Does the Irish public think public sector pensions are a problem?

patslatt

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Public sector pensions based on final salaries and indexed to wages are largely underfunded by employee contributions to their pensions in the high salary brackets above about €40,000,a lack of proper funding that will lead to huge future tax burdens.This raises the question,why should private sector employees have to pay increased taxes for public sector pensions that are vastly more generous than those of the private sector?

It would be useful to have extensive public opinion polls on the attitude of the Irish public to such pensions. If the public think the pensions are too generous or that the public sector should fund them fully through increased contributions,then the Croke Park deal on pensions should be scrapped immediately.

The response of the Irish public would likely be negative,judging by news from the US in the article
The Political Rumble Over Public Pension Costs - BusinessWeek

Quote:

"Seventysix percent of Californians polled in June said public pensions were a big problem or "somewhat of a problem",according to a poll by the Pew Center on the states and the Public Policy Institute of California.In Illinois,83% of the respondents answered the same way,as did 79 percent in New York."

"Six cities-Boston,Chicago,Cincinnati,Jackonville (Fla),Philadelphia and St Paul (Minn)-will run out of pension money by 2020..."

"Already this year,16 states have required public employees to pay more into retirement benefits or cut benefits for new hires...California's new budget...rolls back new hires' pension benefits to 1998 levels."

Quite a contrast to our nearly bankrupt government's Croke Park deal.
 
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Mar Tweedy

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Problem is solved if there is a reliable health service and good state pension provision for all workers regardless of public or private sector. Then we can happily reduce the state contribution to public sector pensions and the massive state contribution to private pensions through tax breaks/refunds.

That should sort it.
 

patslatt

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Problem is solved if there is a reliable health service and good state pension provision for all workers regardless of public or private sector. Then we can happily reduce the state contribution to public sector pensions and the massive state contribution to private pensions through tax breaks/refunds.

That should sort it.
You want to postpone the day of reckoning for our nearly bankrupt treasury.

Most people would not make proper provision for retirement without the pension tax breaks and would end up almost totally dependant on the old age pension. That's the reality faced every day by pension advisers and life insurance sales people. Forty years from now,the number of workers per pensioner will be far less than today,so pensions will fall way behind pay without a generous tax break for pensions plans.
 

Mar Tweedy

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You want to postpone the day of reckoning for our nearly bankrupt treasury.

Most people would not make proper provision for retirement without the pension tax breaks and would end up almost totally dependant on the old age pension. That's the reality faced every day by pension advisers and life insurance sales people. Forty years from now,the number of workers per pensioner will be far less than today,so pensions will fall way behind pay without a generous tax break for pensions plans.
It's logically inconsistent to argue against generous state support of public sector pensions while encouraging generous state support of private ones.

Get rid of the distinction and have good systems of care so people do not need to feel so insecure about their future as an older person.
 

Right is right

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There is a difference between reducing a person's tax bill due to the fact that they are saving for their future pension (which they will be taxed on) and paying for a gold plated pension which is out of sync with what nearly every non-PS worker will get.
 

Mar Tweedy

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There is a difference between reducing a person's tax bill due to the fact that they are saving for their future pension (which they will be taxed on) and paying for a gold plated pension which is out of sync with what nearly every non-PS worker will get.
How is it different to give someone a tax refund (which effectively is what it is as it is relief on tax that should be paid) and a contribution towards paying for a pension. Both involve the state underwriting the cost of retirement pensions for individuals with significantly greater underwriting for higher paid individuals both in the private and public sectors.

A fairer situation would be if the state withdrew from much of its underwriting especially the disproportionate amount given to higher paid public and private sector workers and instead invested in proper state pensions for all and proper health services for all older people.
 

Abaddon

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Pat - not another thread about the PS! You're obsessed! Did you not get the pension you thought you were getting when you retired from the PS?
 

Right is right

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How is it different to give someone a tax refund (which effectively is what it is as it is relief on tax that should be paid) and a contribution towards paying for a pension. Both involve the state underwriting the cost of retirement pensions for individuals with significantly greater underwriting for higher paid individuals both in the private and public sectors.

A fairer situation would be if the state withdrew from much of its underwriting especially the disproportionate amount given to higher paid public and private sector workers and instead invested in proper state pensions for all and proper health services for all older people.
Because they are taxed on the income earned from their pension - ie they are effectively deferring a tax payment. It is also economically cheaper for individuals to fund their own pensions (as a whole) rather than the state fund them.

They are talking about savings of 1bn Euro by cutting pension tax relief. How much would it cost to provide for proper state pensions and proper health services???
 

patslatt

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Public sector employee contributions to pensions tax deductible

It's logically inconsistent to argue against generous state support of public sector pensions while encouraging generous state support of private ones.

Get rid of the distinction and have good systems of care so people do not need to feel so insecure about their future as an older person.
The contribution of employees to government pensions is tax deductible ASFAIK. Again,the reality is that without tax deductibility,most private sector people won't buy pension plans. Ask any life insurance sales person.So without the tax incentive, most people will depend on the old age pension 40 years hence,at a time when there will be far fewer workers per pensioner,a recipe for social and economic disaster. Doesn't that worry you just a little?
 

firefly123

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Has anyone done an independent non biased analysis of the current cost of public sector pensions (not including the state old age pension everyone gets) compared to the contributions given by current ps workers every week including the pension levy? What is the deficit, if any? If pensions were capped for high earner ps and government types what difference would it make. Where would one go to do the analysis?
 

Baron von Biffo

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Very disappointing OP Pat. At the very least I expected a tale of an alcoholic relative who worked as a temporary postman one Christmas in the sixties and who's had a €50k pension ever since.
 

Baron von Biffo

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Problem is solved if there is a reliable health service and good state pension provision for all workers regardless of public or private sector. Then we can happily reduce the state contribution to public sector pensions and the massive state contribution to private pensions through tax breaks/refunds.

That should sort it.
The thing is there is no state contribution to PS pensions. The fact that PS workers are not allowed to opt out of the scheme suggests that the state actually makes money on the deal.
 

riker1969

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Ah Pat-business a bit slow today, thus time to vomit up another diatribe. Look most reasonable Public servants agree the linking of pensions to current holders of the jobs is ludicrous and should be replaced. Its replacement must ensure that pensions are properly based on inflation/cost of living.

The Second point is I dont get the old age pension. I do pay and always have paid full PRSI. Many but not all defined benefit pension schemes dont pay the old age pension .

Thirdly, like many teachers I have to buy back years because I was exploited by the State for years being paid such a low wage that I qualified for social housing and income support. Im talking about temporary teachers and Pat as well know is a fan of exploiting the poor.

Fourthly, please stop trotting out idiotic CSO statistics on comparisons Private vs public because the CSO have consistently said these comparisons make no sense as the private sector includes large swathes of manual unskilled workers while the Public sector is populated by largely qualified people. Internationally they are always paid more. That being said further wage cuts might happen as this crisis gets worse but I will fight them tooth and nail as Ireland is a country that cant guarantee me proper health care,Education or childcare. The poor state of these services is not down to public pay.

Would be interesting if Pat really revealed his" activities" -read between the lines.The newspapers obviously just think you are just pedantic as you have not succeeded in your aim of getting your own column
 

SeanieFitz

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Very disappointing OP Pat. At the very least I expected a tale of an alcoholic relative who worked as a temporary postman one Christmas in the sixties and who's had a €50k pension ever since.
and no doubt was also allowed to keep his bike!
 

riker1969

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The thing is there is no state contribution to PS pensions. The fact that PS workers are not allowed to opt out of the scheme suggests that the state actually makes money on the deal.
Good point-why cant we opt out? Teachers had a fund before Pats party leader DEV ram-sacked it and from then on it was paid out of exchequer funds. Private pension schemes in Ire are the worst in Europe-hardly my fault. I would challenge anyone to prove that if a teachers pension fund existed that it would be in deficit. We will always have teachers remember.
 

riker1969

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Has anyone done an independent non biased analysis of the current cost of public sector pensions (not including the state old age pension everyone gets) compared to the contributions given by current ps workers every week including the pension levy? What is the deficit, if any? If pensions were capped for high earner ps and government types what difference would it make. Where would one go to do the analysis?
Public servants never got and never will get the old age pension.
 

patslatt

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Unfunded gold plated pensions

The thing is there is no state contribution to PS pensions. The fact that PS workers are not allowed to opt out of the scheme suggests that the state actually makes money on the deal.
Private pensions typically are cash flow positive with a young work force and become cash flow negative as the number of retirees rises,hence the need for annual actuarially determined contributions to pension reserves to cover future liabilities. Unfortunately,many governments do not make contributions,preferring a politically expedient pay as you go year by year.This allows governments to pander to public sector workers with gold plated pension promises,sticking future generations with crippling tax bills to pay for them.

It is possible a future generation may be saved from this by a referendum change in the Irish constitution that will decline to accept unjust pension liabilities foisted on them by the government of a previus generation. What level of unfunded pension benefits could be considered an unjust imposition? If pension benefits for new employees are rolled back as appears inevitable in our near bankrupt state,pensions payments in excess of the rolled back entitlements could be considered unjust.
 
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