Final salary pensions..

[R1Geezer]

Should the public sector still have final salary pensions funded by the tax payer when most of the real world has to make do with money purchase?
http://news.sky.com/s..._And_Reform_Published

[rowanwitch]

those that already have membership of these schemes should keep them as they formed part of their contracts and they would not be able to build up adequate funds in a different scheme before retirement,,, however I don't think new employees should have them... when a lot of public sector workers joined the salaries were not especially good compared with what could be earned in'the real world' so the trade off was job security and the better pension...now public sector salaries are as good if not better than the private sector so the justification for the benefit of better pension provision is harder to justify.

[Sooper]

Public Sector employees are tax payers as well! I pay my tax just like everyone else.

[rowanwitch]

I have worked in the public sector all my life..and many times looked at friends and thought I wish I'd done something different..when they were earning 2-3 times my salary .however I can draw a reduced option on my final salary based pension... only 2 fifths of final salary I might add in less than 2 years..and most will still be working at 60 so I traded a great lifestyle when younger for a bit more security now I am older.. but didn't do as well as acquaintances who joined the civil forces...police etc..all of whom have already retired with their mortgages paid off and much higher pensions...and yes we are all taxpayers...and many of us do jobs that need doing

[woofgang]

I think the only fair thing to do is to say that new employees don't get final salary. Its just plain unfair to change someone's t and c of employment in mid stream.

[youngmafbog]

In days of Yore, it was sold as "we get paid less so the perks are VFM". However the situation has changed so public service needs to get into the real world.

I am sorry but I dont buy the "my chums get more". Probably they have to work a damn sight harder. And yes I have inserd information on this.

[jake-the-peg]

Sounds like certain people have a bit of an image of what a public sector worker is

Some desk bound bureacrat counting paperclips in the town hall knocking off at 4:30

Police are public sector workers
As are Firemen,Nurses, Junior doctors

Do you think you work more or less hard than a junior Doctor YMB?

[Coobeastie]

As Sooper & Rowanwitch have pointed out public sector workers also pay taxes R1.

The pensions shouldn't be taken away for current employees but prehaps tailed back for new starters.

Youngmafbog...My wife works in the public sector and earns considerably less than if she worked in the private sector. She also works self employed in the private sector for leading companies and its surprising how often work is left over by the supposed harder working private sector workers for her to mop up alongside her normal days work.

I too work in the public sector and a quick check on the job pages seems to indicate that my wage is on par with the private sector...but then if I worked in the private sector I wouldn't get every tom dick and harry trying to tell me that they pay my wages.

[buildersmate]

All of the above are missing the critical point.
Whilst it is legally correct that accrued pension rights (in the past) cannot be taken away (and no-one - not even the present Government is suggested that), there is no God-given right for public sector workers to CONTINUE to benefit from the SAME level of benefit in the future. But there's the rub - the whole basis of the 'pension deal' is that is isn't actually calculated UNTIL the employee retires.
So the options are: -
1) fix the pension value of the accrued rights at today's income level based on years accrued to date - then add to it another pension pot for the employment service from today until retirement based on a different (less generous) formula
2) adjust the formula across the whole of the employment so it averages the better benefit in the past with the reduced benefit in the future - this is what Rowanwitch seems to have a problem with.
3) ask the employee to fund ALL the extra cost of 'buying' the equivalent value of the Final Salary scheme based on salary at retirement x total number of years worked (both pre- and post- the adjust date)
One of these has to happen.
And Woofgang, I'm afraid you are wrong - changes to employment terms can and do happen to everyone, much as the Unions may choose to claim they can't.

[craft1948]

BT used to have a final salary pension, then about 8 years ago (I think) they closed this to new recruits. I understand from my old boss, who is still working there, that they have now closed it for staff previously on the scheme, so yes they can change it whenever they want. My boss is now having to work longer for less than he expected.

[bpoolmecca]

I have paid into an endowment for 22 years the projected pay out was 93000 i will be lucky to get 23000,through no fault of my own.the public sector should be told sorry either pay in more or take less

[squarebear]

In the last local government place I worked in, it wasn't unusual for people about to retire to be suddenly promoted for the last year purely to increase their final year's salary. I believe it should be an average of your working time there not based on a falsely inflated salalry.

[buildersmate]

It used to be a pretty standard practice, Squarebear, at management levels in many areas of the public sector. Another practice was offering early retirement at the same pension renumeration as if service years had been accrued up to the date of normal retirement.

[rowanwitch]

I think people also forget that that public sector pensions are 'contributoy' we pay a percentage of our income the same as for other schemes. I understand the final sum is based on an average of your salary over the previous two years but does not include things like overtime...which some used to in the past...so it wasn't uncommon for people to work a lot of extra hours in the run up to retirement date to boost the sum paid..

[modeller]

When I was teaching it was quite common for people to be given promotion in their last year purely to boost their final salary pension. I remember cases where the appointment was a move up of two or three grades. Their work load didn't change it was purely done to boost the pension.
This method of playing the system was so common that a circular was sent from the council saying it shouldn't be done but it didn't stop it.
The fact that it was a contributary pension is irrelevant as the extra contribution would only be paid during that final few months and in any case the contribution is also matched by a similar amount from the council. So the taxpayer paid the extra salary and got nothing in return and then paid the higher pension for the next 20 odd years .