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New Public Sector Pensions Offer

edited December 2011 in Not Sports Related
This is not a bash the Public Sector piece but the facts on what Unions have so far been arguing about and what was essentially being negotiated when the strikes took place, and what is likley now to be agreed.

For Civil Servants - After 40 years a pension of 90% of their average career pay allowing for inflation based on the Consumer Prices Index. .
For the NHS - After 40 years a pension of 74% of their average career pay allowing for inflation based on the Consumer Prices Index plus 1.5%.
For teachers - After 40 years service a pension of 70% of their average career pay allowing for inflation based on the Consumer Prices Index plus 1.6%.
Local Governement terms still being dicussed will be similar, but no increase in contributions will apply.

The current terms where better will apply to service already completed.  Employees shortly to retire will be fully protected against any worsening of starting pension.

This needs to be seen in the context of the traditional gold plated public sector pension of 66% of final salary at age 60.

Many will not or cannot work for 40 years of course, and the % will be lower.

Retirement age will increase in lione with State retirement age, with each year of deferrnent earning additional pension.

Contributions will increase at various rates agreed for each scheme, averaging 3.2% spread over three years and with easements for lower paid.  Currently Civil Servants pay between 1.5% and 3.5% of pay.

There is no point in criticising Public Sector workers for what they have, feelings have already been well aired, I would just like to understand why a strike was necessary to secure what was largely already on the table.  It looks to me like Unions using public sector employees to advance their wider agenda. Were Public Sector employees shown anything positive about the proposed arrangements?  I really would like to know from any directly involved.
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Comments

  • Well I don't know where you got your figures from but the only one I have checked is wildly wrong.  Civil Servants don't get anything like 90% of their average career pay.  Most civil servants will get 1/80th of their salary for every year of reckonable service, so a career civil servant with 40 years service can expect half of their salary.  Of course, most will get far less than that.  
  • Just had my annual "gold plated" Local Government pension statement. Nearing 27 years pensionable service. I get 1/80th for the first 23 years then 1/60th for the rest.
  • Well I don't know where you got your figures from but the only one I have checked is wildly wrong.  Civil Servants don't get anything like 90% of their average career pay.  Most civil servants will get 1/80th of their salary for every year of reckonable service, so a career civil servant with 40 years service can expect half of their salary.  Of course, most will get far less than that.  
    A new scheme was introduced in 2002 or 2003 where you could opt to have 1/60th per years service (but no lump sum) so with 40 years service you could get 66% of salary. But of course as it was only introduced 8 years ago that will now be impossible.  
  • Nevermind the details but I wish people would get away from the idea that Unions use their members to do one thing or another. Unions are their members and they do noting without their guidance. A union can not even begin to contemplate a strike without members voting for one. Even the very fact of being able to vote has to be instructed by the members.

    What possible agenda can a union has which is 'its own' and not its memebrs?

  • simply to try and justify their fat pay packets, they have to be seen to do something
  • DRF - I didn't think that 'wider agenda' comment was worth commenting on. As you have pointed out, it was nonsense.

    I think that PCS has been sold down the river by the other Public Sector unions. It strikes me that very little ground has been given by the Government and they have kowtowed.   

  • Just had my annual "gold plated" Local Government pension statement. Nearing 27 years pensionable service. I get 1/80th for the first 23 years then 1/60th for the rest.
    They don't provide a lump sum anymore?
  • edited December 2011
    Nope, the lump sums were removed from the Local Govt pension scheme in the reforms 4 years ago, when they changed the accrual rates.
  • edited December 2011
    Just had my annual "gold plated" Local Government pension statement. Nearing 27 years pensionable service. I get 1/80th for the first 23 years then 1/60th for the rest.


    So you are at 45% and counting if my mental arithmetic is correct.

    Scrub that! 35 and a bit% and counting!

  • DRF - I didn't think that 'wider agenda' comment was worth commenting on. As you have pointed out, it was nonsense.

    I think that PCS has been sold down the river by the other Public Sector unions. It strikes me that very little ground has been given by the Government and they have kowtowed.   

    Spot on.
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  • Jesus  "unions have no agenda"  FFS   really ?
  • Just had my annual "gold plated" Local Government pension statement. Nearing 27 years pensionable service. I get 1/80th for the first 23 years then 1/60th for the rest.


    So you are at 45% and counting if my mental arithmetic is correct.

    Scrub that! 35 and a bit% and counting!

    Have no idea, all I know is that the Mrs looked at my death in service benefit and had an evil glint in her eyes!
  • If she buys you a canoe for Christmas, it's time to worry Dave.
  • Stig the 1/80ths is the old final salary deal with a 25% salary lump sum on top which is equivalent to 1/60th of final salary i.e 66% fanal salary after 40 years.
    If you were striking it was against the new AVERAGE SALARY scheme. For Civil Servants its 1/44th of average career salary i.e 90.9% for 40 years.
    Just proved my point that the Public Sector didn't know what they were striking over.
    Copied from the press release:-
    The new offer features changes to accrual rates - the rate at which a pension builds up - and how the existing pot is revalued while an employee is still working, to guard against inflation. The terms include:

    In the civil service, the accrual rate will be 1/44th of salary, revalued each year in line with the consumer prices index (CPI).
    In the local government scheme, where negotiations have different parameters, the pension age will be linked to the state pension age but a new career average scheme will be introduced in 2014 - a year earlier than the others - and there will be no increases in employee contributions for all, or the vast majority, of members
    In the NHS, the accrual rate will be 1/54th of salary each year, revalued in line with CPI plus 1.5%.
    In the teachers' pension scheme, the accrual rate will be 1/57th of salary each year, revalued in line with CPI plus 1.6% each year.
  • DRF - I didn't think that 'wider agenda' comment was worth commenting on. As you have pointed out, it was nonsense.

    I think that PCS has been sold down the river by the other Public Sector unions. It strikes me that very little ground has been given by the Government and they have kowtowed.   

    Spot on.
    Too right.

    And, of course, the divide and rule tactic will be "most of the Unions have accepted, PCS are wrong to hold out".  The fact is that PCS represent more civil servants than most of the other civil service unions put toghether 
  • edited December 2011


    This needs to be seen in the context of the traditional gold plated public sector pension of 66% of final salary at age 60.




    Not sure your figures are right.

    Anyway, do you mean 'gold plated public sector pension', in the way that people use 'gold plated private sector salaries'?

  • edited December 2011
     

  • Dippenhall in Having A Go At Public Sector Pensions Scheme Shock!

    At least try posting about football or a would ya once in a while before coming on here stirring this all up again a few days before Christmas. Negotiations are still ongoing, why not wait, until after before coming on to push your own agenda again???

    Merry Christmas btw!
  • I can see why the members of the pension scheme would be against average salary when it is currently based on final salary. Not only is your final salary greater due to inflation, but it means that you can contribute to the pension scheme on a low (starting) salary and retire at the top of your profession and take the pension based on the final year's salary when you have 40 years of promotions - many of which seem to be guaranteed in the public sector.
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  • Dippenhall in Having A Go At Public Sector Pensions Scheme Shock!

    At least try posting about football or a would ya once in a while before coming on here stirring this all up again a few days before Christmas. Negotiations are still ongoing, why not wait, until after before coming on to push your own agenda again???

    Merry Christmas btw!
    I leave the football comments to those who know what they are talking about. I don't have an excuse or agenda for the post apart from being a pensions bore.  I thought stirring it was how things worked on here!
    Merry Christmas
  • Stig the 1/80ths is the old final salary deal with a 25% salary lump sum on top which is equivalent to 1/60th of final salary i.e 66% fanal salary after 40 years. If you were striking it was against the new AVERAGE SALARY scheme. For Civil Servants its 1/44th of average career salary i.e 90.9% for 40 years. Just proved my point that the Public Sector didn't know what they were striking over. Copied from the press release:- The new offer features changes to accrual rates - the rate at which a pension builds up - and how the existing pot is revalued while an employee is still working, to guard against inflation. The terms include: In the civil service, the accrual rate will be 1/44th of salary, revalued each year in line with the consumer prices index (CPI). In the local government scheme, where negotiations have different parameters, the pension age will be linked to the state pension age but a new career average scheme will be introduced in 2014 - a year earlier than the others - and there will be no increases in employee contributions for all, or the vast majority, of members In the NHS, the accrual rate will be 1/54th of salary each year, revalued in line with CPI plus 1.5%. In the teachers' pension scheme, the accrual rate will be 1/57th of salary each year, revalued in line with CPI plus 1.6% each year.
    Dippenhall, at the time of the strike the accrual rate on offer was 1/65th, so worse than the 1/60th of the current scheme. Given that the accrual rates that have been reported as agreed are an improvement on this, and the Government are committing not to mess about with the scheme for a significant period of time (although I'll believe THAT when I see it). So obviously going on strike has achieved a better deal.
  • I will state again - if you are a public sector worker and don't like the new terms offered then leave the scheme & pay your contributions into a private pension instead. No one is forcing you to accept the new terms. You are not legaly obliged to join or stay in the pension scheme.

     

     

     

     

  • Aliwil if you believe the Unions acheived a 17% increase in the pension on offer as a result of the strike and we didn't hear about it then dream on.  By comparing accrual rates under the current scheme to accrual rates under the new scheme, which are not directly comparable, it shows again how easy it is to be hoodwinked over pensions. Spurious comparisons like this are the meat and drink of the public sector pensions debate, the facts just get in the way of holding entrenched views. 
  • But Dippenhall, if those improved accrual rates were on the table prior to the strike, why didn't the Government publicise them? At the start of November they announced some changes to the proposals in order to try to head off the strike (including the change in accrual rate I mentioned above) - if the strike was as damaging to the British economy as they claim, surely it would have been in everyone's interest to announce the improved offer BEFORE the strike went ahead? Unless of course they couldn't because it didn't exist at that point...

    See the article below for details.
    http://www.bbc.co.uk/news/business-15551702
  • Aliwil if you believe the Unions acheived a 17% increase in the pension on offer as a result of the strike and we didn't hear about it then dream on.  By comparing accrual rates under the current scheme to accrual rates under the new scheme, which are not directly comparable, it shows again how easy it is to be hoodwinked over pensions. Spurious comparisons like this are the meat and drink of the public sector pensions debate, the facts just get in the way of holding entrenched views. 




    Entrenched views huh? Like when you say public sector pensions are 'gold plated' (see your opening post), would you describe that viewpoint as a 'fact'?

    Perhaps people who resent public sector workers getting a decent pension have been 'hoodwinked' by anti public sector workers propaganda.

  • Don't confuse viewpoints with facts.  My viewpoint is that Public Sector pensions are a fantastic employee benefit and still will be after the dust has settled, but the taxpayer bears an unreasoable proportion of the cost.  The fact is there is no risk of employer default and no worry about not having enough money to pay for what is promised which is why they are often described as "gold plated".  It's a description of quality and wasn't intended to be an offensive term.  Anyway I was referring to the original Civil Service scheme as "gold plated", I'll re-phrase so as not to offend and call it quite good.
    My other viewpoint is that Public Sector workers went on strike with little knowledge of the facts, just a vague idea they were being robbed because that is what they were told.  I haven't heard anything that changes my viewpoint, the facts speak for themsleves and are not a viewpoint.  What I resent is unnecessarily holding the country to ransom and calling a strike on false pretences.  Wouldn't disagree that the anti-public sector propoganda is just as misinformed, and too much emotion has been invested on all sides.
    Going away for Xmas now to spend my plastic plated pension.
  • @Dippenhall

    You say there is no risk of not getting paid what is promised ! What on earth do you think this dispute is actually about. The fact here is that the government want to change what was promised. That is the fact.
  • edited December 2011
    Don't confuse viewpoints with facts.  My viewpoint is that Public Sector pensions are a fantastic employee benefit and still will be after the dust has settled, but the taxpayer bears an unreasoable proportion of the cost.  The fact is there is no risk of employer default and no worry about not having enough money to pay for what is promised which is why they are often described as "gold plated".  It's a description of quality and wasn't intended to be an offensive term.  Anyway I was referring to the original Civil Service scheme as "gold plated", I'll re-phrase so as not to offend and call it quite good.
    My other viewpoint is that Public Sector workers went on strike with little knowledge of the facts, just a vague idea they were being robbed because that is what they were told.  I haven't heard anything that changes my viewpoint, the facts speak for themsleves and are not a viewpoint.  What I resent is unnecessarily holding the country to ransom and calling a strike on false pretences.  Wouldn't disagree that the anti-public sector propoganda is just as misinformed, and too much emotion has been invested on all sides.
    Going away for Xmas now to spend my plastic plated pension.



    The use of your word 'unreasonable' above...is that a 'fact'?
    No, you say it is your viewpoint. I disagree with you however, because the services we get from the public sector are very cheap compared with the private sector. Earlier (on another thread) I compared the cost of private childminding/childcare with schooling, and concluded that state schooling is a bargain.

    Lewisham Council took away an old bed, matress, sofa and armchair for me at a cost of about £14 (plus vat) within an hour of calling them. I guess that getting that done privately would have been much more, with the possibility of the items being fly-tipped as well!

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