Pension Changes

[pickledseal]

Millions of workers in the public sector should work longer for lower pensions, a major report has said.

Lord Hutton's independent review said linking their pensions to career average earnings, rather than final salaries, would make them "affordable".

The government has already accepted a previous recommendation of Lord Hutton that public servants should soon pay higher contributions.

Unions have condemned the latest plans and will consider strike action.

Dave Prentis, general secretary of the Unison union, said: "This will be just one more attack on innocent public sector workers who are being expected to pay the price of the deficit, while the bankers who caused it continue to enjoy bumper pay and bonuses."

http://www.bbc.co.uk/news/business-12687489

I started teaching at 22. I'll die before I can retire.

 

[WightShrimper]

That's the plan. I blame myself for sponging of society for the past 30 odd years that i've worked!

 

[MK Shrimper]

I wonder if Lord Hutton will die before he retires.

 

[canveyshrimper]

Firstly what's wrong with the public sector making a higher contribution to their pension? Many pensions in the public sector are non contributory, index linked and based on their final salary.

It's a wind of change that's been coming for a long while, ever since Brown's wholesale destruction of the finest private pension industry in the world in fact. Hutton was originally asked to report on public sector pensions under Labour, but as ever they bottled / fudged the issue. I understand the pain that many will feel, Brown has destroyed my pension and many others of my age group.

 

[Pubey]

Lord Hutton is a WHSB alumni and he presented me with a school prize

 

[RobM]

To maintain my accrual rate, my contribution will increase from 3% of pensionable salary to 8%. And that's in the private sector. So why public sector be exempt from changes?

 

[Neil_F]

defined benefit pension schemes have been withdrawn by virtually every private sector employer in the country for new joiners, closed to accrual for the majority and completely closed for a significant number. I went in to employment with only the prospect of a defined contribution scheme (which took a beating in 2008) as well as the huge loan I had to pay back as a result of tuition fees.

Future graduates will have £25k of debt, no prospect of a defined benefit pension and a retirement age of 68 when they start working (likely to rise above 70). Why should they pay taxes to subsidise current public sector workers' generous pension arrangements?

Out in the real world, if we aren't happy with our terms and conditions we look for alternative employment. Why should it be any different for the public sector?

 

[WightShrimper]

Lord Hutton is a WHSB alumni and he presented me with a school prize

Don't expect to keep it in old age though.

 

[Neil_F]

Lord Hutton is a WHSB alumni and he presented me with a school prize

What prize did you get?

 

[Pubey]

What prize did you get?

some music one:hilarious:

 

[pickledseal]

I just feel the frontline services that were promised to be protected, are quite simply not.

It will be interesting to see how NHS/teachers/armed forces/emergency services cope with all their already pretty difficult conditions of work, plus having to work for longer, for less money (increased contributions and pay freezes), with less resources (our budget is looking like it will be cut by £250k+ for next year)...

I can understand why it is necessary but it just seems to be a battering from every single angle. I get reasonably well paid for my job, but I do put in the hours and decide to do it well (my choice). However when I look at salaries of some NHS staff/armed forces etc they are not well enough paid and this, I think, will ultimately lead to a decrease in vital services.

A country with a demoralised, under funded staff of nurses, teachers, police, fireman, soldiers etc is not a great country at all!

 

[Firestorm]

Out in the real world, if we aren't happy with our terms and conditions we look for alternative employment. Why should it be any different for the public sector?

A lot of the public sector jobs are not transferable to the private sector, and by the very nature of a public sector job the T&C tend not to be dependent on who your employer is.

 

[pickledseal]

Out in the real world, if we aren't happy with our terms and conditions we look for alternative employment. Why should it be any different for the public sector?

A lot of the public sector jobs are not transferable to the private sector, and by the very nature of a public sector job the T&C tend not to be dependent on who your employer is.

Totally agree Firestorm.

Even if you can go work in a private hospital or school etc it's not going to help society. My T&C are the same wherever I work pretty much, and I can do nothing to change that, bar leave my profession.

 

[Neil_F]

Welcome to the club! Those of us in the private sector have been through pay cuts, redundancies and additional workloads. A lot of us have had to put in a lot more hours for less money just to keep our jobs.

The comment I find interesting is that you choose to put in the hours and do your job well (good for you for doing so). By implication, you think that there are people that choose not to put in the hours and not to do their job well. Such people would be sacked in the private sector. This is the difference: the public sector has limited accountability with near absolute job protection. On that basis public sector employees are vastly overpaid.

I can understand that you aren't happy about it, but I'm not happy at having to pay for public sector pensions that are considerably more generous than my own. As I said in my first post, if you aren't happy with your terms and conditions then get another job.

 

[Neil_F]

A lot of the public sector jobs are not transferable to the private sector, and by the very nature of a public sector job the T&C tend not to be dependent on who your employer is.

And this is the point. Economic theory determines that the value of a person's labour is determined by the amount which someone else would be prepared to pay for it. In other words, the market rate. Where someone doesn't have any skills that someone would be prepared to pay for then they are at the mercy of their existing employer. If that employer chooses to pay more than the anyone else would pay for the same unit of labour, then that individual is overpaid.

 

[MK Shrimper]

I can understand that you aren't happy about it, but I'm not happy at having to pay for public sector pensions that are considerably more generous than my own. As I said in my first post, if you aren't happy with your terms and conditions then get another job.

And this is where capitalism doesn't really work. A country needs teachers, nurses, social carers....and many other jobs that the state should provide for all of us. If every teacher or every nurse decided to jump ship and become a Hedge Fund Manager or an Investment Banker, this country would be in a ****(ter) state. These people should be valued, not treating like a second class citizen because they haven't got a "portfolio" and didn't invest with the smart money.

 

[Neil_F]

Personally I think those in financial services are grossly overpaid for exactly the same reasons. There is a self-perpetuating notion that they have to pay huge amounts to attract the best talent. Let's assume for a moment that the best people do go into financial services (a big assumption), would the outcome be any different if the second tier of labour ran the show for a lot less money? Given that financial services don't make a profit in the long-term I'd suggest not.

Demand for services is an interesting consideration. There clearly is demand and it is sustainable and so labour will be required. If nurses were compensated so little that they all left and did something else then that is a sign that they are underpaid in market terms. Seeking to determine remuneration levels outside of the market would be a challenge. How would you do it?

As for public sector workers, I don't think they are compensated as second class citizens. In fact, I think the opposite is true because of collective bargaining powers. The pension changes are (relatively speaking) a small correction to retirement provisions that are required such that the risk of under-funding doesn't rest disproprtionately with the taxpayer. It's worth noting at this point that one of the reasons that defined benefit pensions are no longer economically viable is the removal of the dividend tax credit for pension funds by Gordon Brown in 1998. It cost billions and destroyed the funding positions of schemes.

Remuneration levels is something that I find fascinating. I could talk for hours about it but I'll refrain here.

 

[Rudi Luftwaffe]

If every teacher or every nurse decided to jump ship and become a Hedge Fund Manager or an Investment Banker, this country would be in a ****(ter) state.

If every hedge fund manager and investment banker jumped ship into teaching/nursing I suspect we would also be up **** creek.

 

[MK Shrimper]

If every hedge fund manager and investment banker jumped ship into teaching/nursing I suspect we would also be up **** creek.

Probably, but if a nurse or a teacher screws up they generally lose their job, but an industry that nearly brought the western world to a standstill is slapped on the back and given a nice healthy bonus for that second house in Provence and little Tarquin's education at Eton.

 

[DTS]

And this is the point. Economic theory determines that the value of a person's labour is determined by the amount which someone else would be prepared to pay for it. In other words, the market rate. Where someone doesn't have any skills that someone would be prepared to pay for then they are at the mercy of their existing employer. If that employer chooses to pay more than the anyone else would pay for the same unit of labour, then that individual is overpaid.

I am convinced Neil F has mind reading abilities as when it comes to anything in the world he reads my mind everytime.