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New recruits should and I think in many cases do.
However in the case of many long standing employees it is more difficult
Part of the compensation - as we know public sector workers mostly get paid less than the private sector and this is part of the compensation.
Changing this for many could well be illegeal.
However in the case of many long standing employees it is more difficult
Part of the compensation - as we know public sector workers mostly get paid less than the private sector and this is part of the compensation.
Changing this for many could well be illegeal.
Of course we shouldn't, most private companies have now moved off final salary pension schemes to money purchase schemes.
I read about one council leader who left their job a week or so back, and the council put £250,000 into their pension pot as a one off payment.
This person was going to get a £60,000 a year pension.
I worked for one company for 30 years and even though both they and I put money on my pension my TOTAL pot was only just over £200,000.
Luckily I was on a final salary pension (private company not council) and I am lucky enough to have a £24,000 a year pension (just taken early retirement).
I read about one council leader who left their job a week or so back, and the council put £250,000 into their pension pot as a one off payment.
This person was going to get a £60,000 a year pension.
I worked for one company for 30 years and even though both they and I put money on my pension my TOTAL pot was only just over £200,000.
Luckily I was on a final salary pension (private company not council) and I am lucky enough to have a £24,000 a year pension (just taken early retirement).
>Changing this for many could well be illegeal.
The company I worked for (IBM) had a very generous final salary pension scheme, though they stopped it for new employees about 10 years ago.
But they announced a year or so back they were going to withdraw it for EXISTING employees in April 2010 (this month).
You had the choice to LEAVE IBM but keep your pension, or stay at IBM and have your pension moved to a money purchase scheme.
Many people at IBM in their late 40s or early to mid 50s had a difficult choice to make and many of my ex colleagues have been leaving to ensure they keep their pension.
If IBM can do it then council and goverment departments can do it (at least on a gradual basis). Mind you I am sure the unions will have something to say about it.
http://www.guardian.c...s-final-salary-scheme
.
The company I worked for (IBM) had a very generous final salary pension scheme, though they stopped it for new employees about 10 years ago.
But they announced a year or so back they were going to withdraw it for EXISTING employees in April 2010 (this month).
You had the choice to LEAVE IBM but keep your pension, or stay at IBM and have your pension moved to a money purchase scheme.
Many people at IBM in their late 40s or early to mid 50s had a difficult choice to make and many of my ex colleagues have been leaving to ensure they keep their pension.
If IBM can do it then council and goverment departments can do it (at least on a gradual basis). Mind you I am sure the unions will have something to say about it.
http://www.guardian.c...s-final-salary-scheme
.
Right because private industries and public sector are exactly the same aren't they?!
Contractual arrangements between pension schemes will vary and what may be legal or practical in one will not be the case in others.
The idea that if IBM can do it so can the Government is very wooly thinking
For a start, try the same trick and you'll suddenly have all senior civil servants leave which would pretty much paralyse government.
Contractual arrangements between pension schemes will vary and what may be legal or practical in one will not be the case in others.
The idea that if IBM can do it so can the Government is very wooly thinking
For a start, try the same trick and you'll suddenly have all senior civil servants leave which would pretty much paralyse government.
The main issue here is the way the schemes are financed and managed (or more correctly not managed).
Public sector pensions are not financed in the same way as those in the private sector have to be. In the private sector the employee and the employer both contribute to a fund which is managed and regularly valued (every three years minimum) and the liabilities and assets compared. The excess of one over the other is a measure of the scheme’s excess or deficit. I have concerns with the some of the methodology used for these valuations but that is not an issue here. Sufficient to say that the valuation results can be used to make adjustments to the scheme.
The problem with public sector pension schemes is that although employees make an actual contribution which is deducted from their pay, the employers’ contribution, although shown on paper, is not “banked” and managed. It (along with the employees’ contributions) disappears into a pot and the benefits the pensioners receive are paid from general taxation. This is similar to the State pension scheme where contributions made in the form of National Insurance are not banked but used to pay current pensioners.
It is rather like a glorified “Ponzi” scheme with the entire liability of the pension scheme being unmatched by any assets. The “Black Hole” thus formed is enormous, far exceeding (per head) any in the private sector where accounting has to be more rigorous and changes made to adapt to developments in longevity and the money market.
This problem forms part of the general malaise in public sector finances and will not be cured unless the whole issue of that financial management of taxpayers’ money is addressed. However, we should not blame the members of those funds. They signed up to a schemes in good faith and it is hardly their fault that the schemes are mismanaged.
Public sector pensions are not financed in the same way as those in the private sector have to be. In the private sector the employee and the employer both contribute to a fund which is managed and regularly valued (every three years minimum) and the liabilities and assets compared. The excess of one over the other is a measure of the scheme’s excess or deficit. I have concerns with the some of the methodology used for these valuations but that is not an issue here. Sufficient to say that the valuation results can be used to make adjustments to the scheme.
The problem with public sector pension schemes is that although employees make an actual contribution which is deducted from their pay, the employers’ contribution, although shown on paper, is not “banked” and managed. It (along with the employees’ contributions) disappears into a pot and the benefits the pensioners receive are paid from general taxation. This is similar to the State pension scheme where contributions made in the form of National Insurance are not banked but used to pay current pensioners.
It is rather like a glorified “Ponzi” scheme with the entire liability of the pension scheme being unmatched by any assets. The “Black Hole” thus formed is enormous, far exceeding (per head) any in the private sector where accounting has to be more rigorous and changes made to adapt to developments in longevity and the money market.
This problem forms part of the general malaise in public sector finances and will not be cured unless the whole issue of that financial management of taxpayers’ money is addressed. However, we should not blame the members of those funds. They signed up to a schemes in good faith and it is hardly their fault that the schemes are mismanaged.
I work for the IT department of a Local Government and trust me everything that we have been going through in recent years has left us financially worse off and with completely different contracts of employment to the contracts we originally signed.
We had a (Pensionable) Functional Market Premium for IT workers which was supposed to bring us close to the salaries in the 'Real World' but fell woefully short. That was then removed and replaced by a much, much, smaller (not Pensionable) Recruitment & Retention payment which can be taken away at any time. Our pensions have since been changed so although still Final Salary it is at a much reduced proportion of our final salary.
The chances are that our jobs will go round about April next year when we move into a partnership (outsourced) which is back-end weighted. That means for the next couple of years it will be cheaper and get the Council through the current round of budget cuts, with a reduced service, but over the ten years of the contract will cost a minimum of 60% more, which the tax payer will have to pay for.
Things are not, and NEVER have been, rosy for the normal council worker.
We had a (Pensionable) Functional Market Premium for IT workers which was supposed to bring us close to the salaries in the 'Real World' but fell woefully short. That was then removed and replaced by a much, much, smaller (not Pensionable) Recruitment & Retention payment which can be taken away at any time. Our pensions have since been changed so although still Final Salary it is at a much reduced proportion of our final salary.
The chances are that our jobs will go round about April next year when we move into a partnership (outsourced) which is back-end weighted. That means for the next couple of years it will be cheaper and get the Council through the current round of budget cuts, with a reduced service, but over the ten years of the contract will cost a minimum of 60% more, which the tax payer will have to pay for.
Things are not, and NEVER have been, rosy for the normal council worker.
>For a start, try the same trick and you'll suddenly have all senior civil servants leave >which would pretty much paralyse government.
I did say
> at least on a gradual basis
Lets face it SOMETHING has to be done, we as a country cant keep funding these huge pensions for MPs and council and government workers.
I did say
> at least on a gradual basis
Lets face it SOMETHING has to be done, we as a country cant keep funding these huge pensions for MPs and council and government workers.
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