Public service pension levy announced

[pete]

surely the 2007 benchmarking is the relevant one? Can benchmarking not decrease pay as well as increase?

Thats the impression I had. If so then surely when they took into account the pensions in the last one if the previous increases had been excessive they would have been reduced.

If not then it would seem to me that the benchmarking body arent doing their job right and it should be reviewed. I dont see how thats the fault of the public sector workers for signing up to it though.

I wouldn't criticise people for taking advantage of it but problem is unions not accepting the benefits. As you say if it was to mean anything wages could come down too. This was created under the mighty leadership of Bertie who just wanted to be friends with everyone.

One of the other major flaws is that it assumes for comparison sake that all private sector workers actually have pensions.

[Macy]

And Macy, before you mention it again, I'm well aware the last benchmark found the civil service was comparatively well enough paid and didn't increase. The previous one was a very different story.

No, the last benchmarking said that the difference in pay was circa 15% in favour of the private sector, but took account of the pension to award 0%. So add the that to the levy and you get 22.5% contribution to the pension, above the 6.5% that has always been paid. This is for the additional amount above the standard contributory pension that anyone paying stamps (including Pete) are paying.

Defined benefit pensions were the standard, workers were conned into believing they were, and are, too expensive - aided and abetted by Government who failed to regulate the scheme's and have allowed the deficits to be run up. It was all about profit maximisation and companies not wanting to look after their employee's. Now they're really getting their value from it, by using it as another angle in their worker v worker campaign.

As passinginterest said, pensions and job security were reasons some of us stuck it out in the Public Sector instead of cutting and running like some did to better paid jobs in the Private Sector. I don't, and didn't need, benchmarking to tell me I was earning less than the people I graduated with - I only had to ask them.

[OneRedArmy]

Unless you are close to retirement, defined benefits schemes are dead. As a result of underfunding and the demographic timebomb of an ageing population they are simply a big pyramid scheme.

My defined benefit scheme is probably underfunded by about €2bn euro.

It's been known for a decade that pensions are unsustainable, but given key decision makers are usually towards the higher age group, they have a disincentive to make any changes.

On comparisons versus public and private sector, we all have reference points. What I will say is that is very hard to put a value job security as it's an individual thing.

[pete]

Maybe this deserves its own thread...

Irish Pension Fund Performance over last 10 years

Fund Managers doing a great job!

Fiona Daly, Managing Director of Rubicon Investment Consulting, commented:"Irish group pension managed fund returns over the past ten years have been a very disappointing -1.0% per annum on average, well below the Irish inflation rate of 3.5% per annum over the same time horizon. Indeed, none of the managers surveyed outperformed inflation over this period, with only Merrion Investment Managers delivering positive returns."

We got the usually guff yesterday that it all wotrks itself out over the long term. Obvious 10 years is not long years enough.

[Dodge]

Didn't practically all the banks/assurance firms advertise their products as earning "significantly" above inflation?

For the record I'm no longer a public servant and have a minimal pension

[pete]

Didn't practically all the banks/assurance firms advertise their products as earning "significantly" above inflation?

Not sure about that. I didn't get to it yesterday but we had the annual presentation. They of course said recent dip doesn't matter i the long term which I would think fine for few years but 10 years seems fairly long term to me - could be 1/3 or 1/4 of pension life.

[Macy]

Unless you are close to retirement, defined benefits schemes are dead. As a result of underfunding and the demographic timebomb of an ageing population they are simply a big pyramid scheme.

My defined benefit scheme is probably underfunded by about €2bn euro.

Ireland hasn't the demographic problems of other countries, such as the UK.

Underfunding of pension schemes goes back to the lack of regulation that has allowed that situation to develop. They're underfunded because companies haven't contributed enough, and some of the dodgy practices around control and investment of the monies in them.

[pete]

Much as I am disillusioned with my defined contribution scheme at least I knwo what it is worth (or is not). Definied benefit schemes will always be under funded in a recession as company does not have the money (e.g. Banks) so will always be an issue if those companies collapse at that time. You also have the problem with retirees living longer & company might be much smaller now than was 20 years ago.

I read a suggestion recently that should be a proper state pension where everyone pays in from their wages so the more you pay the more you receive later. Apparently the Natonal Pension fund returns have been fair good. It would be cheaper to administer due to the economies of scale.

[Macy]

Apparently the Natonal Pension fund returns have been fair good. It would be cheaper to administer due to the economies of scale.

It wasn't doing too bad in the scheme of things, until the Government ploughed it into the Banks...

There should be a mandatory pension scheme for all workers, administered by the state.