Civil Service Pensions

[P.K.]

I paid 11% of my wage, every week, for 39 years - to pay for my pension. I am informed that to get my money back I will need to live to 83 but I am not sure how accurate that is.

 

I - like all Police Officers - paid for my own pension at a much higher rate than most. I am indeed fortunate to be in the job I now have, but I work for that wage and I make sure I put in the effort and hours to give value for money, like I have all my working life.

True. But weren't your contributions higher because of your earlier retirement date?

 

In the private sector "average scheme" if you retire early (pre-65) you lose 3% of your pension for every year before normal retirement date. So if you leave at 50 you lose 15 x 3 = 45% or nearly half. As you only pay in at 2% p.a. you would effectively lose 22.5 years worth of contributions or about half your working life. Unlike the Scribbling Servants who can go earlier with no penalties?

 

Just what % of salary do the Manx public sector pay into the scheme anyway? Because clearly it's not enough...

[nipper]

There seems to be some controversy over whether the current schemes are costing the taxpayer through general revenue £44 million or £30 million per annum. Either way this is a huge amount.

This is the Isle of Man mate. There's no controversy when it comes to money. £44,000,000 and £30,000,000 are quite the same thing. A pound sign, a number that needs more than two hands to count followed by a lot of those zero thingy's.

 

You want proof of how Government and Civil Service control our money?

 

New Hospital is a good one. IRIS is too - proving a financial farce. Oh and that Power Station and the Gas Pipeline - just start a job and chick money at it. Government Buildings stands there as another entirely appropriate 'haven't a clue you' example. There are, and will be more, many others.

 

. . . . until the money runs out and the world find out about us.

 

I'm a late entrant into the public sector pension lark, and will only get a certain number of qualifying years in, so I'll HAVE to keep working long after retirement age.

 

The Manx Radio subvention was mentioned on Mandate this morning. It will soon be up to a £million a year. I hadn't considered of course that Manx Radio employees would be rewarded with a public sector pension too

[manxman8180]

In a round about way don't we all subsidise each others earnings / pensions?

 

A public servant will buy goods / services putting money into the pockets of employers, who in turn pay salaries. If those companies have a pension scheme, then a percentage of both the salaries and Company earnings will be paid into a pension fund.

 

Joe Bloggs pays taxes (effectively a charge for services) which is then paid as salaries to people to deliver those services. A percentage is then.....blah....blah....blah

 

To emphasise the point, when I used to work with customers for a 'high profile' local company, the odd irate customer would like to remind us that '...I pay your effing wages....' as if this gave them a right to be a complete knob jockey.

 

 

 

So, lets all hold hands and chant in harmony. We are as one!

[manxman8180]

I paid 11% of my wage, every week, for 39 years - to pay for my pension. I am informed that to get my money back I will need to live to 83 but I am not sure how accurate that is.

 

I - like all Police Officers - paid for my own pension at a much higher rate than most. I am indeed fortunate to be in the job I now have, but I work for that wage and I make sure I put in the effort and hours to give value for money, like I have all my working life.

True. But weren't your contributions higher because of your earlier retirement date?

 

 

 

I know a few Police Officers and the standard contribution appears to be 11%. IIRC the Police system does not rely on Retirement age, but rather years service, with 30 being seen as a full shift. So I guess DUdley worked quite a bit in excess of what he 'had' to.

 

In the private sector "average scheme" if you retire early (pre-65) you lose 3% of your pension for every year before normal retirement date.

....snip.....snip......Unlike the Scribbling Servants who can go earlier with no penalties?

 

Most Public Servants are on a retiremtn age of 60, although they can work longer. And I'm pretty sure there are actuarial reductions if you go early, although this may not apply if you have a 'full' 40 years in.

 

Just what % of salary do the Manx public sector pay into the scheme anyway? Because clearly it's not enough...

 

Think it may vary but it used to be 1.5% (effectively non contributory as a penison, this percentage was to cover family benefits IIRC), this was changed in the last year or two, increasing to 3.5%, or you could stay at the lower rate and give up certain benefits.

[manxman2]

I work for this government and am sick of people saying they are subsidising my pension. i have paid into this scheme for 22 years and now find that they want to mess with my future. our pension fund has been used to pay for several capital projects and now they realise there is no money left in the pot. they paid for the MEA, IRIS, the hospital, the prison, and now the airport extension. why should we be punished for this governments mismanagement? why have the mhks opted out when you are funding them totally, they pay no contributions whatsoever towards their pension. they picked on us because we are an easy target, but this will ruin the health service on this island, and with the end of the health agreement with the uk where will you go? i am lucky enough to have sold my house and will be taking my pension back to the uk where farmers and shopkeepers are'nt allowed to waste public money.

 

100% agree with your statement .. it was due to fund shrinkage that the government started all the population expansion to start with back in the 80s they had to keep expanding the collection of both employer and employee N.I. contributions i remember quite clearly a discussion i had back then with my local mhk about the subject .. they knew then that raping the fund would end in tears.

[Lost Login]

I would agree if there was equality across the board with regard to terms and conditions. But there is not. Do ministers gets the same salary as the chief executive of there relevent department. As far as I am aware they do not. Do MHK's have the same Job security as the average civil servant? Again no, a Minister can be sacked at any time with no right to cliam unfair dismissal, and every four years any MHK can loose their seat. It should also be remembered that by being an MHK or a minister an individuals salary might be less than would be the case if they had retained there previous employment. Equally it might be higher.

 

Job Security in my opinion is very important. In compring public v private employees pensions and remuneration is any allowance made for this when determining pay and conditions as I am sure many in the private sector at present would gladly take some level of pay cut for the security of a job for life. This is especially the case when from the outside it appears that your job is secure no matter how good you are at it. In the private sector do you think that if somebody had cost his employer millions because they did not hedge a foreign currency transaction they would still be in their job?

 

So yes it may be nice to try and bring politicians pensions into this, but in my view it is a total red herring as it is like comparing apples to pears. Although I agree they probably do need to a seperate be review. I would also point out I am not related or close friends with any MHK past or present and that in referring to civil servants I am referring to blue and white collar workers in the various government departments rather than police and nurses etc even though they may be Government employees.

 

 

Thing that riles me about this is the disparity between the schemes - the usual old boys get a much better deal than the proles as always, and the politicians who will decide this are way above having THEIR schemes looked into. Equality on Animal Farm springs to mind.

[Lost Login]

You may have paid in for 22 years and I have no idea at what level, but do you have any idea what your "government" pension is or will be compared to what you might have got paying the same amount into a private pension plan.

 

There is where the concern is of some. It is not that Govt workers do or have not contributed to a pensioon scheme, but that the contributions are "low" when compared to what an individual would have to pay for a similar pension.

 

Now ignoring any argument about altering agreed terms and conditions it might be seen that the decent pension is in part recompense for a lower level of salary as a public employee. But to offset this there mau be benefits in resopect of job security, holiday entitlement, paid sick or maternity leave etc. Focusing purely on the pensions does in my opinion give a potentially distorted view.

 

 

 

 

I work for this government and am sick of people saying they are subsidising my pension. i have paid into this scheme for 22 years and now find that they want to mess with my future.

[manshimajin]

Now ignoring any argument about altering agreed terms and conditions it might be seen that the decent pension is in part recompense for a lower level of salary as a public employee. But to offset this there mau be benefits in resopect of job security, holiday entitlement, paid sick or maternity leave etc. Focusing purely on the pensions does in my opinion give a potentially distorted view.

I think that public service employees may believe that they are paid less than their private sector equivalents. However every survey I have seen indicates that over the last 10 years or so public sector pay for equivalent jobs has not been less than in the private sector - and in many cases outstrips it. But this is not the real issue.

 

If the employee contribution rate for a core defined benefit pension that is RPI adjustable and provides 50% of final average salary after 40 years service is 1.5%, as stated in the Hymans/Robertson report, that is incredibly generous and way below the actual funding levels required to adequately fund this level of benefit.

 

I suspect that what a lot of people in the private sector are saying is that given the economic situation it is not unreasonable to cease the long term practice of funding public sector pension deficits from general revenue. Instead employee contribution rates should be set, as has to happen in the private sector, at a level that adequately funds the benefits of the scheme without extra payment from the public purse.

 

This is a problem that has been festering internationally in public sector schemes for a long time (I don't mean here). Politicians have felt that it is OK to dip into tax revenue to cover the deficits in public sector pensions - and their own. When it came to compensating uderfunded or bankrupt private sector pensions in the UK (for example) they were nothing like as generous with the general revenue and dragged their heels for years on the matter.

 

So when Manxman 8180 say "So, lets all hold hands and chant in harmony. We are as one!" let's really be as one and evryone private or public sector employee contribute at the correct rate to pay for what we receive.

[manxman8180]

Dudley perhaps you'd like to take the 45% loss my stock market linked private pension achieved last year.

 

You must remember all the warnings attached to market linked funds........

 

The value of your investments can go down as well as up. You may not get back everything that you invest!

 

You could have equally made a killing.

 

I think its such good value having to double my personal contributions to compensate for this whilst I'm paying for every government worker to have a nice comfy retirement.

 

I guess they probably think that too....

[b4mbi]

My wish list:

 

In private sector pensions, the employee takes all the risk regarding investment performance. In public sector pensions, the taxpayer takes all that risk. I'd like it to be shouldered by the employees, just as now happens, almost without exception, in the private sector.

 

Employee contributions also need to increase as a percentage of the overall contribution.

 

And the number of people employed in the public sector needs to come down.

 

^ exactly what he said - agree 100%

[manshimajin]

Dudley perhaps you'd like to take the 45% loss my stock market linked private pension achieved last year.

 

You must remember all the warnings attached to market linked funds........

 

The value of your investments can go down as well as up. You may not get back everything that you invest!

 

You could have equally made a killing.

 

I think its such good value having to double my personal contributions to compensate for this whilst I'm paying for every government worker to have a nice comfy retirement.

I guess they probably think that too....

Good to see you believe we are all in this together - as you said above "In a round about way don't we all subsidise each others earnings / pensions?" Only slight problem is that some subsidies are more equal than others!

[triskelion]

I work for this government and am sick of people saying they are subsidising my pension. i have paid into this scheme for 22 years and now find that they want to mess with my future.

 

If you are a civil servant you have not paid into the scheme for 22 years. As I understand it you have paid 1.5% of salary to cover the death benefit you would get if you died before retirement age - which if you retire single you get paid back to you as a lump sum anyway. You have actually paid nothing into your 'pension' because your pension is not contributory. Please don't delude yourself that the very small amount you are actually paying is paying anything at all towards your pension benefits.

You've based your rant on the idea that he is a civil servant, which he has not said he is, and you even acknowledge the possibility yourself that he isn't one.

 

There seems to be a large sentiment here along the lines of 'how dare public sector workers complain about changes to their pension when it is better then my private one.'

 

Couple of things; I'm not sure how we would be better off if public pensions suffered the same insecurities as private ones. Secondly, there doesn't seem to be a great deal of acknowledgement that many public sector workers contribute a great deal to their pensions, and the 1.5% contributed by some civil servants seems to be unfairly used as a bench mark, even though the vast majority of those working for the Government are not civil servants. Thirdly, the Isle of Man is hardly unique in its current public sector pension arrangements, and if it becomes uncompetitive we can expect there to be brain drain. This will lose us much of what talent we do have, with the places filled by people who strangely decide the pension structure isn't so inequitable after all.

[thesultanofsheight]

Thirdly, the Isle of Man is hardly unique in its current public sector pension arrangements, and if it becomes uncompetitive we can expect there to be brain drain.

 

To where?

 

I have the upmost respect for many government workers, but you have to accept that a big proportion of them are totally unemployable in the real world and even if that were true who is recruiting at the moment to take these invaluable assets onto their workforce?

[triskelion]

Thirdly, the Isle of Man is hardly unique in its current public sector pension arrangements, and if it becomes uncompetitive we can expect there to be brain drain.

 

To where?

 

I have the upmost respect for many government workers, but you have to accept that a big proportion of them are totally unemployable in the real world and even if that were true who is recruiting at the moment to take these invaluable assets onto their workforce?

I'm not talking about the cashier at the tax office or the receptionist at the Manx Museum - I meant doctors, nurses, teachers etc.

[thesultanofsheight]

Thirdly, the Isle of Man is hardly unique in its current public sector pension arrangements, and if it becomes uncompetitive we can expect there to be brain drain.

 

To where?

 

I have the upmost respect for many government workers, but you have to accept that a big proportion of them are totally unemployable in the real world and even if that were true who is recruiting at the moment to take these invaluable assets onto their workforce?

I'm not talking about the cashier at the tax office or the receptionist at the Manx Museum - I meant doctors, nurses, teachers etc.

 

People with actual skills.

 

I think everyone else was talking about civil servants, people with no actual skills.