Pensions Debate

[pete]

Defined Benefit (e.g. civil service) v Defined Contribution (all new schemes).

By backing the Bank of Ireland unions I think FF are just playing politics. Banks are easy targets & gets the state out of its duty to provide state pensions.

I see no problem with moving new employees to defined contribution as defined benefit are too prone to under funding as company is solely responsible. Because people live so long now a defined benefit pension could have unimaginable outgoings for ever extra year someone lives after retirement. Companies still contribute to defined contribution schemes but more easy to estimate costs.

[Dr.Nightdub]

Pete, it's not just the Civil Service or banks that have defined benefit schemes, we've one where I work as well (private company, food industry) - though new recruits only get to join a defined contribution scheme.

From an employee point of view, DB is light years better - you're guaranteed X/64ths of your final salary, X being the number of years you've worked here. What you get under DC is conditioned by how well or badly the pension fund performs in terms of investing in the stock market. I'd hate to think that my quality of life in the twilight years was going to be influenced by some Gordon Gecko wannabe hoovering up too much charlie the night before.

Yeah, DB costs employers more, so what? I view that as payback for years of being underpaid.

[pete]

I also worked in previous company that had DB scheme. They moved/shift our section into separate entity so we have to transfer out of the DB into a new DC pension.

I'd love to have DB too but i think its stupid for the government to tell private companies what to do. New employees can look at the company & make their own judgement whether its a good overall deal to join that company. All the other banks have already changed to DB so unfair just to pick on BOI.

Look how much the recent unfunded Aer Lingus DB pension cost the state. Banks make big profits but other companies could go bust with vastly under funded schemes so youngest members might get almost nothing in return.

State employees don't know how good they have it with state guaranteed DB pension. Must be worth at least an addition 15% salary over private sector workers.

[BohsPartisan]

New employees can look at the company & make their own judgement whether its a good overall deal to join that company.

Its not Shopping Pete. A lot of people can't afford to wait until they find a company with the right pension scheme for them.

State employees don't know how good they have it with state guaranteed DB pension.

Oh yes we do! Its why we put up with the rubbish we do!

[Macy]

State employees don't know how good they have it with state guaranteed DB pension. Must be worth at least an addition 15% salary over private sector workers.

Hence for the average CO or EO we get paid less. It's that along with flexitime that keeps me in the public service. (Don't be fooled by the average pay rates talked about by IBEC and others - that includes TD's, Senators, Judiciary as well as the senior management and high overtime employments like the cops and prison officers.) We also have to contribute to the pension scheme.

The problem with DB pensions has been down to companies raiding the funds and mismanaging the pension fund by not recognising the short fall coming. DB pensions can and do work, but may cost slightly more than DC pensions, but the difference is not excessive for most companies - least of all the Banking sector. As usual it's corporate greed that's seeing the DB schemes going, nothing else.

[BohsPartisan]

CO money is awfull. Very hard to see how an entry level CO can live on the money they get. In fact I know one woman who is a CO who has a part time job in a bookies at weekends.

[Macy]

In fact I know one woman who is a CO who has a part time job in a bookies at weekends.

That seems to be very common these days. Could be a struggle years ago when I was at that level - thank god for the Buckfast - Royal Dutch combination and straight to a club

[Dodge]

Yeah part time jobs are the norm for COs in my place.

[Den Perry]

I'd love to have DB too but i think its stupid for the government to tell private companies what to do. New employees can look at the company & make their own judgement whether its a good overall deal to join that company. All the other banks have already changed to DB so unfair just to pick on BOI

Very good point...totally agree

[Den Perry]

[QUOTE=Dr.Nightdub;576413]Pete, it's not just the Civil Service or banks that have defined benefit schemes, we've one where I work as well (private company, food industry) - though new recruits only get to join a defined contribution scheme.

From an employee point of view, DB is light years better - you're guaranteed X/64ths of your final salary, X being the number of years you've worked here. What you get under DC is conditioned by how well or badly the pension fund performs in terms of investing in the stock market. I'd hate to think that my quality of life in the twilight years was going to be influenced by some Gordon Gecko wannabe hoovering up too much charlie the night before.

In fairness Dr those "gordon grecos" get paid a fund management fee directly correlated to the performance of the pension fund, thus it is in their own best interests to get the fund performing as well as possible

[BohsPartisan]

Not necessarily. Robert Maxwell anyone?

[Macy]

Not necessarily. Robert Maxwell anyone?

Enron?

The pensions crisis is down to companies not investing enough and more relevantly taking money (legally) out of the pensions funds. The people who suffer are not the legislators who allowed it, or the company directors and shareholders who oversaw it, but the ordinary joe soaps that have done absolutely nothing wrong.

[Aberdonian Stu]

The debate of DB versus DC is a worthy one folks but I think the greater problem is the lack of time and attention being given by people to setting up pension plans in general. There is a real need to hammer it home that people should set up some kind of pension plan as early as possible in their careers.

[BohsPartisan]

If it was compulsory for employers to set up pension plans for their employees then there would be no need to hammer it home. Now from reading this thread I know some people are against the idea of the government "telling employers what to do" (but evidently not against the government telling everyone else what to do) but which is worse? The scenario where an employer has to hire an extra accountant or administrator to look after this (and in a lot of cases that wouldn't be necessary) or the scenario where in 30-40 years time you have a lot of very poor elderly people who have no option but to work until they get to the grave?

[pete]

Can anyone tell me what a CO & EO (Executive Officer?) is? I thought all jobs in the civil service were part-time?

Good article in the IT car supplement yesterday on the big 3 US car companies. Aside from their badly run companies the car manufacturers have massive pension obligations & can't get out of them anytime soon as retirees living longer so current employees have less job prospects.

Defined Benefit guarantee a certain percentage of income based on what you retired at. AFAIk this is payable as long as you live. Employee has no control over where monies invested & may not know if under funded. If company closes & under funded pension then i think no comeback.

Defined Contribution says that the company with add a certain percentage of current salary to an individual pension account subject to possibly the employee adding a certain percentage. Employee has control of where cash invested, receives lump sum when retires & can spend as wishes.

[BohsPartisan]

CO = Clerical Officer. Just before benchmarking an entry level CO got less per hour than people in McDonalds. Its not much better now tbh.

[pete]

CO = Clerical Officer. Just before benchmarking an entry level CO got less per hour than people in McDonalds. Its not much better now tbh.

So the higher earning civil servants sold out their lesser paid brethern? Not winding up but surely the unions would vote for higher pay inceases at the lower pay scales? BTW what qualification do you require for a CO?

EO needs college degree?

[BohsPartisan]

Leaving Cert I think. Then you do an exam to get in. On the higher earners selling out the lower earners its not the case as they are in a different Union. They have however voted against the latest Partnership deal and are now balloting on the pursual of an independant pay claim.

[pete]

They have however voted against the latest Partnership deal and are now balloting on the pursual of an independant pay claim.

CO like an office admin worker so?

Since the unions have signed up the benchmarking is seems they contractually bound (nurses lost case in labout court) by the process. Easy enough to determine what COs are worth. Get private sector wage, subtract say 10% as private sector typically work longer hours for same pay (public sector don't work core 40 hour weeks), then subtract anther 10% for generous public sector pension. If private worker earns 12 euro, public sector should be paid 10 euro.

[Dodge]

CO = lowest level. as the name suggests Clerical work. Any dealings you have with the civil service will more than likely be with COs as they front all public offices etc. Leaving cert required here

EO is two grades up from that (can be promotion or entry level). They target graduates. (You can get by with great leaving cert, National Cert in the ITs/RTCs or degree).

All explained here http://www.publicjobs.ie Look at the public service unions for pay sclaes http://www.cpsu.ie (CO+Staff officers) http://www.pseu.ie (EO+Higher Executive officers)

Public sector pay is based on 41 hours week. If you don't work flexi you work 9.15-5.30, which is not less than the average office based provate sector worker...

Getting back on topic, I can't belive people are advocating giving less rights to ordinary workers. yes people can decide what package suits them best but wouldn't it better if they could choose between two good packages as opposed to two lesser ones...