# Pension contributions worth  29% of salary for pre 2013 public servants



## Brendan Burgess (4 Mar 2019)

https://www.independent.ie/business...st-from-tax-reliefs-on-pensions-37874590.html

Private sector workers in DC schemes get an average of 7% employer contribution.


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## RETIRED2017 (4 Mar 2019)

there are a lot of workers in the public service on low incomes so any tax breaks on there contributions is 20% ,

The thing that has hurt the private sector workers the most is they are not enrolled in a pension once they start work like there public service brothers and sisters,

I would say a total of around 14% contributions by employer/employee for people in the private sector earning around the same wage as a grade 3 public servant 38 to40K would give them the same pension as a grade 3 public servant, once you include state pension,( i suspect it is a lot lower than 14% if I remember correctly the 14% was leaving the state pension out of it)

i think this is where the auto enrollment should have focused on,

 BrendanI think you made a submission ,

I remember at the time being very impressed by the people who ran the public submissions,

They thing that is most needed and was/could not be taken into account was linking the two together so as to bring the total pension up around the same for both public and private earning around the same as a grade 3 public servant.

Planning to have funding in place to pay out the private sector /public pension seeing they pay the same amount 14.75 % of payroll into the fund,
It was as high as 18.5 since the put the public service /private sector on the same payroll contributions since 1994/5 they should have the same guaranteed state contributory pension,seeing they pay the same amount in,

It is only when people start looking at it the way I suggest you will be able to  compare both and plan to have funding in place ,


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## ashambles (4 Mar 2019)

Brendan Burgess said:


> https://www.independent.ie/business...st-from-tax-reliefs-on-pensions-37874590.html
> 
> Private sector workers in DC schemes get an average of 7% employer contribution.


The average would be skewed if it includes large contributions being made for very few people.
Since people with 0% contribution by employers are excluded from the 7% figure, atypically high contributions should also be excluded. For example one off pay offs to CEOs.

My own guess for a typical employee earning around 50k that an employer contribution would be more likely to be in the 5% range than 7%. (A sizeable difference after 40 years).

https://www.iapf.ie/news/pressreleases/default.aspx?id=6
This from 2015 seems to point to a lower than 7% figure as well:-

_A major survey of 6,430 Defined Contribution pension schemes throughout Ireland, undertaken by the IAPF in advance of their annual Defined Contribution Pension Conference on Tuesday, has found that the average total contribution being paid in amounts to just 11.1% of salary – with an average of 5.7% coming from the employer and 5.4% from employees._


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## RETIRED2017 (4 Mar 2019)

ashambles said:


> The average would be skewed if it includes large contributions being made for very few people.
> Since people with 0% contribution by employers are excluded from the 7% figure, atypically high contributions should also be excluded. For example one off pay offs to CEOs.
> 
> My own guess for a typical employee earning around 50k that an employer contribution would be more likely to be in the 5% range than 7%. (A sizeable difference after 40 years).
> ...


I know where A fund was put in place  back around 1985 capped at the same rate as a public sector telephonist which is around a grade 3 works out as good as a public servant pension including state pension  ,If i remember correctly it included back funding people to age 25 who were over this age when scheme started it was set at around 15% ,


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## Sarenco (4 Mar 2019)

The cost of pensions paid to retired public servants have gone from *€3.3bn in 2016, to €4.3bn next year*, according to Department of Public Expenditure and Reform figures.

Wow!  That's scary.


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## RETIRED2017 (4 Mar 2019)

Very badly written full of inaccurate info,

for a start most public servants because they are all paying pension contributions would be getting tax relief at 20%, and what is the first thing Charlie writes ,

This means that any move to reduce the tax reliefs will hit Government workers hard,prompting them to seek higher pay, speaks for itself,

Some lobby group is promoting this using the public servants ,I hope people can see through this ,


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## Itchy (4 Mar 2019)

Brendan Burgess said:


> https://www.independent.ie/business...st-from-tax-reliefs-on-pensions-37874590.html
> 
> Private sector workers in DC schemes get an average of 7% employer contribution.



Is it not worth even trying to verify the actual source anymore? Otherwise this place may as well be the comments section of the indo website?



> Private Sector
> Average employer DB: 22% pa
> Average employer DC: 7% pa
> Average employee DC: 5.4% pa
> ...





> Public sector superannuation benefits, less gross superannuation and Pension Related Deduction contributions received. The latest published estimate for 2018 for this net cost is €1.9bn.
> The current €1.9bn expenditure on superannuation benefits (net of employee superannuation contributions) will increase by €900m to €2.8bn in real terms by 2020 and by a further €1bn to €3.8bn by 2025.





Sarenco said:


> The cost of pensions paid to retired public servants have gone from *€3.3bn in 2016, to €4.3bn next year*, according to Department of Public Expenditure and Reform figures.
> 
> Wow!  That's scary.



€1bn! The accrued-to-date liability for State pension schemes at 31 December 2015 was €231 billion. Actuarial review of the Social Insurance


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## Sarenco (5 Mar 2019)

Itchy said:


> €1bn! The accrued-to-date liability for State pension schemes at 31 December 2015 was €231 billion. Actuarial review of the Social Insurance


What does the Social Insurance Fund have to do with pensions paid to retired public servants?


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## RETIRED2017 (5 Mar 2019)

Sarenco said:


> What does the Social Insurance Fund have to do with pensions paid to retired public servants?


Glad you asked
Public servants hired before the end of Dec 1994 seen around  1.96% of payroll taken and paid into the social Insurance Fund, there employers paid none, and all  pension paid out came from direct taxation,
when they retired,(total paid in by employers/employee social insurance fund 1.96%,

A Public Servant  grade 3 public servant after 40 years on 38k would get a pension of 19K from direct taxation before 1995


Public servants hired after the start of 1995 seen around 18.5% payroll taken and paid into the Social Insurance Fund , (seme as a private sector worker and there Employers,


A public servant grade 3 retiring after 40 years on 38K would get a pension of 19K 12.5 K contributory pension same as a private sector worker and 6.5k from direct taxation,after 1995


Note the Government/employer of the  public servants hired before 1994 would have taken the public servants % of payroll pension contribution and pocketed/squandered it for the last 40 years,along with having no fund built up over the employees lifetime to meet undertakings given in there contract of Employment,


Note the Government/Employer of the public servant hired after 1995 would have taken the public servants contribution % of payroll pension contributions along with there own contribution of around 10.75% for state pension and squandered it,


The real pension problem for public/private PAYE Workers is the squandering of there/employers contributions over there working life, others getting the same pension and paying in very little some only paying around 500 euro for 10 years can get the same state pension at present,

More than likely it is the people who paid in very little who are behind the artical,

The next time the Troika arrive it will be to sort out the mess The Charlies of this World Ignore,


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## RETIRED2017 (5 Mar 2019)

Itchy said:


> Is it not worth even trying to verify the actual source anymore? Otherwise this place may as well be the comments section of the indo website?
> 
> 
> 
> ...


It is the accrued-to-date squandered of paye contributions which is the real problem long term,private/public sector,
If you look back at employer/employer  pension funds 7% from employer and 7% from employee would more than cover pensions as good as the public service once it is capped/linked to grades ,


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## Purple (5 Mar 2019)

RETIRED2017 said:


> It is the accrued-to-date squandered of paye contributions which is the real problem long term,private/public sector,


They are spent on current expenditure such as paying the salaries of State employees and welfare.
What do you propose is cut in order to ring-fence those contributions for investment in future pension liabilities?


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## RETIRED2017 (5 Mar 2019)

Purple said:


> They are spent on current expenditure such as paying the salaries of State employees and welfare.
> What do you propose is cut in order to ring-fence those contributions for investment in future pension liabilities?


I suspect they would be a lot lower if taxation had to be set aside to fund the accrued-pension expectations of  private sector workers pensions,and at the same time meet the employment contracts of public service workers pensions with funding in place,,
Purple in other you cannot have it both it both ways ,I have no problem with living in the real World , Irish people/Midia are not Questioning the need to put aside funds to meet future requirements,
  working PAYE people need to stand up and question the people who are squandering the fruits of there work without feeling guilty for doing so,


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## Purple (5 Mar 2019)

RETIRED2017 said:


> I suspect they would be a lot lower if taxation had to be set aside to fund the accrued-pension expectations of  private sector workers pensions,and at the same time meet the employment contracts of public service workers pensions without funding,
> Purple in other you cannot have it both it both ways ,I have no problem with that do you,


I'm not sure what you are saying. If it is that private sector employees should also fund their State pension then yes, I agree. I also think the non-contributory State pension should be much lower than the contributory one.


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## RETIRED2017 (5 Mar 2019)

Purple said:


> I'm not sure what you are saying. If it is that private sector employees should also fund their State pension then yes, I agree. I also think the non-contributory State pension should be much lower than the contributory one.


Hi purple I will come back to you this evening ,
Even retired people have to do some work you know,


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## Itchy (5 Mar 2019)

Sarenco said:


> What does the Social Insurance Fund have to do with pensions paid to retired public servants?



Capital mismanagement on a grand scale?


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## Itchy (5 Mar 2019)

Purple said:


> What do you propose is cut in order to ring-fence those contributions for investment in future pension liabilities?


 I think that would be one for Paschal. 

Are you in favour of appropriate fiscal policy or not?

The bottom line is, provision should be made for future liabilities as they accrue. This is just as appropriate for the private sector as for the public sector. Currently it is the State's version of the endowment mortgage!


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## Sarenco (5 Mar 2019)

Itchy said:


> Capital mismanagement on a grand scale?


But public sector pensions aren't paid out of the (entirely notional) social fund!

The article gives the escalating cost of pensions paid to retired public sector workers.  You seem to be disputing those figures by referencing contributions paid by current public sector workers and citing an actuarial report on the social fund.  Neither is relevant to the cost of pensions paid to retired public sector workers.


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## Itchy (5 Mar 2019)

Sarenco said:


> But public sector pensions aren't paid out of the (entirely notional) social fund!
> 
> The article gives the escalating cost of pensions paid to retired public sector workers.  You seem to be disputing those figures by referencing contributions paid by current public sector workers and citing an actuarial report on the social fund.  Neither is relevant to the cost of pensions paid to retired public sector workers.



Im sorry if you misunderstood me Sarenco, the 'real money' cost increase of PS pensions (that you expressed amazement at!) has arisen because of the management (or lack of) the PS pension liability to date. I was trying to highlight to you that today's 'real money' cost is the manifestation of the significant pension liability that exists and equate that to the far larger liability (the SIF) that has arisen as a result of the same historical treatment of that  state pension liability (which is entirely separate from retired PS workers). I guess the point is, if were accruing a liability we should be reserving for it.

I'm not disputing the figures, they represent what they represent. I am commenting on the deliberate de-contextualising of the figures and, more broadly, the 'pump-and-dump' method of driving discussion rather than the presentation of some form of reasonable analysis (which is why were here and not in the indo comments section ).


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## NoRegretsCoyote (5 Mar 2019)

I looked very quickly at the report.

If I understand correctly they took no account of PRD (aka pension levy) paid by public servants since 2009. (If you don't know what I'm talking about stop reading).

This makes a huge difference, especially for high PS earners. A public sector worker on €100,000 pays €7,392 in PRD, and receives €92,608 net of PRD.

An honest public-private comparison would compare a private salary with a public salary net of PRD.


Please correct me if I am wrong.


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## Sarenco (5 Mar 2019)

Why would you take account of PRDs when calculating the cost of pensions paid to retired public sector workers?

Why would anybody reference the social fund?

Neither PRDs nor the social fund have anything whatsoever to do with the current cost of pensions paid to public sector workers.  Surely that's obvious?

The article suggests that the cost of these pensions to the exchquer will increase by €1billion - or close to 25% - in only four years.

Yes, I find that amazing.


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## torblednam (6 Mar 2019)

Sarenco said:


> Why would you take account of PRDs when calculating the cost of pensions paid to retired public sector workers?
> 
> Why would anybody reference the social fund?
> 
> ...



The article is about more than the €1bn that you're so amazed by (HINT: Look at the thread title).

I think coyote's point in the post above yours, is that the 29% figure quoted is very misleading, in circumstances where the PRD (which is progressive in nature) is not factored in, either as part of the employee contribution or by deducting it from the salary figure against which you're calculating your %. The PRD has, after all, been converted into a superannuation contribution from the start of 2019.


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## Purple (6 Mar 2019)

Itchy said:


> I think that would be one for Paschal.
> 
> Are you in favour of appropriate fiscal policy or not?
> 
> The bottom line is, provision should be made for future liabilities as they accrue. This is just as appropriate for the private sector as for the public sector. Currently it is the State's version of the endowment mortgage!


There should be no defined benefit pensions and everyone should provide their own pension, funded by them on their own or with a contribution by their employer.

The State pension (OAP) should operate in the same manner; you pay PRSI and it goes into your pension fund. If you can’t afford that then the State pays into a pension fund for you.

We can’t keep mortgaging our children and grandchildren’s futures to pay for our unsustainable pensions. It is immoral.


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## NoRegretsCoyote (6 Mar 2019)

Purple said:


> The State pension (OAP) should operate in the same manner; you pay PRSI and it goes into your pension fund. If you can’t afford that then the State pays into a pension fund for you.



Who would manage the fund? Would it be done on a market basis? What would the fees be? What would happen if the fund massively underperformed over the years?

These questions are very hard ones and usually ignored by enthusiasts for privatising everything.

You can indeed have massive state pension funds managed on an arms-length basis (common in some parts of Europe) but the state will always have to prop them up if they underperform due to poor management or high fees.

The contributory state pension is _administratively _very cheap to provide compared to many DC schemes.


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## RETIRED2017 (6 Mar 2019)

torblednam said:


> The article is about more than the €1bn that you're so amazed by (HINT: Look at the thread title).
> 
> I think coyote's point in the post above yours, is that the 29% figure quoted is very misleading, in circumstances where the PRD (which is progressive in nature) is not factored in, either as part of the employee contribution or by deducting it from the salary figure against which you're calculating your %. The PRD has, after all, been converted into a superannuation contribution from the start of 2019.


The problem I have with the PRD And public servants Pension contributions is it not saved and invested to provide for there future pension, same applies to public servants hired after 1995 with there Employers PRSI contributions which would be around 10.75 ,

The problem for all of us is with the Government and all parties  have no problem taking this money public/private sector and giving it back again in pay rise,and Benefits to others leaving nothing to future fund pensions for the people who it was taken from,

When the Government and the Unions  sat Down to negotiation the last pay agreement the had a look to see how much money was available to pay any Increase ,
The money available included employees own pension contributions there PRD contribution And there PRSI  contributions there employers contribution to pay there own future pension,

In other words some of there own pay increase came from money which should have have being invested to pay there future pensions, This problem exists for both private sector workers and public sector workers where there money is taken for there future pensions and being spent,


The future pension Issue for private sector workers and the spending of there contributions is a bigger problem,


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## NoRegretsCoyote (6 Mar 2019)

@RETIRED2017 

This is not really true. The state spends money on productive infrastructure which allows for future economic growth which, in turn, can be taxed.

If the state was investing nothing you would have a point but, the last time I checked, the state was investing something like 6% of GNI*.

This is not to defend pay-as-you-go. But if you privatised pensions you would have:
a) the state collecting billions in workers' wages and investing them on financial markets
b) the state then borrowing billions from financial markets to pay for infrastructure to be used by workers


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## Purple (6 Mar 2019)

NoRegretsCoyote said:


> Who would manage the fund? Would it be done on a market basis? What would the fees be? What would happen if the fund massively underperformed over the years?
> 
> These questions are very hard ones and usually ignored by enthusiasts for privatising everything.
> 
> ...


All valid questions; there is no easy solution. My starting point is that we have to stop mortgaging our children's future to pay for things we cannot afford today. We already stick them with the cost of the crash. We are still borrowing from them to pay wages, welfare and pensions today. We need to stop.


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## RETIRED2017 (6 Mar 2019)

NoRegretsCoyote said:


> @RETIRED2017
> 
> This is not really true. The state spends money on productive infrastructure which allows for future economic growth which, in turn, can be taxed.
> 
> ...


The state already collects billions from workers public/ private in so call pension contributions let it be through public servants pension contributions PRD and PRSI public/private sector, most is used to pay benefits away higher than other EU states ,what I am looking for is some to be invested for the people in the public/private sector so they know it will be there when they retire ,
Eaten bread is soon forgotten , The thinking on hear . seems to be a state  already suffering from obesity the cure is to make it morbidly obese for its long term health,
 most of the profits from private money invested  to build our toll roads goes to Spain,

A lot of the problems we have to day is because we are trying to grow faster than is good for us ,trying to make up for pay to go system,public servants pensions are a good example of this madness,If the pensions had to be funded already everyone would know the cost of doing so,

Are you saying Government investments to provide pensions for retiring private/public sector workers by the state,is already being managed so the first post is all hot air,

I can think of a few  projects the government are involved in which will use up the 6%GNI where will result in assets worth about 2%of GNI the day they are finished,
don't get on to me for over stating the 2% please,


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## Purple (6 Mar 2019)

The projected shortfall is up to €20 billion a year by 2070. 
That's 40% of what we take from all forms of taxation. Even index linked it is still a massive shortfall. 
By 2050 it is €15 billion. 
The reality is that we need to significantly increase social security payments from everyone with an income. We need to bring more people into the tax net and readjust our system so that contributions from low and middle income earners get closer to the EU average. In other words we need to broaden our tax base. Property tax, utility charges etc are all part of that picture. None of it will happen though as it is not populist.


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## RETIRED2017 (6 Mar 2019)

Purple said:


> The projected shortfall is up to €20 billion a year by 2070.
> That's 40% of what we take from all forms of taxation. Even index linked it is still a massive shortfall.
> By 2050 it is €15 billion.
> The reality is that we need to significantly increase social security payments from everyone with an income. We need to bring more people into the tax net and readjust our system so that contributions from low and middle income earners get closer to the EU average. In other words we need to broaden our tax base. Property tax, utility charges etc are all part of that picture. None of it will happen though as it is not populist.


Purple
The problem is if they do what you are suggesing it will get all squandered best to leave it where it is unless we embrace forward funding,

Taxpayers giving more money to a government unable to manage they unexpected extra tax they are getting for all of there taxpayers futures ?,


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## NoRegretsCoyote (6 Mar 2019)

Purple said:


> The projected shortfall is up to €20 billion a year by 2070.
> That's 40% of what we take from all forms of taxation. Even index linked it is still a massive shortfall.
> By 2050 it is €15 billion.
> The reality is that we need to significantly increase social security payments from everyone with an income. We need to bring more people into the tax net and readjust our system so that contributions from low and middle income earners get closer to the EU average. In other words we need to broaden our tax base. Property tax, utility charges etc are all part of that picture. None of it will happen though as it is not populist.



No one should be too dogmatic about these numbers. These projections are very sensitive to small changes to assumptions in productivity, migration rates, etc. (I used to work on this many years ago).

There are lots of policy responses. In Japan people are working longer and more women have entered the workforce.

You can increase taxes or just let pensions increase below inflation in due course. By global standards, a 70-year old in Ireland with only state pension and other benefits has a very good standard of living.


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## The Horseman (6 Mar 2019)

Purple said:


> The projected shortfall is up to €20 billion a year by 2070.
> That's 40% of what we take from all forms of taxation. Even index linked it is still a massive shortfall.
> By 2050 it is €15 billion.
> The reality is that we need to significantly increase social security payments from everyone with an income. We need to bring more people into the tax net and readjust our system so that contributions from low and middle income earners get closer to the EU average. In other words we need to broaden our tax base. Property tax, utility charges etc are all part of that picture. None of it will happen though as it is not populist.




I disagree with increasing taxes on everyone with an income. Our existing welfare system is too generous. We have people who point blank refuse to accept any responsibility for their life choices. I am working since the age of 13 and have to work until I am 68 (at the moment) before I can retire. Assuming I continue working I will have been working for 55 yrs and will be entitled to a State Pension (although how much that will be remains to be seen).

Through working hard, going to college, getting a professional qualification all paid for by myself with no state aid and investing to have a pension outside of a State pension. Any state pension I do get will be taxed so heavily I probably will end up only getting perhaps 20% after all taxes and charges. So for working 55 yrs I will get less of my state pension after tax than somebody who has never worked a day in their life!

I don't have an issue with those who genuinely need state help but I see it with my own eyes every single day where people are abusing the system and when or if caught face no real sanctions.

So I am trying to do the right thing and not be a burden on the State and I am trying to provide for myself in the future, we should then broaden our tax base which no doubt people on social welfare will be exempt, people in social housing will be exempt etc. If you can work and refuse to work because you can't hold down a job for whatever reason then fine, give these people food stamps, give a credit to their ESB account and a roof over their heads give then €10 a week to spend as they choose. if they need electrical goods then purchase it for them and deduct it from there €10 pocket money.

Exactly at what point do people actually say "sorry enough is enough". To say I am the squeezed middle income is a joke at this point. I have been squeezed so much my eyes are actually bulging at this point.

Rant over!


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## NoRegretsCoyote (6 Mar 2019)

The Horseman said:


> I probably will end up only getting perhaps 20% after all taxes and charges.



In what universe are you getting an 80% effective tax rate on your state pension?


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## Purple (6 Mar 2019)

The Horseman said:


> I disagree with increasing taxes on everyone with an income.


I said increase social security payments, not taxes. By European standards the taxes paid by high earners are too high and the taxes paid by low and middle earners are too low. Too much of our taxes are levied on labour (wealth generation) and our welfare rates are far too high to be sustainable. 

I think everyone who works should pay some tax (just like they did 20 years ago) and everyone should certainly pay social insurance on  all of their personal income (just like they did 20 years ago). 
I also think the marginal tax rate, including social insurance, should never exceed 45%.


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## The Horseman (6 Mar 2019)

NoRegretsCoyote said:


> In what universe are you getting an 80% effective tax rate on your state pension?



I said I will probably end up with only 20% who knows what the tax rates will be in 20yrs time. I suspect they wont be decreasing.


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## Purple (6 Mar 2019)

The Horseman said:


> I said I will probably end up with only 20% who knows what the tax rates will be in 20yrs time. I suspect they wont be decreasing.


Don't worry; there probably won't be a State pension for anyone who isn't a State employee.


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## The Horseman (6 Mar 2019)

Purple said:


> I said increase social security payments, not taxes. By European standards the taxes paid by high earners are too high and the taxes paid by low and middle earners are too low. Too much of our taxes are levied on labour (wealth generation) and our welfare rates are far too high to be sustainable.
> 
> I think everyone who works should pay some tax (just like they did 20 years ago) and everyone should certainly pay social insurance on  all of their personal income (just like they did 20 years ago).
> I also think the marginal tax rate, including social insurance, should never exceed 45%.



How do you fund an increase in social security payments if you don't increase taxes. I must be missing something.

With our so called progressive tax system you can be sure we will end up paying more tax not less. The property tax is a prime example of this. Your property tax is levied on the value of your house and has nothing to do with the size of your house. So two properties within a mile of each other could be charged different amounts simply because of the value of your property.

I definitely agree our welfare rates are too high to be sustainable but nobody is actually willing to say it. Look at the recent presidential elections in Ireland where Peter Casey was attacked for mentioning the brand new houses that were unoccupied, or Owen Keegan of Dublin City Council who suggested people are gaming the housing system as they are better on the HAP then they would be in a property offered by the Council (because it is not in their desired area). There were calls for him to resign for saying this.

We have those who will defend the indefensible.


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## The Horseman (6 Mar 2019)

Purple said:


> Don't worry; there probably won't be a State pension for anyone who isn't a State employee.


Exactly 55 yrs of contributions with nothing to show for it. Isn't Ireland just a wonderful place.


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## Purple (6 Mar 2019)

The Horseman said:


> Exactly 55 yrs of contributions with nothing to show for it. Isn't Ireland just a wonderful place.


Well at the moment you get the same as someone who never worked a day in their life so...


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## Purple (6 Mar 2019)

The Horseman said:


> How do you fund an increase in social security payments if you don't increase taxes. I must be missing something.


Yea; increase social security payments, make everyone pay the same percentage of their income in social insurance (i.e. pay it from the first euro earned) and reduce the higher marginal tax rate so that low and middle income earners start paying their fair share of income taxes. We can't keep expecting the rich to pay for everything, it ssimply isn't fair.


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## Purple (6 Mar 2019)

NoRegretsCoyote said:


> No one should be too dogmatic about these numbers. These projections are very sensitive to small changes to assumptions in productivity, migration rates, etc. (I used to work on this many years ago).
> 
> There are lots of policy responses. In Japan people are working longer and more women have entered the workforce.
> 
> You can increase taxes or just let pensions increase below inflation in due course. By global standards, a 70-year old in Ireland with only state pension and other benefits has a very good standard of living.


I agree with all of that. This is a big problem but it is a long term problem. Smallish changes now will make a big difference later. The changes to public sector pensions will have a very significant impact. 
We need similar reforms to other State pension provisions.


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## RETIRED2017 (6 Mar 2019)

the  reason you need to  reference the social fund is because for the last 34 years public servants along with there employer paid PRSI A1 contributions of of around 18% of payroll ,  down to 14% of payroll + usc  since 2010 like every other worker, because there work for the most part was secure there are no breaks in payroll payments,

Before 1994 we had Right-wing leaning Governments  which required public servants D Stamp  pay around 1.96%PRSI and there employer paid nothing towards there pension ,

 D stamp workers Paid what was required of them by the Government of the day , There is no point in wasting time and newspaper space on things we are not going to change, which brings me to the point ,D stamp workers even at 1.96% prsi paid more over 40 years than lots of private sector workers and the self employer ,


All  PAYE workers who went out to work once they had 10 years PRSI  got the Full State  contributory Pension, Public servants who paid 1.96% over 40 years paid more than someone in the private sector who gets a contributory pension after 10 years PRSI contributions,

All workers who went out to work once they had 10 years PRSI got what you could call a Defined Benefit pension of 12500 euro at present ,
The question is what % of the 29% salary do you take away to account of the 12500 state contributory pension,


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## Purple (6 Mar 2019)

RETIRED2017 said:


> The question is what % of the 29% salary do you take away to account of the 12500 state contributory pension,


The cost of funding a pension of €12,500 a year works out at €146.25 a week over 40 years.
A single person earning €90,000 pays a total of €7,671 in PRSI and USC so assuming that all of that went into a State pension pot (which isn't the case) they would just about fund their own State pension.
If funding for pensions only came from the PRSI pot, and taking into account that PRSI covers far more than just pensions, you'd have to be earning north of a quarter of a million a year to fund your own State pension.


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## NoRegretsCoyote (6 Mar 2019)

Purple said:


> The cost of funding a pension of €12,500 a year works out at €146.25 a week over 40 years.
> A single person earning €90,000 pays a total of €7,671 in PRSI and USC so assuming that all of that went into a State pension pot (which isn't the case) they would just about fund their own State pension.
> If funding for pensions only came from the PRSI pot, and taking into account that PRSI covers far more than just pensions, you'd have to be earning north of a quarter of a million a year to fund your own State pension.



This is nonsense. If you are going to make those comparisons you have to assume a rate of return.

Assume you contribute €6k a year in PRSI (including employer contributions) and the Irish government's 30-year borrowing rate is about 1.5% as it is now. After 40 years you have a fund of €325k which, I've seen written on AAM, is about enough to fund a state pension contributory.


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## Purple (6 Mar 2019)

NoRegretsCoyote said:


> This is nonsense. If you are going to make those comparisons you have to assume a rate of return.
> 
> Assume you contribute €6k a year in PRSI (including employer contributions) and the Irish government's 30-year borrowing rate is about 1.5% as it is now. After 40 years you have a fund of €325k which, I've seen written on AAM, is about enough to fund a state pension contributory.


I was using the Pension Authority Pension Calculator.
The current State pension is €12,912 so what would the cost of funding a pension of €12,912, net of the State pension be?
In order to do that on their calculator you need to look for a pension of €25,824 since they deduct the State pension from what you ask for. They say that you need to put in €7,100 a year over 40 years.


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## RETIRED2017 (6 Mar 2019)

Purple said:


> The cost of funding a pension of €12,500 a year works out at €146.25 a week over 40 years.
> A single person earning €90,000 pays a total of €7,671 in PRSI and USC so assuming that all of that went into a State pension pot (which isn't the case) they would just about fund their own State pension.
> 
> If funding for pensions only came from the PRSI pot, and taking into account that PRSI covers far more than just pensions, you'd have to be earning north of a quarter of a million a year to fund your own State pension.


14% of my annual wages  invested in Pension  funds since 1985 the 14% included enough to back fund me to age 25 ,aim was to give me a fund of two thirds of final salary including Lump sum, this was reviewed every so often to make sure target was met never had to increase % over my working life,

When I first Came to working age.  I had two choices Work in Ireland if I could find an employer to employ me, or I could have gone to the UK, I already had a job offer  over in the UK.


 I chose to work in Ireland for all of my working life, The day he employed me he created an liability to this state and he paid for this through a stamp back then ,

Before he employed me he had to make sure ,my work  earned enough to pay my own wages along with enough to pay the state Liability enough to cover Insurance and so forth,
 then I had to make  profit by hiring me, he cut a cheque for me every week,  he cut another cheque my part of the retirement liability along with his own and sent it to the Government for over 47 years if I was on 90K he would have cut a cheque for around  17250,That is over 19%  or close to one fifth of gross wages before income tax,

 that is a long way from your 7671 euro, But then again I am worth every cent of it in retirement, To the best of my knowledge  it comes to around 13K from 25/3/2019,when you include the double week at Christmas,

If I chosen to work in the UK all of my life I would not have any work related entitlements in Ireland,

I have to go now my retired Public servant friends are ringing me to go out for something to eat ,You would think they would know  it is ash Wednesday,


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## Purple (6 Mar 2019)

Social insurance deductions pay for far more than contributory State pensions.
It covers;
· Jobseeker's Benefit
· Illness Benefit
· Maternity Benefit
· Paternity Benefit
· Adoptive Benefit
· Health and Safety Benefit
· Invalidity Pension
· Widow's, Widower's or Surviving Civil Partner's (Contributory) Pension
· Guardian's Payment (Contributory)
· State Pension (Contributory)
· Treatment Benefit
· Occupational Injuries Benefit
· Carer's Benefit

It's called social insurance, not pension deductions.


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## RETIRED2017 (6 Mar 2019)

Purple said:


> Social insurance deductions pay for far more than contributory State pensions.
> It covers;
> · Jobseeker's Benefit
> · Illness Benefit
> ...



The surprising thing is all of the retired ministers never had to pay for any of the above, They paid a D stamp 1.96% with no employer contributions,comes to a grand total of  1200 euro in total on a wage of 90K before the TROIKA came to town,

 When the realised the TROIKA were coming to town the started paying USC on top of there 1200euro they now pay   4071 euro USC for a grand total of 5271 euro or over 5% against almost 20% for there most ardent supporters,

If you know any of there supporters , PLease don't tell them the could start voting for the likes of SF and such like, not good, not good at all,please don't tell,

The funny thing  it was the Ministers who never paid any of the above, came up with the name Social insurance,and it seamed to have worked a treat,


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## Purple (6 Mar 2019)

RETIRED2017 said:


> The surprising thing is all of the retired ministers never had to pay for any of the above, They paid a D stamp 1.96% with no employer contributions,comes to a grand total of  1200 euro in total on a wage of 90K before the TROIKA came to town,
> 
> When the realised the TROIKA were coming to town the started paying USC on top of there 1200euro they now pay   4071 euro USC for a grand total of 5271 euro or over 5% against almost 20% for there most ardent supporters,
> 
> ...


Yea, great, I take it that you now accept that you and your employer didn't contribute all that money to your State pension?


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## NoRegretsCoyote (6 Mar 2019)

I first made PRSI contributions at 18.

I'll be eligible for a state pension at 68.

You could look at it as me lending to the state for a very long time.

Investment growth over a half-century is pretty big, such is the beauty of compound interest.


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## RETIRED2017 (6 Mar 2019)

Purple said:


> Yea, great, I take it that you now accept that you and your employer didn't contribute all that money to your State pension?


My employer paid for most of my state pension and another chunk of my private pension,hope you don't allow others to take yours , not fair your employer paying all this money in and you leaving it behind you,

Just remember  Farmers and the self employed  people along with others are leaving you and your employer to shoulder the biggest share on the list you posted,


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## RETIRED2017 (6 Mar 2019)

NoRegretsCoyote said:


> I first made PRSI contributions at 18.
> 
> I'll be eligible for a state pension at 68.
> 
> ...


And others want to leave it behind for others to enjoy , Funny  the people who Believe They're Capitalists Are they Opposite of Capitalists,


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## RETIRED2017 (6 Mar 2019)

NoRegretsCoyote said:


> I first made PRSI contributions at 18.
> 
> I'll be eligible for a state pension at 68.
> 
> ...


My advice to you is to build up a private pension aim to retire at 65 enjoy your retirement between 65 and 68 ,I retired a few years before state pension the sweetest time of my life, Do the same if you can, There is a very good pension tax breaks if you are in a position to take advantage of,
Out of interest if the state cont pension kicked in at 65 /66 would you have retired at that age,I was only out of the workforce on layoff for approx 6 months over 48 years paying into the system (47.8 years)
Enjoyed my working life , now enjoying  my well earned Retirement ,


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## RETIRED2017 (6 Mar 2019)

Purple said:


> I was using the Pension Authority Pension Calculator.
> The current State pension is €12,912 so what would the cost of funding a pension of €12,912, net of the State pension be?
> In order to do that on their calculator you need to look for a pension of €25,824 since they deduct the State pension from what you ask for. They say that you need to put in €7,100 a year over 40 years.


There are advisors taking good money off people using the same calculator, have a look at real returns since 1980 ,It is very Important you get up to speed on pension returns you will not feel the time going until retirement and there are great tax breaks outs there if you are in a position to take advantage of and are well informed,


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## Purple (12 Mar 2019)

Retired, 
Tax relief on pension contributions is deferred taxation. It is not a "tax break". You pay tax when you get the money. It would be absurd to pay income tax on the way in and the way out. That would be double taxation. 

You still haven't acknowledged that you, and your employer, came nowhere near to funding your State (PRSI) pension... or were you and your employer paying over €20,000 a year in PRSI on your wages?


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## NoRegretsCoyote (12 Mar 2019)

Purple said:


> Retired,
> Tax relief on pension contributions is deferred taxation. It is not a "tax break". You pay tax when you get the money. It would be absurd to pay income tax on the way in and the way out. That would be double taxation.



Kind of. This would only be true if there was a flat tax on all income.

Ireland's income tax system is highly progressive. Your financial needs are generally higher when working than when retired. Many people when working take advantage of tax reliefs at 41% and then pay tax on the proceeds in retirement (if at all) at 20%.


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## Purple (12 Mar 2019)

NoRegretsCoyote said:


> Kind of. This would only be true if there was a flat tax on all income.
> 
> Ireland's income tax system is highly progressive. Your financial needs are generally higher when working than when retired. Many people when working take advantage of tax reliefs at 41% and then pay tax on the proceeds in retirement (if at all) at 20%.


Fair point, but it is still deferred taxation. Income tax is paid on income. If you are putting the money into a pension fund then it is not income.


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## RETIRED2017 (12 Mar 2019)

Purple said:


> Retired,
> Tax relief on pension contributions is deferred taxation. It is not a "tax break". You pay tax when you get the money. It would be absurd to pay income tax on the way in and the way out. That would be double taxation.
> 
> You still haven't acknowledged that you, and your employer, came nowhere near to funding your State (PRSI) pension... or were you and your employer paying over €20,000 a year in PRSI on your wages?


 It is frightening you Don't  understand how beneficial deferral taxation is for your generation,

 the tax break is invested not squandered and will benefit future generations,

 , I have posted on hear about the government not investing the money the are taking off public servants they are using it as part of there pay as you go system they should not be allowed to do so .by the workers who pay in. and all  taxpayers who will finish up picking up the tab,

As far as I am concerned tax breaks should only be given where the money is Invested at arms length and contributions invested for retirement ,

 With the pay as you go system we have in Ireland you should be glad come taxation is being invested to benefit future generations,

Getting back to seeing Around 19%% of my payroll taken through PRSI, you have made up your mind to ignore it, compound interest is your only man, there ia a clue ,

I pay tax on my income in retirement glad to do so,

Purple I know you cant be good at Everything I understand,


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## NoRegretsCoyote (12 Mar 2019)

Purple said:


> Fair point, but it is still deferred taxation. Income tax is paid on income. If you are putting the money into a pension fund then it is not income.


You can take advantage of tax relief at 41% for a long time on pension contributions. 

Say you end up with a €17k private pension and €13k SPC. This is generally thought of as a pretty comfortable retirement income. 

At the age of 70 you pay about a 9% average tax rate. Or about 15% if you exclude the tax-free SPC.


My point is that there is not very much tax being paid at all: either on the way in, when invested, or in payment.


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## RETIRED2017 (12 Mar 2019)

Brendan Burgess said:


> https://www.independent.ie/business...st-from-tax-reliefs-on-pensions-37874590.html
> 
> Private sector workers in DC schemes get an average of 7% employer contribution.


The biggest problem is the failure of governments taken pension contributions  from public servants, and not investing it
As far as I am concerned Tax breaks should only be given on contributions Invested at arms length same as private sector pension contributions,

Is there any point in giving tax breaks on contributions Which cannot be traced back to funding future pensions,  Squandered with no return most of it,
This is not fair on younger public servants,


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## Leo (12 Mar 2019)

RETIRED2017 said:


> The biggest problem is the failure of governments taken pension contributions from public servants, and not investing it



That's not how governments work!


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## RETIRED2017 (12 Mar 2019)

Leo said:


> That's not how governments work!


Who is the Government?


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## Leo (12 Mar 2019)

RETIRED2017 said:


> Who is the Government?



If you don't understand that....


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## Purple (12 Mar 2019)

RETIRED2017 said:


> It is frightening you Don't understand how beneficial deferral taxation is for your generation,


 I do understand it. 



RETIRED2017 said:


> Getting back to seeing Around 19%% of my payroll taken through PRSI, you have made up your mind to ignore it, compound interest is your only man, there ia a clue ,


 I've given you costs, based on a pensions calculator from the Pension Authority. You come back with a comment about compounding interest. 
I've pointed out all of the things that are paid for by the PRSI you and your employer paid, pensions only being a part of it. 
Just accept that you (and your employer) didn't fund your State pension and be thankful that the young people who are working today, the generation shafted by your generation, are paying your pension for you. Just say thanks. That's all. A little gratitude goes a long way. If you really want you can apologise to them too, on behalf of your generation, for making such a mess of the country.

I'll thank them when I retire too (at 68). I already apologise when appropriate for the failings of my generation (I'm in my mid 40's) and how we are living beyond our means using money they will have to repay.


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