Taxpayers to plug €267m Fás pension deficit

neutral_lurker

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FÁS has a massive €267 million hole in its pension fund which will now have to be paid for by the taxpayer under rules introduced last year to guarantee semi-state pension pots.


The troubled state training agency has assets of €384.5m and liabilities of €632m in its pension fund, according to figures from the Department of Finance, leaving the taxpayer exposed to the €267.5m gap.

Under the Financial Measures (Misc Provisions) Bill rushed through the Dáil in just three days last year, these pensions are guaranteed by the taxpayer.


Taxpayers to plug €267m Fás pension deficit | Irish Examiner


Another bank style bailout?
 


DCon

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It's going to get very bad, if the figures below have not improved:

Brian Lenihan Jnr (Minister, Department of Finance; Dublin West, Fianna Fail)

The tabular statement below, based on returns from the relevant Bodies, shows the assets and liabilities at 31 December 2008 of the covered pension funds listed in Schedule 1 of the Financial Measures (Miscellaneous Provisions) Act 2009. This is the latest date for which the information requested is available. The Deputy may wish to note that asset values for pension funds in general have improved in the interim and are subject to market fluctuations.


2008 Assets 2008 Liabilities

Arts Council 2,424,539 6,950,047
Bord Bia 12,800,00 20,000,000
CERT (Fáilte Ireland) 10,455,000 18,693,000
FAS 328,193,000 631,428,000
IDA (Forfás) 182,800,000 209,340,000
Irish Goods Council (Forfas) 2,081,000 3,529,000
Regional Tourism 16,000,000 31,000,000
SFADCO 48,000,000 64,900,000
IPA 20,700,000 40,800,000
ESRI 13,372,000 25,257,000
NUIG 176,995,701 249,000,000
NUIM 47,372,000 114,000,000
TCD 245,910,831 554,644,927
UCC 267,495,000 385,579,000
UCD 403,400,000 712,000,000
National University of Ireland 6,133,000 13,104,00
Pension Provisions: 1 Dec 2009: Written answers (KildareStreet.com)
 

NeilW

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You would prefer to see ordinary workers lose their entire pension?
 

DCon

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You would prefer to see ordinary workers lose their entire pension?
I would prefer the established pension schemes fund the pensions.

If the pension fund assets can not meet the full liabilities than the pensioners have to deal with that, and maybe accept a smaller pension.

If you look at the assets above, neither have a value of 0 so nobody was going to lose their "entire pension".
 

Thac0man

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You would prefer to see ordinary workers lose their entire pension?
Anyone who goes next or near the State sector gets a pension. For instance if you are employed under contract to a semi-state, you contribute to your state pension that is set up for you. Its ridiculas. There should be a sliding system of pension entitlements at least, reflecting those that are in direct state employment as opposed to this who are semi-state or just in actual fact private contractors contacted to the state for a limited period of time. To be an 'ordinary worker' in this country is to be faced with the very real prospect of having only the standard Old Age Pension to retire on.
 

jake76

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You would prefer to see ordinary workers lose their entire pension?
Many of these pension holders are not ordinary workers. UCD have been adding extra years to the pensions of retirees and now they are in deficit.

Lower payments and higher contributions should be made before you ask ordinary workers to plug the gap.
 

NeilW

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If you look at the assets above, neither have a value of 0 so nobody was going to lose their "entire pension".
That entirely depends on the prioritisation order for the assets, doesnt it? If the assets are used to secure pensioners' benefits first then there may well be nothing left for current workers or their dependents. I still dont see why it is fair for ordinary workers to lose the benefits they have earned during their careers. Or why anyone would want to justify that.
 

DCon

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That entirely depends on the prioritisation order for the assets, doesnt it? If the assets are used to secure pensioners' benefits first then there may well be nothing left for current workers or their dependents. I still dont see why it is fair for ordinary workers to lose the benefits they have earned during their careers. Or why anyone would want to justify that.
Who are "ordinary workers"? Rody Molloy you mean?

It might not be fair, but why should the exchequer step in?

Is it fair that a lot of people are in negative equity? Should the State guarantee the price of their houses?
 

Baron von Biffo

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Anyone who goes next or near the State sector gets a pension. For instance if you are employed under contract to a semi-state, you contribute to your state pension that is set up for you. Its ridiculas. There should be a sliding system of pension entitlements at least, reflecting those that are in direct state employment as opposed to this who are semi-state or just in actual fact private contractors contacted to the state for a limited period of time. To be an 'ordinary worker' in this country is to be faced with the very real prospect of having only the standard Old Age Pension to retire on.
Let's say you get a 3 year state contract today to empty the ashtray in Cowens merc. You're on €60k a year (PS pay is like that.) For the 3 years you'll pay, on top of your PRSI, a pension contribution and a pension levy and you'll also have to pay into the spouses and children's pension scheme. How much of a pension will you get from this?
 

Baron von Biffo

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Who are "ordinary workers"? Rody Molloy you mean?

It might not be fair, but why should the exchequer step in?

Is it fair that a lot of people are in negative equity? Should the State guarantee the price of their houses?
If you're going to use Roddy Molloy as the typical PS worker you'll have to accept Eugene Sheehy as the typical private sector worker.
 

Barnacle

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Let's say you get a 3 year state contract today to empty the ashtray in Cowens merc. You're on €60k a year (PS pay is like that.) For the 3 years you'll pay, on top of your PRSI, a pension contribution and a pension levy and you'll also have to pay into the spouses and children's pension scheme. How much of a pension will you get from this?

Pension of €2,250 per annum plus TFC of €6,750.
 

Baron von Biffo

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80th Scheme Rules based on completing 3 full years service and Final Pensionable Salary being €60k per annum. 1/80 pension and 3/80 TFC per year of service.
Bit of a problem there Barnacle. Your PS pension is made up of the OAP and an occupational element if any on top. Since the OAP, which you've paid for with your PRSI, exceeds that €2,250 you've got nothing for your payments.

You will have paid 6% pension contribution and around the same in Pension levy and whatever the widows and orphans is, let's round it down to 10% in total to keep the numbers easy. That means you pay €18,000 in contributions for a return of €6,750 when you reach pension age. Even a bank director could spot the problem with that.
 

NeilW

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It might not be fair, but why should the exchequer step in?
Two very good reasons that I could see:

(1) It would not be right to see ordinary workers lose their entire retirement savings through no fault of their own

(2) The government could potentially be found liable for the losses anyway after a long and expensive judicial process
 

Barnacle

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Bit of a problem there Barnacle. Your PS pension is made up of the OAP and an occupational element if any on top. Since the OAP, which you've paid for with your PRSI, exceeds that €2,250 you've got nothing for your payments.

You will have paid 6% pension contribution and around the same in Pension levy and whatever the widows and orphans is, let's round it down to 10% in total to keep the numbers easy. That means you pay €18,000 in contributions for a return of €6,750 when you reach pension age. Even a bank director could spot the problem with that.

Of course it depends on integration and whether or not it applies. The figures are what you are entitled to under the scheme, i.e. based on the face of it these are the figures. There is no black and white in this.

Also, you would not pay €18k as pension contributions are based on salary less twice the current state pension. So pension contribution would be based on a salary of €40k.
 

Baron von Biffo

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Of course it depends on integration and whether or not it applies. The figures are what you are entitled to under the scheme, i.e. based on the face of it these are the figures. There is no black and white in this.
It's perfectly black and white. It's Coal black and Daz blue white. There's no ambiguity whatsoever. Your €2,250 is less than the OAP so you'll get the OAP and that's it. You paid for the OAP from your PRSI so your pension payments didn't buy you a cent of a pension.

Also, you would not pay €18k as pension contributions are based on salary less twice the current state pension. So pension contribution would be based on a salary of €40k.
Perhaps a PS worker can comment on the accuracy of that but even if it's correct you've still paid €12,000 for a return of €6,750 when you hit pension age. In effect you've paid an extra tax of €1,750 a year because you were working in the PS.
 

Barnacle

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It's perfectly black and white. It's Coal black and Daz blue white. There's no ambiguity whatsoever. Your €2,250 is less than the OAP so you'll get the OAP and that's it. You paid for the OAP from your PRSI so your pension payments didn't buy you a cent of a pension.



Perhaps a PS worker can comment on the accuracy of that but even if it's correct you've still paid €12,000 for a return of €6,750 when you hit pension age. In effect you've paid an extra tax of €1,750 a year because you were working in the PS.
It could be the case that you are not entitled to a state pension. If you were not entitled to a State Pension or entitled to a less state pension than single person then the scheme allows for a supplementary benefit to be paid.
 

Baron von Biffo

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It could be the case that you are not entitled to a state pension. If you were not entitled to a State Pension or entitled to a less state pension than single person then the scheme allows for a supplementary benefit to be paid.
That's confusing, could you explain how this person wouldn't have an entitlement to the OAP or entitlement to a reduced OAP? Where do you see this 'supplementary payment' coming from?
 

irishfeller

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Two very good reasons that I could see:

(1) It would not be right to see ordinary workers lose their entire retirement savings through no fault of their own

(2) The government could potentially be found liable for the losses anyway after a long and expensive judicial process

I don't see why the taxpayer should pay these pensions.

Workers in these organisations invested in a pension scheme to fund them in their old age - the people managing the pensions didn't invest the money wisely or even if they did maybe they incurred losses due to the recession.

But what has the taxpayer got to do with all this? Why is it the taxpayer has to foot the bill for compensating people for their pensions going down?

If Brian Lenehan wasn't so free and easy with guaranteeing everything with taxpayers money then this country would be in a lot better shape.
 


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