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General Chat Thread, Ignorant and the pension thingy...me in General; OK I'll admit it I have no idea whet everyones complaining about. I've been working for county since 2005 and ...
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    chazzy2501's Avatar
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    Ignorant and the pension thingy...me

    OK I'll admit it I have no idea whet everyones complaining about. I've been working for county since 2005 and have been paying into my pension scheme dutifully. I'll further admit that I don't know what what I was going to get paid, everyone told me it was worth getting so I checked the box. I've never been in a pension scheme before and never read any stuff. Whats changed so much to peeve everyone off? How does it affect me?

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    TechMonkey's Avatar
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    I have to admit to not being terribly clued up on this as well but from what I gather they are trying to increase the amount we put in, change the retirement age and change the pension plan from a final year pension (what you get each month is based on the last year or final 3 years) to an average of your working life. The final one seems to be a real bad one as if you take any time out it greatly effects your pension, so women in particular will be hit if they have children.

    Add to that the argument from Guv & general public that our pension is "cushy" where as private sector isn't, even though it has always been we accept fairly rubbish pay with the prospect of a decent pension at the end. My thoughts on this are that if we are going to start falling in line with the private sector on things like pensions, working practices and hours then we should also start falling in line with pay and bonuses. But ha ha ha that's not very likely.

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    teejay's Avatar
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    Basically, your pension contributions are set to increase, although local government pensions are in negotiation so it may not happen. There are also plans to base your pension on your average earnings, rather than final salary. So basically, you'll probably be paying more in and get a smaller annual pension. Oh, you'll also not receive your pension until you're 68.
    The problem is that as people live longer and the retired population increases, we don't have the money in the puplic pensions to sustain the current pension levels, so somethings got to give. It's a problem that should've been sorted out years ago, but the previous two governments (see, not just blaming it on Gordo) buried their heads in the sand, took money out of the pensions through extra taxes, allowed local authorities etc to take contribution holidays so they hadn't been paying their share into the schemes and generally messed up everyones pensions

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    TechMonkey's Avatar
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    Quote Originally Posted by teejay View Post
    we don't have the money in the puplic pensions to sustain the current pension levels, so somethings got to give.
    Some people have issues with this. I can't find the article but I was reading a few economic commentators saying that all there is a peak at the moment, this will level out soon as long as the government don't do anything silly & stop hiring people on ridiculously high salaries at the top end.

    It's a problem that should've been sorted out years ago, but the previous two governments (see, not just blaming it on Gordo) buried their heads in the sand, took money out of the pensions through extra taxes, allowed local authorities etc to take contribution holidays so they hadn't been paying their share into the schemes and generally messed up everyones pensions
    I tak issue with this as well. The MP's pension is safe and sound :P

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    The difference between the new system and the old is considerably smaller for support staff than for teaching staff. If you earn less than 15k there is no contribution increase and if you earn between 15-18k it's only 1.5%. Over 18k and it's 3%, same as teachers. We already receive our pensions at the state pension age I think? or as least much closer to it than the teacher pensions. We still end up with a far better pension than the private sector (and it's guaranteed unlike private where your pension holder can go bust in the next x years) so I don't see what all the complaining is about. I wonder what percentage of people in unison would actually have to pay the full contribution increase and if they would get enough votes to strike.

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    chazzy2501's Avatar
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    Is there a good alternative to paying into a pension? I'm sure people have already thought of this but what if I use my 120 per month to pay off my mortgage instead. I'd surley pay off more interest than I could gain in the pension scheme?

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    teejay's Avatar
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    Quote Originally Posted by TechMonkey View Post
    Some people have issues with this. I can't find the article but I was reading a few economic commentators saying that all there is a peak at the moment, this will level out soon as long as the government don't do anything silly & stop hiring people on ridiculously high salaries at the top end.


    I tak issue with this as well. The MP's pension is safe and sound :P
    You'll find a few economic commentators saying the moon is made of cheese if it means they keep getting paid, which is usually from politically motivated sources.
    The MP's are having their pensions reviewed, probably still be more gold plated than anything we stand a chance of getting though

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    teejay's Avatar
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    Quote Originally Posted by chazzy2501 View Post
    Is there a good alternative to paying into a pension? I'm sure people have already thought of this but what if I use my 120 per month to pay off my mortgage instead. I'd surley pay off more interest than I could gain in the pension scheme?
    The pension scheme is the best option, work out how big a pot of money you will need to acrue to get yourself a pension you can live on for say 20 years. You have to remember your employer contributes to your pension as well as the contributions you make. If you don't take the pension, then that contribution is lost, you don't get it in pay instead.

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    Your current scheme you pay say 120 in and your employer stumps up 240, or was meant to.

    Also 3% increase is quite alot when we have had no payrise for 2 years.

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    Quote Originally Posted by TechMonkey View Post
    I have to admit to not being terribly clued up on this as well but from what I gather they are trying to increase the amount we put in, change the retirement age and change the pension plan from a final year pension (what you get each month is based on the last year or final 3 years) to an average of your working life. The final one seems to be a real bad one as if you take any time out it greatly effects your pension, so women in particular will be hit if they have children.

    Add to that the argument from Guv & general public that our pension is "cushy" where as private sector isn't, even though it has always been we accept fairly rubbish pay with the prospect of a decent pension at the end. My thoughts on this are that if we are going to start falling in line with the private sector on things like pensions, working practices and hours then we should also start falling in line with pay and bonuses. But ha ha ha that's not very likely.
    Average public sector pay is now 10% higher than average private sector pay. Bonuses are unheard of for 95% of the private sector.

    You may not want to rush to 'fall in to line' with the private sector.

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    Quote Originally Posted by chazzy2501 View Post
    Is there a good alternative to paying into a pension? I'm sure people have already thought of this but what if I use my 120 per month to pay off my mortgage instead. I'd surley pay off more interest than I could gain in the pension scheme?
    If you work for the state and get a public sector pension, there is no better long-term investment. Even with the changes being made you're still better off than almost anyone in the private sector.

    Very useful article in the Telegraph:

    What is a public sector pension worth? - Telegraph

    To get a pension paying out 5,928 a year (the average for the civil service, apparently) in the private sector you'd need to have accumulated a pension pot of 189,151. So the average private sector worker would have to be putting away 200 a month (assuming employer contributions of the same). The average private sector salary is 450 a month, so the worker would have to be putting away 40% of his salary for 40 years to match the public sector equivalent.

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    Quote Originally Posted by teejay View Post
    The problem is that as people live longer and the retired population increases, we don't have the money in the puplic pensions to sustain the current pension levels, so somethings got to give. It's a problem that should've been sorted out years ago, but the previous two governments (see, not just blaming it on Gordo) buried their heads in the sand, took money out of the pensions through extra taxes, allowed local authorities etc to take contribution holidays so they hadn't been paying their share into the schemes and generally messed up everyones pensions
    The flaw I see in this argument is that it discounts productivity increases, i.e. that more "wealth" is created per working hour, so even if we retire for longer we should be able to maintain the system. We've seen productivity increases in the last few decades that far outstrip population growth (specifically in Western Europe) even accounting for immigration, and so the question to ask is where has that "extra" generated wealth gone? It certainly hasn't gone into pensions. I suppose the kneejerk reaction for tabloids is to say that all our hard work is being frittered away on teenage mums and asylum seekers. I don't think that's true when you look at society through any particular lens. In our every day work we see management of education and social services hire in consultants to tell them to cut staff (10% in Southampton), while they "incentivise" management's pay and pensions to attract "the best and brightest".

    I don't think this is a Malthusian problem, a natural bell curve of pension viability and we are just going over the brow. I think it's just the same old bluff for the elites to get their hands on whatever they can, while they blame us for the audacity of wanting to live with security and dignity.

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    Lets not ignore the fact that now councils employ private companies to do low paid jobs like cleaning etc, taking the lower paid jobs from the public sector and putting them into the private sector. Even dinnerladies are outsourced nowadays. These all drag down the average salaries in the private sector while increasing that in the public sector.

    There are facts on both sides, but the truth of the matter is even with the pension changes it is still currently worth staying in the scheme and hopefully getting the pension at the end. Now whther in 30 years time there will actually be a pension left, or even a world left who knows.

    We shouldnt also ignore that local government pension schemes are not definitely affected yet because the majority of these are running in a surplus currently, and are seperate funding, unlike civil servants where there is no pot of money set aside already.

    The figures used for salaries also needs to be sorted out on both sides. Politicians and union leaders especially compared average salaries all the time, but never mention that being paid 450 a month, would be illegal if you were full time (due to minimum wage laws), so having 10 people part time, takes your average salary down and makes better reading for the government.

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    The thing with pensions I don't like... if I pay into the scheme for 5 years then leave and work out of public sector that money is tied in until retirement age. It won't be enough to be useful but could be enough to help pay for something important in the meantime. Plus on a more morbid note you're not guaranteed to get to the age to cash it in

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    Quote Originally Posted by Achandler View Post
    Lets not ignore the fact that now councils employ private companies to do low paid jobs like cleaning etc, taking the lower paid jobs from the public sector and putting them into the private sector. Even dinnerladies are outsourced nowadays. These all drag down the average salaries in the private sector while increasing that in the public sector.
    In Social Services in Bournemouth, they sacked a majority of the cleaning staff. Management came up with the ace solution that social workers should be emptying their own bins and cleaning their own kitchens. It's that kind of forward thinking that can only be attracted by competitive pay and pensions for the executives.

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