Public service pension levy announced

Taoiseach Brian Cowen has announced the imposition of a pension levy on all public servants, as the main plank in the Government's recovery plan for the current year.

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A person earning €15,000 gross would pay a pension levy of 3% and the levy rises gradually thereafter.

* 5% on a salary of €25,000
* 6.4% on €35,000
* 7.2% on €45,000
* 7.7% on €55,000
* 8.1% on €65,000
* 8.5% on €85,000
* 8.8% on €100,000
* 9.2% on €150,000
* 9.4% on €200,000
* 9.6% on €300,000.

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difficult one here Mrs Ringo is a civil servant, but as some one on the private sector whose taking a pay cut i don't see why civil servants should be exempt. Would like my wife not to take hit:o

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Originally Posted by Ringo

difficult one here Mrs Ringo is a civil servant, but as some one on the private sector whose taking a pay cut i don't see why civil servants should be exempt. Would like my wife not to take hit:o

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I agree in principal but likewise Id rather I wasn't taking the hit :D Its a fair bit of money like.

I dont get the sugarcoating it as a 'pension levy' though. Just call it a pay cut.

Well a pay cut would hit current pensioners and hit your future pension whereas this does not. That is the reason for that.

What is unfair about it is, That current public servants who started after 95 currently pay 6.5 percent on their salary and if they are on roughly 49,000 they will pay 13.7 per cent to their pension. However someboy who joined before 1995 and who is on 80,000 will pay about 8.5 per cent.

If I was still a civil servant, it would work out thta between myself and the missus we'd be down at about €80 a week.

Which is obviously going to help the economy.

Read today that the Govt was "investing" another €8 billion in the banks (more than 5 times what they think they'll save from the public sector wage bill)

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Originally Posted by NeilMcD

Well a pay cut would hit current pensioners and hit your future pension whereas this does not. That is the reason for that.

What is unfair about it is, That current public servants who started after 95 currently pay 6.5 percent on their salary and if they are on roughly 49,000 they will pay 13.7 per cent to their pension. However someboy who joined before 1995 and who is on 80,000 will pay about 9.7 per cent.

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Ok. Im just going to nod and smile, because honestly dont understand the whole pension thing very well anyway.

Thanks for trying though :)

Another reason for having a "pension levy" instead of a pay cut is having a pay cut would cut the amount of tax and prsi paid by public servants

A pension levy doesn't.

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Originally Posted by micls

I dont get the sugarcoating it as a 'pension levy' though. Just call it a pay cut.

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Would enforcing a pay cut count as a breach of contract? This might be a way of doing it on stronger legal ground.

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Originally Posted by micls

Ok. Im just going to nod and smile, because honestly dont understand the whole pension thing very well anyway.

Thanks for trying though :)

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Basically if you are on 45,000 a year you pay about 6.5 per cent of your gross salary to your pension. However if you joined the civil service before 1995 this would not be the case. You would pay a small amount.

What they are doing now is they are increasing that levy that someone pays based on how much they earn. The table in the first post explains this. So someone who joins after 1995 currently pays 6.5 per cent of their gross to their penstion will now pay 13.2 per cent.

However someone who joined before 1995 and currently pays very little to their pension but earns say 80,000 grand or maybe even 200,000 will pay about 8.5 and 9.6 per cent of their gross towards their pension.

No, I understood how much it was going to cost me, it was the 'why it was called that' I didnt understand.

because if they cut your basic wages, they would also be cutting a guy who has retired from the civil services, basic pension because they are both linked. Secondly they would also be cutting your future pension as your basic would be reduced and your pension is half of what you earn over the last 3 years.

Also there may have been a legal issue with it too.

She can be hit and miss in her analysis, but there's a good article by Sarah Carey in today's IT on the Public v Private sector debate:
http://www.irishtimes.com/newspaper/...923385065.html

It would be easier to swallow if it was more weighted to the higher earners, but sure they wouldn't want to hit themselves and their fellow TD's too hard would they? Also, will Ministers now be paying it for their ministerial pensions? And finally, can we please have our last benchmarking increase paid, as we didn't get that on the basis that the increase was off set by our pensions.

No levy on the bankers that they keep on bailing out. How much would a similar levy on bank workers raise, with the monies the top brass are on?

Hard to know how it will effect us directly until we get confirmation whether it is a before tax pension increase, or a post tax levy. If it's before tax the net effect is roughly halved as we pay at the top rate of tax. It will reduce our spending and also factor in to our childcare arrangements, so it'll hit the state's take in on another side.

btw Pre-95 Civil Servants are paid at a lower rate, and pay a lower rate of PRSI. So while they don't have a pension charge it is implied in their salary scale, and they can't claim the same social welfare benefits as on an A stamp. It's one of the great muddying of the waters tatics by the right claiming that somehow civil and public servants don't pay for their pensions.

I was expecting other schemes alongside the public pay/pensions & was amazed this is all them came up with in a few months. Really have to wonder what the government do every day.

I know its not their job to run the country but if the unions object they really should look at providing an alternatives.

No mention of any cuts in Minister pay, Junior Ministers etc... Surprised little mention of that.

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Originally Posted by monutdfc

She can be hit and miss in her analysis, but there's a good article by Sarah Carey in today's IT on the Public v Private sector debate:
http://www.irishtimes.com/newspaper/...923385065.html

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I think she is usually worth a read. She is correct on that.

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Originally Posted by pete

I was expecting other schemes alongside the public pay/pensions & was amazed this is all them came up with in a few months. Really have to wonder what the government do every day.

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Agreed. I dont mind doing my bit if I thought there was a proper plan but a couple of billion isnt going to solve anything.

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Originally Posted by pete

I know its not their job to run the country but if the unions object they really should look at providing an alternatives.

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Agreed also.

I have a major problem with my friends, who are temporary teacher) being hit with this the same way I am(permanent). At least I have my job security-which is what I presume were paying for. They dont, most of them will lose their jobs this june.

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Originally Posted by pete

No mention of any cuts in Minister pay, Junior Ministers etc... Surprised little mention of that.

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I presumed they counted as public servants?

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Originally Posted by pete

I know its not their job to run the country but if the unions object they really should look at providing an alternatives.

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They'd said all along that they'd take pain in the scheme of an overall package. All we've got is public servants taking the hit on the same day BoI and AIB are playing hard ball with Lenihan over yet another bail out whilst they all keep their jobs, pensions and perks. Levy the bankers too, cap their wages with Civil Servants (which at the top are still very high), cap their pensions in line with it too.

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Originally Posted by micls

I presumed they counted as public servants?

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I expect they will take the hits on pension levy too but this a drop in the ocean. In the grand scheme of things pay cuts by the government would not bring in much cash but the symbolism would be important.

I saw Martin Manseragh on Vincent Brown last night on TV3 & when asked if there are any government cuts he made a vague reference to travel expenses. To his credit he has previously said he will offer to step down from Junior Minister position if asked but its was embarrassing watching him to know he is a Junior Minister when all he could do was literally shout & rant at Vincent Browne. :rolleyes:

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Originally Posted by pete

I expect they will take the hits on pension levy too but this a drop in the ocean. In the grand scheme of things pay cuts by the government would not bring in much cash but the symbolism would be important.

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Ok. Thanks

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Originally Posted by pete

No mention of any cuts in Minister pay, Junior Ministers etc... Surprised little mention of that.

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The councillors in Dublin proposed a 10% pay cut. Here's what Labour councillor Aodhán O'Ríordáin had to say about that:

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Fianna Fáil Motion to Cut Councillor Salary by 10% Hypocritical

The motion proposed tonight by members of the Fianna Fáil group on Dublin City Council is hypocritical in the extreme and classic cheap electoral politics.

The proposal that each member of Dublin City Council should take a 10% pay cut has been referred to the Protocol and Selection Committee however it goes nowhere to uncovering the real scandal of payments to Councillors at the taxpayers expense?

Will the Fianna Fáil members agree to a root and branch review of Councillor Expenses?
Why are councillor mobile bills paid to the tune of €30,000 per year?
Why are lavish expenses paid to councillors who attend meaningless conferences around the country?
How many councillors in the Fianna Fáil group have taken lifts in colleagues cars to meetings in other counties and then claimed travel expenses?
Why is there no attempt to take 10% or more from the tax-free expenses afforded to councillors which would amass a greater saving for the council.
Fianna Fáil representatives attempts to distance themselves from the mess that their government colleagues have made and to present themselves as guardians of the solution is pathetic and unworthy of council support.

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Originally Posted by pete

In the grand scheme of things pay cuts by the government would not bring in much cash but the symbolism would be important.

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Its only symbolism? Does anyone truly expect the Govt to use tht €1.4 billion to better the lives of anyone?

It has, however, taken €1.4billion worth of spending power out of the economy. Which will absolutely impact people. A colleague of my wife is now considering leaving the public service as when her revised salary has travel and child minding removed leaves her with the grand total of €60 per week (She'll be down about €40 per week). She was struggling as it was. I hate people who use extreme examples to back up their point but the realilty is that for a huge amount of young families with the parents working in the civil service, cutting €30-100 per week from their budget is going to hurt them.

Which will cause them to spend less, which will lead to further trouble in the private sector which will lead to another cycle of this rubbish.

Does it affect someone on €300k? Does it ****

I am becomming very disillusioned with this place now. Am really considering emigration, but going on 36 now am I too old? Anybody here ever made such a change at that age?
Btw I'm still working but not enjoying it.!!!!!