Public sector pensions

[therealjr]

So as not to hijack another thread:
Chris wrote











Re: American Elections

« Reply #5 on: Today at 12:29:13 PM »

Quote


Without wishing to detract too much from the thread: http://www.express.co.uk/posts/view/356167/-1-200-a-year-tax-bill-over-public-sector-pensions

There are other articles with more dramatic flair (ala Daily Mail) - but the figures remain the same, and worryingly high.  Over a third of what we spend each year on the entire NHS, just to support pensions.  The figures have been unworkable for quite some time, though the union types will of course disagree.

However, it will be interesting to see what Ed Milliband does when in power.  I do believe he may win the next election, as people will be hurt by the cuts, and they (labour) will of course win because people will vote against the incumbents that presided over the cuts.  He daren't lose the support of the unions and suggest public pension reform (the dramatic reform that is needed), and the timebomb of costs spiraling out of control in this area alone will arrive right in the early years of the next government (if we have no election before 2015).

Times may be hard now with the cuts, and they haven't even started yet.  Interesting times ahead

[therealjr]

Firstly lets be quite clear what we are talking about here because the term 'public sector pensions' covers a wide area.

Local government pensions work pretty much the same way as a private pension does, in that as a 'member' you pay into a pot, that money is invested in the stock market and other such areas and the resulting fund is used to pay the pensions.
These scheme were so succesful that in the 80's Mrs T told local government pension schemes that as they were awash with money the employers (the councils)  could take a 3 year contributions 'holiday'. This effectively hid the real impact of the cuts she made in local authority spending.

Now other public sector pension such as the police nurses etc don't use this model. They pay into a pot and that pot is used to pay out the pensions. Now thats fine when you are employing thousands of policemen and nurses etc and they are all paying in to the pot. The trouble comes when you make cuts to the number of staff and fewer people are paying in. You also have the crazy situation in the police force where a serving officer retires, draws his pension and then is re employed by the police in an admin function which broadly compares to what he was doing as a policeman. Suddenly he is a 2 fold drain on the scheme because he is receiving his pension and not contributing in his new post.
Add to that the demographic time bomb that we are all living longer and thus drawing our pensions longer and you can quickly see where the problem is.

Now what I don't know is why the organisations using model 2 for their pension schemes don't simply move to model 1. it works for the LGPS and for private suppliers like Aviva so why not them

[Fly]

Enjoy your evening gentlemen 

Just a quicky, when I left the pit I had an estimated £23,000 in my pension fund.
AFIAK it's currently estimated at about  £15,000.
Is this the typical small print, investments can go down as well as up.
When I'm 60/65 will this have diminished to considerably less. £2000
Who's taking my pension money ?
Why are bankers allowed to make decisions using my money and leave me with nothing.
I paid into the MPS, who's creaming it.

Greatrix fell for his own greed. Seperate thread on here somewhere I think.