So you thought your pension was safe!
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Melch,
I think we both agree in some areas, but I’m referring to a principle, and the possible consequences of getting it wrong for the people who are possibly going to be the most vulnerable in society and the most cherished by society. The g’ment can’t afford to gamble with the modern practice that you advocate, and which could possibly be right for a bog standard small/medium sized company. The methodology used by the Government to calculate its liability is way out of date, and only the g’ment would dispute that.
In the US (and I stand by to be corrected) the amount transferred into this ‘fund’ is a percentage of the serviceman's basic pay. So.. if the RAF was to implement policies that affect the future value of retirement benefits, it would see the ongoing budgetary consequences of that decision immediately, in the form of an increase or decrease in the amount to be transferred to the retirement fund. Public sector pensions are unfunded, completely - there is no separately managed pot of money drawn on to pay them - so the cost to us all is calculated using gilts, which have yields indexed to inflation. And now, that is not only out of date and dangerous practice, but badly f
ked up as a consequence of the current malaise.
Our pensions (and I get one too) aren’t funded from annual budgets. The military one is rubber stamped by Parliament annually after estimating how much money is going to be needed for the year ahead and adding that amount to the existing budget on a ‘pay-as-you-go’ basis and by using a Prerogative Instrument. This system has worked well as far as paying retirees go, but it does not hold policymakers responsible and/or accountable for decisions made today, or for the money, affecting the size of the future MoD retirement bill. The number of deferred members too, is massive and it won’t be for 15-20 years that our massive (by today) Cold War army wants its money. What then?
If however (and is this what you’re advocating?) the military was compelled to transfer into a fund the amount necessary to pay for future retirement commitments, and invest that, the situation might be better, but it would also expose the military community to factors such as the credit crunch. Then, can you imagine the carnage? You refer to ‘short term balance sheets and political aspirations’ but it isn’t that easy - I referred earlier to the carnage of getting it wrong. It is a no win situation, but by doing nothing, the problems are only going to mount up. Forget 'blame' - thats not the issue anymore.
I think we both agree in some areas, but I’m referring to a principle, and the possible consequences of getting it wrong for the people who are possibly going to be the most vulnerable in society and the most cherished by society. The g’ment can’t afford to gamble with the modern practice that you advocate, and which could possibly be right for a bog standard small/medium sized company. The methodology used by the Government to calculate its liability is way out of date, and only the g’ment would dispute that.
In the US (and I stand by to be corrected) the amount transferred into this ‘fund’ is a percentage of the serviceman's basic pay. So.. if the RAF was to implement policies that affect the future value of retirement benefits, it would see the ongoing budgetary consequences of that decision immediately, in the form of an increase or decrease in the amount to be transferred to the retirement fund. Public sector pensions are unfunded, completely - there is no separately managed pot of money drawn on to pay them - so the cost to us all is calculated using gilts, which have yields indexed to inflation. And now, that is not only out of date and dangerous practice, but badly f
ked up as a consequence of the current malaise.Our pensions (and I get one too) aren’t funded from annual budgets. The military one is rubber stamped by Parliament annually after estimating how much money is going to be needed for the year ahead and adding that amount to the existing budget on a ‘pay-as-you-go’ basis and by using a Prerogative Instrument. This system has worked well as far as paying retirees go, but it does not hold policymakers responsible and/or accountable for decisions made today, or for the money, affecting the size of the future MoD retirement bill. The number of deferred members too, is massive and it won’t be for 15-20 years that our massive (by today) Cold War army wants its money. What then?
If however (and is this what you’re advocating?) the military was compelled to transfer into a fund the amount necessary to pay for future retirement commitments, and invest that, the situation might be better, but it would also expose the military community to factors such as the credit crunch. Then, can you imagine the carnage? You refer to ‘short term balance sheets and political aspirations’ but it isn’t that easy - I referred earlier to the carnage of getting it wrong. It is a no win situation, but by doing nothing, the problems are only going to mount up. Forget 'blame' - thats not the issue anymore.
I don't own this space under my name. I should have leased it while I still could
Had I been a full career civil servant I would retire on half pay after 40 years service. That would be 25% lower than my service pension was after 38 years service a number of years ago.
The CS pension is also contributable in the same way as a serviceman's. The comparable pay is far lower (I am not saying it is wrong or too low) and the pension benefits are much lower too.
It says on the tin, a gold plated pension for a lower than average wage. It is was true and it remains true for the bulk of the CS below SCS level.
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Hang on guys. MPs have to vote for this first and as they always vote MASSIVELY for their own increased salaries, I can't really see them voting too soon or too seriously for an effective pay cut in retirement. It could take years to agree, and it is probably only a ruse to try and get our eyes off the appalling mess Brown and Darling have put us all in anyway.
Many Pruners have squarely hit the nail. It is the ludicrously bloated Labour client state (including the civil service) that has caused this mess. The government, of whatever hue, has always taken money in with one hand and immediately paid it out with the other. This week's national insurance contributions are paid to pensioners and benefit recipients next week.
Remember that it was Nye Bevan - one of the founders of the Welfare State - who used to say: "The great secret about the National Insurance fund is that there ain't no fund."
Pip pip
ON
Many Pruners have squarely hit the nail. It is the ludicrously bloated Labour client state (including the civil service) that has caused this mess. The government, of whatever hue, has always taken money in with one hand and immediately paid it out with the other. This week's national insurance contributions are paid to pensioners and benefit recipients next week.
Remember that it was Nye Bevan - one of the founders of the Welfare State - who used to say: "The great secret about the National Insurance fund is that there ain't no fund."
Pip pip
ON
Last edited by Old Ned; 14th Feb 2009 at 15:57. Reason: Whoops typo
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Well the current advertisement for all armed forces jobs includes the words a great pension as well as many other perks.
If they were going to get people to join up and then remove that so called perk then I would suspect it may lead government in to trouble.
The forces already have moved to the new pay scheme which pays out more at 55 rather than the pay now 75 scheme.
So I have to agree with what EdSettt says I think this is more based on the civilian sector rather than small percentage of troops who manage to get a pension after 22 years.
God knows either way we all agree it will not go down very well with everyone. I know I will be voting next election
If they were going to get people to join up and then remove that so called perk then I would suspect it may lead government in to trouble.
The forces already have moved to the new pay scheme which pays out more at 55 rather than the pay now 75 scheme.
So I have to agree with what EdSettt says I think this is more based on the civilian sector rather than small percentage of troops who manage to get a pension after 22 years.
God knows either way we all agree it will not go down very well with everyone. I know I will be voting next election
I don't own this space under my name. I should have leased it while I still could
And all this brouhaha about huge directors' bonuses - bonus £1,000,000 pass £400,000 straight to Alastair.
Cut the bonus, increase profits, and Alastair still takes his cut with corporation tax. So what really focusses their attention is lower pay, bonus and profit which all hit the tax take.
Give the banks £10bn and £4bn comes straight back and another £900m in VAT. And of course another slice in fuel tax, road tax, car tax etc etc. Win-win for someone. I would be surprised if the treasury actually forked out more than £3bn.
Cut the bonus, increase profits, and Alastair still takes his cut with corporation tax. So what really focusses their attention is lower pay, bonus and profit which all hit the tax take.
Give the banks £10bn and £4bn comes straight back and another £900m in VAT. And of course another slice in fuel tax, road tax, car tax etc etc. Win-win for someone. I would be surprised if the treasury actually forked out more than £3bn.
What galls me is that it was Broon who created the mess in the first place when he robbed pension funds to fund his plans. If it wasn't for that, final salary schemes would probalbly still be the norm.
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Its is interesting to listen to various Govt ministers and their Shadows when challenged about public sector pensions. When its in general terms its all about finishing final salary schemes for Public servants. But when asked about specfic groups servicemen, Frontline NHS staff etc they get a little more coy as they know that attacking those groups is a vote looser. Maybe they should look closley at the civil service itself and cap some of the senior pensions. Or as was sugested in Yes Prime minister link pensions to honours either you get a gong or you get index linking.
I don't own this space under my name. I should have leased it while I still could
Of other groups such as servicemen and NHS their may be wider public vote sympathy but consider the wider civil service.
Job centres, local government, ministries etc. They also carry a vote and given the proportion of the work force on the Government payroll it is probably a given that the public service workers could elect a Government despite the counter vote of private sector workers, may of whom are on Government contracts too.
Killing the final salary scheme will come but it will be no short term financial panacea.
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I’m shocked and yet again dismayed to read all the people on here saying they wish they were paid the same as the private sector. Some of you are in for a real shock when you leave, most of the pilots will be ok, some of the officers will but not all and as for the rest of you .... IT IS NOT GOLD PLATED OUT HERE. I’ve just had Sqn Ldr ops guy who has just started work under me and he was happy to be able to get £29K, he has had a real shock.
I recently (2 years ago) worked for a large defence contractor in a position equivalent to Flt Sgt / WO and was on £23k. I know a lot of SNCO’s and above who come out and can only get jobs paying around 20k, and then I read (again) on prune how people wish they were paid the same as us civvies. OK some ex guys have the pension, but please, when you all come out, get back on here and tell us what it’s really like, not all the BS the resettlement people tell you.
I recently (2 years ago) worked for a large defence contractor in a position equivalent to Flt Sgt / WO and was on £23k. I know a lot of SNCO’s and above who come out and can only get jobs paying around 20k, and then I read (again) on prune how people wish they were paid the same as us civvies. OK some ex guys have the pension, but please, when you all come out, get back on here and tell us what it’s really like, not all the BS the resettlement people tell you.
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Interestingly, or irritatingly, not Senior CS who signed on to retire at 60 now have to resign at 60. The option to continue to 65 has now become the expectation and "default" position.
Best to bugger off at the earliest option before the rules silently change, again.
Best to bugger off at the earliest option before the rules silently change, again.
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Rigger totaly agree have over the years seen many ex servicemen when leaving the services suddenly get the reality check of what the real world is willing to pay them compared to what the armed forces is willing to pay them.
Same goes for civil servants. My wife who works in local government but came from an industry background sees how people in Local Government think they are worth their comparable to industry salaries but don't have the levels of responsibility or risk someone in the same job in industry has. And I would say the same goes in the NHS.
Public service is a very different beast from industry in some areas the levels of responsibility are way ahead of industry in others not so. Its not helped by Govt amalgamating the pay systems to try to make pay fairer/simpler.
If I was in the forces doing the job i do now even with x factor taken away I would be about 3-4,000 better of a year. If I worked in Private sector I would have less responsibility as the patients they see are not usually as life threatening I would be 1-2,000 worse off. But how can some of the management grades justify their salaries? The chief Exec of an NHS trust isn't as exposed as the Chief Exec of a Buissness he is more like the Branch manager. Maybe the govt needs to look at the realies of some senior public sector jobs and face the truth that the huge salaries, bonuses and perks don't bring in Good management from the private sector as the good management in the Private sector doesn't always have the skills to run a public service. Or if they are that good Industry will always pay more to retain them.
Same goes for civil servants. My wife who works in local government but came from an industry background sees how people in Local Government think they are worth their comparable to industry salaries but don't have the levels of responsibility or risk someone in the same job in industry has. And I would say the same goes in the NHS.
Public service is a very different beast from industry in some areas the levels of responsibility are way ahead of industry in others not so. Its not helped by Govt amalgamating the pay systems to try to make pay fairer/simpler.
If I was in the forces doing the job i do now even with x factor taken away I would be about 3-4,000 better of a year. If I worked in Private sector I would have less responsibility as the patients they see are not usually as life threatening I would be 1-2,000 worse off. But how can some of the management grades justify their salaries? The chief Exec of an NHS trust isn't as exposed as the Chief Exec of a Buissness he is more like the Branch manager. Maybe the govt needs to look at the realies of some senior public sector jobs and face the truth that the huge salaries, bonuses and perks don't bring in Good management from the private sector as the good management in the Private sector doesn't always have the skills to run a public service. Or if they are that good Industry will always pay more to retain them.
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Originally Posted by Rigger1
.... IT IS NOT GOLD PLATED OUT HERE. I’ve just had Sqn Ldr ops guy who has just started work under me and he was happy to be able to get £29K
Personally, I was debating leaving or staying. I'm in until 55 and would have to PVR but any hint of not getting my pension until 60 or 65 and I'm off NOW!
I can see this being a HUGE retention issue, if you are past your IPP then why stay? If you are under 30 then why stay any longer for a poor pension? Leave sooner rather than later and, by the time that you retire, you will be higher up in the new company.
Now, if they increase our pay by the 10% that it is abated (yes, our scheme isn't truly non contributory) then we can take out private pensions with the extra money. Chance of that? Zilch, it's being paid to RBS and Lloyds staff in bonuses as we speak!
Also, if they change our pension scheme from the one to which we contracted, can we take the CETV to a new scheme!??? Doubt it!
Nope, definitely time to go!
Ah - but he's not now spending 4-6 months of every year living in a **** hole in the desert and getting shot at!!
CG
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Obviously spoken by someone who has not had the sh*t shelled out of them in Basrah then....
They simply could not get away with this. There is a rather strict no retrospection rule.
What I think is more likely is a change in the rules for those joining in the near future...
Far easier (legally) to change for those that have not yet signed up.
As for where they will get the cash from, I hear the BOE are firing up the printing presses as we speak, after the B*stards that pr00ne has voted for have led us down into the worst economic crisis in the past 90 years.
They simply could not get away with this. There is a rather strict no retrospection rule.
What I think is more likely is a change in the rules for those joining in the near future...
Far easier (legally) to change for those that have not yet signed up.
As for where they will get the cash from, I hear the BOE are firing up the printing presses as we speak, after the B*stards that pr00ne has voted for have led us down into the worst economic crisis in the past 90 years.
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Not gold plated but ok
In reply to Rigger 1.
It is not gold plated out here, but its ok. If I include the pension I am on considerably more than when I left, slightly under if I dont. But I am not going OOA.
Still paying 40% tax on a big chunk .......
Had 2 pay rises since joining the company, with more responsibility come greater rewards - and risks.
No mortgage, no one shoots at me (this week anyway), organise my own trips and then have transport and accomm etc booked for me.
It is not gold plated out here, but its ok. If I include the pension I am on considerably more than when I left, slightly under if I dont. But I am not going OOA.
Still paying 40% tax on a big chunk .......
Had 2 pay rises since joining the company, with more responsibility come greater rewards - and risks.
No mortgage, no one shoots at me (this week anyway), organise my own trips and then have transport and accomm etc booked for me.
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Rigger,
That was a most refreshing change from the usual "I earm way more now that I used to" fiction that the majority of ex serviceman posting on Pprune somehow feel the need to share with us
That was a most refreshing change from the usual "I earm way more now that I used to" fiction that the majority of ex serviceman posting on Pprune somehow feel the need to share with us
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Have to say that in my experience, the jobs that me and my colleagues do are paid at least 40% less than comparable jobs in the private sector. We've had some issues with recruiting, until now that is as the economic downturn has made the public sector more attractive.
Depends entirely upon what career you choose. Doesn't take away the fact that traditionally the pension was a key draw to public service and the government of the day is going to have one nasty shock if the scheme is completely reformed.
Although I have to say that many departments have reformed their pensions and ended the final salary scheme up to a decade ago. It's the old, not-so old hands mid-career, retired military who join the civil service and those just below SCS that are going to be the problem areas.
Depends entirely upon what career you choose. Doesn't take away the fact that traditionally the pension was a key draw to public service and the government of the day is going to have one nasty shock if the scheme is completely reformed.
Although I have to say that many departments have reformed their pensions and ended the final salary scheme up to a decade ago. It's the old, not-so old hands mid-career, retired military who join the civil service and those just below SCS that are going to be the problem areas.
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I recently (2 years ago) worked for a large defence contractor in a position equivalent to Flt Sgt / WO and was on £23k. I know a lot of SNCO’s and above who come out and can only get jobs paying around 20k, and then I read (again) on prune how people wish they were paid the same as us civvies. OK some ex guys have the pension, but please, when you all come out, get back on here and tell us what it’s really like, not all the BS the resettlement people tell you.
