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Pension costs


catlaw5819

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Nov 11, 2010
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I am looking for a breakdown of public sector/civil service pensions, how much each person will pay in each month/year to their pension. In order to get half of their salary and a lump sum how much of their wages do they goes into pensions? Everyone always says we can't afford to give such generous pensions and they are underfunded but by how much, what is their contribution?
 

mickterry

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May 8, 2009
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I am looking for a breakdown of public sector/civil service pensions, how much each person will pay in each month/year to their pension. In order to get half of their salary and a lump sum how much of their wages do they goes into pensions? Everyone always says we can't afford to give such generous pensions and they are underfunded but by how much, what is their contribution?
My wife works for the HSE. Am not sure what she puts in but I know that to get the full benefit she would have to work for forty years. Not going to happen in her case.
 

Trainwreck

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It is probably worth about 15-20% of their salary annually.

If you wanted to take account of the added level of security, which means they have the government backing the promise to pay, it is probably worth more like 35% of salary at the moment.
 

Conor

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I am looking for a breakdown of public sector/civil service pensions, how much each person will pay in each month/year to their pension. In order to get half of their salary and a lump sum how much of their wages do they goes into pensions? Everyone always says we can't afford to give such generous pensions and they are underfunded but by how much, what is their contribution?
It's all here.
 

Trainwreck

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Neither of this links provide the true cost.

Wall into the office of a decent financial advisor and tell them you want to replicate a public service pension and ask them to estimate how much you would have to contribute out of your pay.

The figure is very large as a proportion of salary and you would probably have to give up a lot of things to afford it. Unless taxpayer were picking up the largest proportion of the tab.
 

dresden8

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Neither of this links provide the true cost.

Wall into the office of a decent financial advisor and tell them you want to replicate a public service pension and ask them to estimate how much you would have to contribute out of your pay.

The figure is very large as a proportion of salary and you would probably have to give up a lot of things to afford it. Unless taxpayer were picking up the largest proportion of the tab.
That's because they charge you a fortune to lose all your money for you.

That's not the Public Sector's fault.
 

cobhguy

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Jun 22, 2010
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i am in private sector and it works out about 14 percent of my wage to get 50 percent pension. That 50 percent includes old age pension.
 

Schlack

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Jan 17, 2005
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It is also important to differentiate between public servant who joined pre-95 and post 95. The Latter pay full PRSI, the former a much lower rate, but are paid less to even it out.

for the Post 95, the "work" pension tops up the OAP that everyone is entitled to.

For instand according to the Pension moddeller, I will get 11 K on top of the OAP. Gold fvcking plated!
 
Last edited:

laidback

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Jun 3, 2009
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many state employees are in what is known as the Local Govt Supn scheme eg teachers, nurses. they pay 6.5% of salary and need 40 years service for a full pension as an earlier poster said.

These contributory pensions are already reduced under the emergency legislation. If revised Croke Park 2 goes through, pensions of between €12,000 - €24,000 will be subject to an 8% deduction (they are already subject to a 6% deduction).

Many people don't have full service - often treated as temporary/on contract for years.
 

ShoutingIsLeadership

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many state employees are in what is known as the Local Govt Supn scheme eg teachers, nurses. they pay 6.5% of salary and need 40 years service for a full pension as an earlier poster said.

These contributory pensions are already reduced under the emergency legislation. If revised Croke Park 2 goes through, pensions of between €12,000 - €24,000 will be subject to an 8% deduction (they are already subject to a 6% deduction).

Many people don't have full service - often treated as temporary/on contract for years.
Are you sure that's the case? I understood that it was pension over 32.5k that were to be hit, and that the figures you outlined applied to the 12-24k part of their pension.
 

Trainwreck

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That's because they charge you a fortune to lose all your money for you.

That's not the Public Sector's fault.
No.

Assume no fees or asset management costs or transaction costs whatsoever.



The problem with this debate is that more the 95% of the population have an idea about how to calculate the cost of pension provision.

Hell, more than half the population don't even understand the concept of time value of money.
 

Trainwreck

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i am in private sector and it works out about 14 percent of my wage to get 50 percent pension. That 50 percent includes old age pension.
But that isn't the equivalent of a public section pension is it?


To put it on an comparable basis risk wise (think Waterford) you would need to pay more. A lot more.


Second, how much does you employer contribute. For you that is a cost of employing you (part of you pay but you don't see it in your pay cheque). For public sector pensions, the cost assumed (but not paid) by the government is just another cost to taxpayers to be born over time - but never properly accounted for or booked as a cost up front.
 

ShoutingIsLeadership

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But that isn't the equivalent of a public section pension is it?


To put it on an comparable basis risk wise (think Waterford) you would need to pay more. A lot more.


Second, how much does you employer contribute. For you that is a cost of employing you (part of you pay but you don't see it in your pay cheque). For public sector pensions, the cost assumed (but not paid) by the government is just another cost to taxpayers to be born over time - but never properly accounted for or booked as a cost up front.
Risk?

Over the past few years, Irish governments have continually cut the pensions of retired public sector workers.
 

Trainwreck

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Risk?

Over the past few years, Irish governments have continually cut the pensions of retired public sector workers.
You guys don't seem to live in the real world. I'm not talking about a 5% reduction for pensions over €60,000 per annum. I am talking about a 64 year old worker within one year of retirement losing more than 50%, perhaps 100%, of his/her expected pension. For example:

Arnotts indicates it may wind up pension scheme - Business News | Latest News Stories | The Irish Times - Wed, Aug 29, 2012
 

ShoutingIsLeadership

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You guys don't seem to live in the real world. I'm not talking about a 5% reduction for pensions over €60,000 per annum. I am talking about a 64 year old worker within one year of retirement losing more than 50%, perhaps 100%, of his/her expected pension. For example:

Arnotts indicates it may wind up pension scheme - Business News | Latest News Stories | The Irish Times - Wed, Aug 29, 2012
You guys?

I work in the private sector.

As to the main point: should we seek to lower standards to that level, or raise them to an acceptable level?
 

firefly123

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Dec 8, 2009
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28,158
It hasn't taken long for the usual slagging match to start. We all live in the bloody real world if we are PAYE workers.

If a workers pension is cut by 80-90% then there is something terribly wrong with his scheme or the management of it. Seriously that is just not normal even in the real world.
PS workers earning under €60,000 have a decent pension and probably break about even in terms of cost and payment. The problem begins on those earning high wages in the PS and yet still entitled to a 50% pension and lump sum of 1.5 final. Suddenly you end up with people getting €90,000 as a pension and a lump of over €200,000! That's just outrageous.
If PS pensions were capped once a certain threshold was reached you would have very little opposition within the PS. It was designed to leave pensioners comfortable not loaded.

My views on the private pensions scam that exists here have been posted before. Personally I'd like to see a national pensions scheme that all are OBLIDGED to contribute. Public and private. I'd want it so that the constitution would prevent the government getting their shorttermism mitts on it and that it would be invested in the country for EVERYONE'S benefit. I'd give up my PS pension for that.
 

feargach

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Dec 11, 2006
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4,995
I am looking for a breakdown of public sector/civil service pensions, how much each person will pay in each month/year to their pension. In order to get half of their salary and a lump sum how much of their wages do they goes into pensions? Everyone always says we can't afford to give such generous pensions and they are underfunded but by how much, what is their contribution?
Your calculations are ignoring a vital point: will the government honour those pensions when the time comes?

Or will they cut those pensions before retirement arrives?

We all know that they're going to be cut. So, their contribution is not all that significant.

The pensions "promises/commitments/solemn obligations" are worth a lot less than the paper they're written on. We all know that, so it's deeply dishonest to pretend that the completely fictional promise of allegedly gold-plated, diamond-encrusted, Croesus-like pensions is in any way meaningful.

We know that retired public servants and retired private sector workers will be eating out of the same rubbish bins, so why pretend otherwise?
 
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