The myth of pensions.

Dougal

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Over the past few days I have heard Eoin Ronayne from the CPSU twice on our airwaves, once on Pat Kenny on Newstalk and again on Saturday RTE. On both occasions he used the same argument, our members get the OAP which they pay for (I agree with him here on the basis that they pay class A PRSI), but for an extra €115 pw, as they are paying already for their OAP, it is costing them 6.5% p.a. of their salary over 40 years. He is factually incorrect on this and not one person challenged him on either program. One panellist was Patricia Callan from the SFA and I was quite surprised that even she did not challenge this as she is extremely vocal of the fact that Pensions should be taken into account when discussing overall salaries. Using his figures he is basing this on someone retiring with a salary of €35,880. Their pension on retiring would be €17,940.

Pension contributions for the majority of PS, not all but the majority, are calculated as 3.5% for pension based on salary in excess of 2 times the OAP, 1.5% of total gross salary for Tax Free Cash and 1.5% of total gross salary for the Widows & Dependants pension which provides them with 50% of total pension (inclusive of OAP) in the event of death. Now for the purpose of calculation, let’s assume that for the first 10 years, this person was earning €20,880 and every 10 years they received a €5,000 pay rise. Over that 40 year period, that person would have contributed a total of €6,622 towards this pension. In the first 10 years, the percentage of salary would have been zero as it would have been in the second 10 years, in the 3rd 10 years it would have been 0.8%, and in the final 10 years it would have been 1.2%. A far cry from the 6.5% that Mr Ronayne is putting across.

Over the same period, this individual would have paid €17,029 from gross salary for which they would receive €53,820 Tax Free Cash in their hand. On top of that they, they would have paid a further €17,029 for access into the Widows & Dependants scheme which provides for half of their pension inclusive of the OAP to be paid in the event of their death, if at the time of retiring, if they did not have a spouse or dependants, this would be refunded. Even if you include the payment into the Widows & Dependants Scheme, which provides much more then just the €115 p.w. pension, the percentages per annum would increase to 1.5% in the first 10 and 20 years, 2.2% in the 3rd 10 years and 2.6% in the final 10 years. So Mr Ronayne, make your argument, put your case forward, but at the very least be truthful about it.

P.S. Mr Ronayne, and if you want to argue that they pay 6.5%, then you cannot use the argument that they pay for the OAP because they would be on Class D PRSI, which does not qualify and is only a maximum of 0.9%. Pick & Mix not an option.
 


Dougal

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Now, before anyone has a go at me, I will attack both Public Sector and Private Sector as I would defend both Public & Private Sector. I am not on one side here. I am neutral in the eyes of fairness. Just putting the info out there so all can see.
 
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ShoutingIsLeadership

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Dougal, if you're at a loose end, your thread would benefit from a table...
 

Therightroad

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Is there something wrong when people who never did a days work in their lives get a pension more or less the same as someone who worked 40 years ...?
 

mocame

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I found your post difficult to follow but to my knowledge your estimate of the pension payments paid by public servants is incorrect. This is firstly because you ignore the pension levy which averages at 7 per cent of salary. secondly you ignore prsi which public servants employed after 1995 pay in full but the old age pension they receive in return is deducted that from their public service pension. Thirdly you seen to assume that low paid public servants pay no pension contribution. this isn't true, they pay a contribution even if they only qualify for an old age pension and no public sector pension on top on top of that.
 

Absurdo

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I suppose this thread is on foot of the screaming headline in that paragon of journalism the indo today. Funnily enough all of those directors pensions seem to be completely funded and make unbelievable returns. Never seem to be able to get one though. So if you are public sector you have to sacrifice your pay rise and if you are private sector you have to be dumped into a dc pension to be robbed by fees and malinvestment. Meanwhile try and distract by pitting one against the other. And they wanted to close down false info Internet sites. Lol.
 

OrderoftheDragon

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As per Therightroad, someone who never did a tap in their lives or arrived off the refugee boat/plane get a pension of nearly €200 a week that they have contributed absolutely nothing to and we never hear a peep about that.

But the economic rightwing greasy till merchants make a song and dance about those who both served the state and contributed.
 

che schifo

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As per Therightroad, someone who never did a tap in their lives or arrived off the refugee boat/plane get a pension of nearly €200 a week that they have contributed absolutely nothing to and we never hear a peep about that.

But the economic rightwing greasy till merchants make a song and dance about those who both served the state and contributed.
Insults aside, it's not unreasonable for workers, who have no access to defined benefit pension schemes, to question how the defined benefit pensions of public sector workers are paid for.
 
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olli rehn

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Is there something wrong when people who never did a days work in their lives get a pension more or less the same as someone who worked 40 years ...?
I never met such a person in my life. They do not exist.
What you are thinking of is persons who never got paid for their work they did and therfore were unable to pay anything into the pension shemes.
 

redsaint

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Another scam ,from the scumbags,you won't see that headline in any of O'Brien's or Murdock rags.
 

Dougal

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I suppose this thread is on foot of the screaming headline in that paragon of journalism the indo today. Funnily enough all of those directors pensions seem to be completely funded and make unbelievable returns. Never seem to be able to get one though. So if you are public sector you have to sacrifice your pay rise and if you are private sector you have to be dumped into a dc pension to be robbed by fees and malinvestment. Meanwhile try and distract by pitting one against the other. And they wanted to close down false info Internet sites. Lol.
I didn't see the article that you are refering to, would be happy to comment if you can link it. My post was only in response to what was said on the airwaves over the past couple of days by Eoin Ronayne. As I said, I am not doing this as a Public Sector vs Private Sector, I am just laying down some facts. The Government have done much to assist the top bods in the private sector, not the general workers. Couple of years ago when they applied PRSI to pension contributions, one particular journalist in the indo did an article saying that it was now going to cost your employer more for you to pay into your pension, that article was factually wrong, I contacted the journalist on the matter but it was not changed, the article remained as it did and was also repeated on radio.
 
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Dougal

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I found your post difficult to follow but to my knowledge your estimate of the pension payments paid by public servants is incorrect. This is firstly because you ignore the pension levy which averages at 7 per cent of salary. secondly you ignore prsi which public servants employed after 1995 pay in full but the old age pension they receive in return is deducted that from their public service pension. Thirdly you seen to assume that low paid public servants pay no pension contribution. this isn't true, they pay a contribution even if they only qualify for an old age pension and no public sector pension on top on top of that.
I have not ignored the pension levy, I was making the comparison as to what Mr Ronayne was saying and the pension levy only kicks in at around €28k. He specifically referenced 6.5%, I know exactly where he is getting this percentage figure from. As for the the post 1995 workers, these are the ones that I refer to, as he was when he said they are paying for their OAP, I acknowledged that they are paying Class A PRSI which they are getting their OAP for, this is also what Mr Ronayne said and I acknowledged this. Mr Ronayne was saying that they pay 6.5% on top for the little bit extra they get in their pension. He specifically referenced €115 p.w. extra they would get over and above the value of the OAP. He is totally wrong on this. I also never said that low paid don't pay, I explained what they are paying it for, Tax Free Cash and the benefit of the Widows & Dependants Scheme which provides for 50% of pension inclusive of the value of the OAP. Sorry you find it difficult to follow but the only way to show it was by doing it in numbers.
 
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Dougal

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Dougal, if you're at a loose end, your thread would benefit from a table...
I have tried to do a table some while back on here but it always comes out as gobbledegook, I will see if I can figure out how to do one, would be more than happy to put one in if I can. If you know an easy way to do it, please PM me.

But let me put this bit in here to see if it clears anything up.

Pension Contributions paid by many Public Servants post 1995
3.5% towards pension - calculated on all salary above 2 x OAP (€230 x 52 x 2 = €23,920)
1.5% towards Tax Free Cash - Calculated on all salary
1.5% towards Widows & Dependants pension - Calculated on all salary

If they are pre 1995 workers, they pay the same with no deduction made for 2 x OAP but they pay PRSI under Class D at a rate of maximum 0.9%. If they are Civil Servants, pre & post 1995 don't pay the 3.5% but post 1995 workers got a pay rise of 20/19th to account for the fact that they would pay an increase in PRSI.

The reason the 1.5% is calculated on Gross Salary for the purpose of Tax Free Cash is that the Tax Free Cash is based on actual salary, not salary above OAP, and for the Widows & Dependants Pension is that the 50% of pension is inclusive of OAP as it is integrated, i.e. they don't just get 50% of the bit above OAP.

The main exception category that I have seen is the Garda, where they pay 1.75%, not sure if they pay towards the Spouses Pension or whether the 1.75% ever increased.
 
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Therightroad

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I never met such a person in my life. They do not exist.
What you are thinking of is persons who never got paid for their work they did and therfore were unable to pay anything into the pension shemes.
95% of travellers have never done a days work ....they are a growing group of people with their birth rates 3-4 times that of the average tax payer .
 

firefly123

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I never met such a person in my life. They do not exist.
What you are thinking of is persons who never got paid for their work they did and therfore were unable to pay anything into the pension shemes.
Oh they do. I get plenty who use the Ambulance taxi. Multigenerational. It's not 'correct' to say it but their are entire estates of them.
You also get the zombies around town although most of them are unlikely to be drawing down a pension in fairness.
 
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Rightist

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Is there something wrong when people who never did a days work in their lives get a pension more or less the same as someone who worked 40 years ...?
No, nothing. This is what they called - Fair Share.
 

Prester Jim

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I never met such a person in my life. They do not exist.
What you are thinking of is persons who never got paid for their work they did and therfore were unable to pay anything into the pension shemes.
They do unfortunately, I met a lot of them teaching in my time in Finglas, Crumlin and inner city Dublin*. I wouldn't say that they're proud of it but they don't give a fup what anyone else thinks about their intention to live off the state for their entire life and supplement that with a small bit of burglary, drug dealing, shoplifting or other petty crime. They are a minority in those areas but there are enough of them to make it seem like a viable choice for the youngsters from decent families and it is like a magnetic pull for the weaker students, "who am I trying to kid by thinking I can get a job, have a career, I should just do what they do".
It must be supremely tough for parents trying their best in these blackspots.
I am a soc dem and I really believe in a strong and prolonged social net that means those that try are kept comfortable while they get back on their feet, but this minority are not harmless, they weaken the social fabric and make a mockery of those that work, especially those who work hard for little gain. Something should be done about it but it is very difficult to sort them out without harming the good ones on the dole in the process, those who are already vulnerable, feeling low etc.

* met them too in rural life through the wife's village, they aren't only an urban problem.
 

HereWeGoAgain

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Insults aside, it's not unreasonable for workers, who have no access to defined benefit pension schemes, to question how the defined benefit pensions of public sector workers are paid for.
I wonder what salary Ronayne is on now .... this was 2009

In 2009, the general secretary post attracted a salary of about €120,000. Apart from his generous salary, Mr Ronayne is a member of the union's defined benefit scheme.

According to its accounts, all CPSU members get dental benefits which cost the union €242,000 in 2011. They also got optical benefits totalling €218,000, contributions toward cancer screening, hospital benefits of €31,000 and mortality benefits €22,000, as well as costs towards alternative medicine amounting to €10,000.
link
Big salaries and pensions of union bosses uncovered - Independent.ie
 


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