exactly but I started paying into it at 16, or more likely 18 years of age when my pay was pathetically small.  
Having said that, I do feel sympathy for those who have paid into private pensions but have not had satisfactory returns.
I can understand their resentment of civil service/local authority and NHS ex-employees' pensions.
Community Veteran
Posts: 1,100
Registered: 05-04-2007

Re: Pension Timebomb

Quote from: hulls
....
People talk as if we didn't contribute anything, how many people on this forum put 7% of their salary into their pension? 
John

Currently I put 7.5% of my salary into my pension. My last pension statement gave approx £1000 loss over the 12 month period and when I retire I am guaranteed absolutely nothing! Oh, and that is the company scheme. Even when the pension was making a profit I could still end up with nothing when I retire. If I had a choice, I would be on a final salary scheme. So to sum up, I pay 7.5%, get guaranteed nothing and have to retire a year later (due to government change in retirement date). Come tho thing of it, why do I have a pension?
Community Veteran
Posts: 1,699
Registered: 30-07-2007

Re: Pension Timebomb

I have no problem with any of those comments, but in my experience, most people who complain about local government pensions pay little or nothing into their own pensions.  Yes I'm guaranteed a percentage of my final salary as a pension, but most people in local government earn less than their counterparts in the private sector, and accept that, because "at least my pension is protected" .
There is little thanks for public service these days, and no longer any job security either.
I heard a government minister on the radio last year (the only time I've ever heard a politician defend the public sector) point out that in terms of retirement age, there is no difference between the public and private sectors.  Yes I could technically retire at 60 (maybe and if I could afford it), but the average is nearer to 65, and as with everywhere else, there's a lot of pressure to work well beyond that.
John
Community Veteran
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Registered: 12-08-2007

Re: Pension Timebomb

I think your comments about public service pay being behind the private sector is a little dated.  At the top there are many chief execs earning in excess of £150K.  Further down the ladder my local authority regularly advertises secretarial jobs at £15k, and is currently wanting an electoral service officer at £20k. They also want a housing assistant at £13.5k and all these jobs are plus London weighting.
If you look at other parts of public service I don't think you can say the Police are badly paid and nor are the NHS.   
N/A

Re: Pension Timebomb

The real problem is not government  v private employees but the fact that pensions shouldn't be a gamble.
It's just not right that people are paying all this money into pensions and not be guaranteed adequate returns.
I feel real sympathy with people in this position.
You might as well not bother and let the government keep you in retirement with pension credit etc.
Either that or invest your money in other things - even under the floorboards could be safer these days!  Huh