# Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% cut?



## Howitzer (29 Sep 2009)

csirl said:


> Another point that seemed to be brushed over was that the public sector pay cuts seem to be well in excess of those in the economy. They conceded that the economy will constrict by 5.7%, yet the public sector workers received a 7-8% pay cut earlier this year and are facing another or similar magnitude in the Budget.





VOR said:


> But the 7-8% was on the gross. After tax relief it is in reality a 3.5%-4% reduction of take home pay. And this money will be given to the employee anyway when he/she retires.
> Hardly a pay cut. A pay deferral would be a more appropriate term.


http://www.rte.ie/news/2009/0203/economy.html


> A person earning €15,000 gross would pay a pension levy of 3% and the levy rises gradually thereafter.
> * 5% on a salary of €25,000
> * 6.4% on €35,000
> * 7.2% on €45,000
> ...


I would have thought this was clear by now given people have received a number of pay packets and would have been able to figure it out categorically.

Public Sector employees, does your, before tax, salary show a 7-8% cut or a 3-4% cut? (@55K)


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## VOR (29 Sep 2009)

*Re: Pension Levy - real cost*

I would expect it to show 8% gross and 4% net reduction.

From the SBP -  [broken link removed]

If you work within the public service you will see a dent in your take home pay to the tune of about 4 per cent on average as a result of the new pension levy.

1) Mark is a 27-year-old clerical officer working in the civil service for the last three years. He earns a gross annual salary of €26,672. The gross impact of the pension levy will mean a 5.3 per cent drop in his salary. However, once the tax relief is applied the net effect is that his salary will fall by 4 per cent.
This translates to a net loss of €1,077,which equates to roughly €90 less in his monthly pay packet - the equivalent of about nine cinema trips or roughly the cost of taxing a small car for six months.
Mark will now pay a total of €4,501 each year in tax, PRSI, levies and pension contributions. This is 17 percent of his total salary. 

2) John is an assistant principal officer in the civil service, earning a gross annual salary of €66,179. The 47-year-old has worked in the same government department for the last 25 years. He is the sole earner in his home, with his wife working as a stay-at home mother.
The levy will reduce John’s gross salary by 8.1 per cent, but after tax relief the net impact of the levy will be a 4.6 per cent reduction in his take-home pay. He will be €3,059 worse off each year, with his net weekly wages falling by almost €60 - the amount John and his wife spend each week on a meal for two in their local restaurant.
The introduction of the new pension levy means that John will now pay a total of €18,177 each year in tax, PRSI, levies and pension contributions. This is 27 per cent of his total salary.


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## rabbits (29 Sep 2009)

*Re: Pension Levy - real cost*



> Originally Posted by *VOR* http://www.askaboutmoney.com/showthread.php?p=937169#post937169
> _But the 7-8% was on the gross. After tax relief it is in reality a 3.5%-4% reduction of take home pay. And this money will be given to the employee anyway when he/she retires.
> Hardly a pay cut. A pay deferral would be a more appropriate term. _


_

The money gained from the pension levy (also applied to public sector workers who already paid into their pension fund) went back to the Government.  It didn't go into any pension funds so the employee does not get the money back when s/he retires so yes, its definitely a pay cut.  

_


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## Sunny (29 Sep 2009)

*Re: Pension Levy - real cost*



rabbits said:


> The money gained from the pension levy (also applied to public sector workers who already paid into their pension fund) went back to the Government. It didn't go into any pension funds so the employee does not get the money back when s/he retires so yes, its definitely a pay cut.
> 
> [/i]


 
This is the bizarre sort of logic that gets me angry. So what if the money from the levy goes goes straight into the general current account. Thats where you get your pension from. Around €2 billion a year comes out that same current account to pay pensions. Thats around 10% of overall pay bill for the public sector and climbing every year. The Government are not saying that we taking this money off you for you never to see it again. They are simply asking you to make a contribution (small one) to help cover the cost of the pension.

You can argue about the fairness of the levy etc and you would have a point but don't pretend that you never see that money again at retirement. You get that money back and more.


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## rabbits (29 Sep 2009)

*Re: Pension Levy - real cost*



Sunny said:


> This is the bizarre sort of logic that gets me angry. So what if the money from the levy goes goes straight into the general current account. Thats where you get your pension from. Around €2 billion a year comes out that same current account to pay pensions. Thats around 10% of overall pay bill for the public sector and climbing every year. The Government are not saying that we taking this money off you for you never to see it again. They are simply asking you to make a contribution (small one) to help cover the cost of the pension.
> 
> You can argue about the fairness of the levy etc and you would have a point but don't pretend that you never see that money again at retirement. You get that money back and more.



  I was merely replying to the note saying that the pension levy went into the pension fund (which is a specific fund rather than the general exchequer - regardless of it all coming out of the same original pot which wasn't the point of the comment).  



> They are simply asking you to make a contribution (small one) to help cover the cost of the pension.



I already do pay towards my pension from the (not highly inflated - sorry about that) salary that I recieve.  This has been the case since I started in my job and has never been any different.  

Just to clear things up in case the thread starts to go on about these things - I get the standard minimum holidays to take when I wish that everyone else in the country is entitled to (not more) and I don't have a months worth of mandatory sick days that I am expected to take each year either.  There are most definitely scandelous areas in the civil service (especially) and in the public service (which is where I am) but the bulk of the staff are earning normal salary levels for jobs that often require 3rd level qualifications.


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## Howitzer (29 Sep 2009)

*Re: Pension Levy - real cost*



VOR said:


> I would expect it to show 8% gross and 4% net reduction.
> 
> From the SBP - [broken link removed]
> 
> ...


Those examples explain it to me but I don't reach the same conclusion as you, or the article for that matter. I may be going crazy through stat overload.

In example 1) Mark receives 90 Euro a month less in his BEFORE tax pay - which doesn't equate to 9 cinema trips. 

So it's 8% Gross, 4% Net of Pension Levy and 2% Net.

Can someone with an actual PS payslip have a rummage around and give a real real example?

In general, the pay cut seems to me to be 3-4% rather than the oft quoted 7-8%.


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## csirl (29 Sep 2009)

*Re: Pension Levy - real cost*

In defence of PS workers, the pay cuts in the private sector are also on gross pay and so are also a lot less after tax.

My wifes a public sector worker as are some friends of mine. The big gripe they have over the pension levy is that it does not go into a ring fenced scheme. When you add the pension levy to the pension contributions that they already pay and take into their Class A PRSI contributions (they only get 1 pension - 50% of salary inclusive of SW contrib. pension), they are paying way over the odds for their pensions - more than the typical employee in most medium to large companies in Ireland. Certainly my wife is paying a much higher rate of contribution that I have in private sector jobs I've done and is getting a lower pension at the end. A lot of public sector workers will now pay much more in contributions in pure cash terms than their pensions will ever be worth. My wife is paying close to 20% out of her own pocket, not counting her employers PRSI contributions which are supposed to go towards the SW pension. 

The other anxiety that public sector workers have is that they do not believe that their pensions will be there by the time they reach retirement. They are bottom of the priority list for the Government when it comes to paying bills and are being gradually eroded over the years. Most younger public sector workers believe that by the time they retire, they'll be getting little more than whatever the SW pension is at that time. They just dont trust the Government with their contributions and are uncomfortable with the fact that they are being spent as current expenditure rather than being put in a pension fund.

The solution to all this is to put all public sector workers on a defined contribution scheme. At the rate of contributions most make, they would be a lot better off. I am aware that many of my PS friends are scared of DC pensions because they are unfamiliar with them and they read all the horror stories in the press. But, even if the stock markets tanked a few times during a public servants 40 year career, I honestly believe that they would still have much higher pensions on the same contributions than staying in the government scheme. I've advised my wife that if at some stage in the future, public servants are offered a DC scheme, she should sign up.


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## Howitzer (29 Sep 2009)

*Re: Pension Levy - real cost*

If only they'd simply called it for what it is - a pay cut - rather than obfuscating the issue by calling it a pension levy.

I'm pretty sure many in the PS genuinely don't know how much their pay has decreased by. And many of those who do, and are in a position to inform debates, choose not to.

If you want to call it a Pension Levy the average cut is 8%

If you want to call it a Pay Cut the average is 4%.


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## bogle (29 Sep 2009)

*Re: Pension Levy - real cost*



Sunny said:


> This is the bizarre sort of logic that gets me angry...



Dude, I thought you were in a zen like state!

http://www.askaboutmoney.com/showthread.php?t=122939

That didn't last too long did it? :?


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## peelaaa (29 Sep 2009)

*Re: Pension Levy - real cost*



csirl said:


> In defence of PS workers, the pay cuts in the private sector are also on gross pay and so are also a lot less after tax.
> 
> My wifes a public sector worker as are some friends of mine. The big gripe they have over the pension levy is that it does not go into a ring fenced scheme. When you add the pension levy to the pension contributions that they already pay and take into their Class A PRSI contributions (they only get 1 pension - 50% of salary inclusive of SW contrib. pension), they are paying way over the odds for their pensions - more than the typical employee in most medium to large companies in Ireland. Certainly my wife is paying a much higher rate of contribution that I have in private sector jobs I've done and is getting a lower pension at the end. A lot of public sector workers will now pay much more in contributions in pure cash terms than their pensions will ever be worth. My wife is paying close to 20% out of her own pocket, not counting her employers PRSI contributions which are supposed to go towards the SW pension.
> 
> ...


 
But the main difference between public sector and private pension is that with the public you are guaranteed the 50% of salary. You can't beat it and as for the private pensions, it could be any figure depending on markets at the time.


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## bogle (29 Sep 2009)

*Re: Pension Levy - real cost*



peelaaa said:


> But the main difference between public sector and private pension is that with the public you are guaranteed the 50% of salary. You can't beat it and as for the private pensions, it could be any figure depending on markets at the time.



But isn't that what the highly paid pension fund manager is supposed to do? Lock in any gains made on the upside as the market starts to turn down?

Of course when every one takes their cut e.g. 4 or 5% off each contribution plus any commission, plus management fees, plus administration fees, plus bid offer spreads etc etc etc its no wonder the actuality doesn't live up to the salesman's talk.

And lets not forget we've got some of the best pension fund managers in world here in Ireland!

[broken link removed]


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## ashambles (29 Sep 2009)

*Re: Pension Levy - real cost*



> And lets not forget we've got some of the best pension fund managers in world here in Ireland!


I'm not sure what the point is here as I don't think anyone has praised Irish DC pensions, certainly no one relying on one will.

On the contrary anyone with a DC pension will tell you the pension companies offer terrible pension schemes that cost too much, generally are over heavy in Irish equities and indeed property. Good Irish fund managers will be headhunted internationally as happened before with BIAM when their managers managed to avoid the tech bubble crash, as a result Irish funds almost by definition will be poorly managed. 

The only reasons anyone invests in a DC pension is tax relief and the employer contribution, other than that they're useless. Always interesting to ask the pension advisers whether they've a DC pension themselves, usually the answer is no.

However to their slight defense many articles criticizing them tend not to be up to date, they've staged a huge recovery over the last 6 months or so - thanks to being overweight in Irish equities. They're still rubbish but dumb luck aka NAMA has undone much of the damage.


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## Nermal (29 Sep 2009)

*Re: Pension Levy - real cost*



csirl said:


> My wife is paying close to 20% out of her own pocket, not counting her employers PRSI contributions which are supposed to go towards the SW pension.



DB pension of 50% of final salary minus SW pension, index linked to the wages of the grade you retired at, would cost far more than 20% salary to buy in the market.


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## Protocol (30 Sep 2009)

*Re: Pension Levy - real cost*



csirl said:


> they are paying way over the odds for their pensions - more than the typical employee in most medium to large companies in Ireland. Certainly my wife is paying a much higher rate of contribution that I have in private sector jobs I've done and is getting a lower pension at the end. A lot of public sector workers will now pay much more in contributions in pure cash terms than their pensions will ever be worth. My wife is paying close to 20% out of her own pocket, not counting her employers PRSI contributions which are supposed to go towards the SW pension.


 
Typical public sector workers pay *4% PRSI* on income up to 75k, less a 127 pw exemption.

They also pay approx *5% pension cont.* (complex, but approx 5%).

They also now pay the *pension levy*.

There is absolutely no chance that these same conts going into a DC fund would ever be enough to fund a 150% lump-sum and a 50% pension.

The DB pension is heavily subsidised by the taxpayer. This is why the DB occupational pension is so good.

My suggestion is as follows:

*Keep the DB pensions.*
*Charge the workers more, to reflect the true cost, e.g. 10% of wages*
*Make explicit on all payslip the Govt notional or actual contribution, e.g. another 15% of wages.*


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## VOR (30 Sep 2009)

*Re: Pension Levy - real cost*

Plus we could change the contracts for all incoming staff to DC. Whenever new recruits might join, God only knows.


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## Protocol (30 Sep 2009)

*Re: Pension Levy - real cost*

But surely if DB pensions are so good, then we should aspire to them for everybody?

Making the cost more clear and transparent would be helpful.

Or else switch to DC, but with min 20%, more like 25% cont. rates, with 10-15% from the employer.


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## VOR (30 Sep 2009)

*Re: Pension Levy - real cost*



Protocol said:


> But surely if DB pensions are so good, then we should aspire to them for everybody?
> 
> Making the cost more clear and transparent would be helpful.
> 
> Or else switch to DC, but with min 20%, more like 25% cont. rates, with 10-15% from the employer.


 
I see where you are coming from but it is just not possible to give every one DB.Whether we like it or not, the next generation will end up working to pay for our pensions. Do you want to lumber them with even more debt. Its €101bn at present.

The DC idea with higher employee contributions, better tax breaks and better investment options would be ideal.


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## csirl (30 Sep 2009)

*Re: Pension Levy - real cost*



> There is absolutely no chance that these same conts going into a DC fund would ever be enough to fund a 150% lump-sum and a 50% pension.


 

People can juggle figures all they want, but if you contribute 20% of your salary for 40 years, it means that you have contributed 8 years salary in total by retirement. This should give you 16 years on half pay. Which means that you should be able to live to 65+16yr = 81years old even if your contributions only barely kept up with inflation. As 81 years old is older than the average life expectancy, it means that the government is profiting from public service pensions. Public servants would be better keeping the money and putting it in a post office savings account.


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## orka (1 Oct 2009)

*Re: Pension Levy - real cost*



csirl said:


> People can juggle figures all they want, but if you contribute 20% of your salary for 40 years, it means that you have contributed 8 years salary in total by retirement. This should give you 16 years on half pay.


This makes the huge assumption that someone retires on the same salary they started on - does this happen often in practice?  I think starting pay in the CS in the mid 1980s was around €8,000 - a starter back then (age 40-ish now) will be earning quite a bit more now don't you agree?  Even the most unambitious will get the annual increments which are separate from inflation.  Many will get promotions from CO to EO or EO to HEO and PO etc. But salary contributions all along are based on salary at the time - so you start contributing as a % of a low salary but get a pension based on a much higher final salary.  Your argument would be a bit more valid if pensions were based on average career salary (not very appealing though is it?) - but even then the in-retirement link to workers grade inflation makes the pension a lot more valuable than you are either aware or care to admit.



csirl said:


> Public servants would be better keeping the money and putting it in a post office savings account.


I hope that if public servants ever get a choice of defined contribution or continuing as is, that you are the one advising them.


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## shanegl (1 Oct 2009)

*Re: Pension Levy - real cost*



> it means that you have contributed 8 years salary in total by retirement



Which salary? Ever hear of increments?


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## csirl (1 Oct 2009)

*Re: Pension Levy - real cost*

Orka, you would also expect that if the money was invested wisely, the recipient would get a much better return than if you simply banked the money, thus keeping pace with increases in salary and inflation. While some do work their way up the ranks, the vast majority of public servants start and finish their careers in relatively low paid clerical positions.


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## bogle (1 Oct 2009)

*Re: Pension Levy - real cost*

Was it not Albert Einstein who said "The most powerful force in the universe is compound interest" 

40 years of compounding adds up to a lot.


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## VOR (1 Oct 2009)

*Re: Pension Levy - real cost*



bogle said:


> Was it not Albert Einstein who said "The most powerful force in the universe is compound interest"


 
I just checked with Coughlan, our wonderful Tanaiste, and she assures me  it was Darwin.


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## becky (2 Oct 2009)

*Re: Pension Levy - real cost*



Howitzer said:


> http://www.rte.ie/news/2009/0203/economy.html
> 
> I would have thought this was clear by now given people have received a number of pay packets and would have been able to figure it out categorically.
> 
> Public Sector employees, does your, before tax, salary show a 7-8% cut or a 3-4% cut? (@55K)


 
My payslip shows both. Gross Pay and Taxable Pay. The taxable salary which does not include my pension contribution or pension levy is the amount that appears on my P60.


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## Protocol (2 Oct 2009)

*Re: Pension Levy - real cost*



csirl said:


> Orka While some do work their way up the ranks, the vast majority of public servants start and finish their careers in relatively low paid clerical positions.


 
*No.*

*Teachers end up on 65-70k.*

*Nurses end up on 40-45k (???)*

*Guards end up on 50k+.*

*Doctors end up on 150k+.*

*So far, that would mean 100,000 workers+.*

*For example, I work with public servants who end up on 87k with 70 days leave.*

*My father today met up with his retired pals, all on 700 pw pension.*

*Very common, unremarkable, no big deal.*


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## Complainer (2 Oct 2009)

*Re: Pension Levy - real cost*



Protocol said:


> *For example, I work with public servants who end up on 87k with 70 days leave.*


Nonsense. There is no public servant (excluding teachers) with 70 days leave.


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## Protocol (2 Oct 2009)

*Re: Pension Levy - real cost*

These are 3rd level teaching staff.

14 weeks leave = 3 at Christmas, 2 at Easter, 8 in July and Aug, 1 in October.

First point on scale = 52k approx.
Second = 62k approx.

Few of them are aged approx. 30 on 62k+.

Last point on scale = 85-87k.


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## peelaaa (2 Oct 2009)

*Re: Pension Levy - real cost*



Protocol said:


> *No.*
> 
> *Teachers end up on 65-70k.*
> 
> ...


 
Those figures are unreal. I am in private sector on similar to a teacher salary but my employer pays only 3.5% pension matching my 3.5% payment.
I'm looking at pension level of a pauper compared to those public figures.

They should thank themselves lucky and not be complaining.


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## TarfHead (2 Oct 2009)

*Re: Pension Levy - real cost*



Protocol said:


> These are 3rd level teaching staff.


 
I assume that such staff are required to produce or contribute to academic works in their 'spare' time ? While the time off is, at face value, generous, are they not also required to use this time in support of their tenure ?


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## peelaaa (2 Oct 2009)

*Re: Pension Levy - real cost*



TarfHead said:


> I assume that such staff are required to produce or contribute to academic works in their 'spare' time ? While the time off is, at face value, generous, are they not also required to use this time in support of their tenure ?


 
Ha Ha, my friend is a teacher and he is out golfing,cinema, music events, watching sport  most days.
Good life I tells ya.


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## Welfarite (2 Oct 2009)

*Re: Pension Levy - real cost*

This was a fine thread until Protocol starting 'shouting' in bold and it drifted into another PS bashing thread. Ah well...


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## truthseeker (2 Oct 2009)

*Re: Pension Levy - real cost*



TarfHead said:


> I assume that such staff are required to produce or contribute to academic works in their 'spare' time ? While the time off is, at face value, generous, are they not also required to use this time in support of their tenure ?


 
Ive a friend who is a 3rd level lecturer. Time off also includes a number of work related things to do, correct exams, revision of course material (depending on what you teach this is easier or harder, example my friend teaches subjects that change all the time - like politics, but other lecturers may be able to use notes from the previous year if the course doesnt change much - like physics for example), some meetings to organise schedules for the coming year and prior to exams there are usually extra hours put in assisting students with specific issues.

In saying that - he has more time off than anyone I know, works less hours than anyone I know and feels hard done by if his yearly timetable has individual day starts before 10am or finishes after 4pm.

Its a fantastic life tbh - wish Id thought of becoming a lecturer!!!


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## bogle (2 Oct 2009)

*Re: Pension Levy - real cost*



truthseeker said:


> Ive a friend who is a 3rd level lecturer. Time off also includes a number of work related things to do, correct exams, revision of course material (depending on what you teach this is easier or harder, example my friend teaches subjects that change all the time - like politics, but other lecturers may be able to use notes from the previous year if the course doesnt change much - like physics for example), some meetings to organise schedules for the coming year and prior to exams there are usually extra hours put in assisting students with specific issues.
> 
> In saying that - he has more time off than anyone I know, works less hours than anyone I know and feels hard done by if his yearly timetable has individual day starts before 10am or finishes after 4pm.
> 
> Its a fantastic life tbh - wish Id thought of becoming a lecturer!!!



That would also be my experience of an acquaintance who is a third level lecturer!


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## truthseeker (2 Oct 2009)

*Re: Pension Levy - real cost*



bogle said:


> That would also be my experience of an acquaintance who is a third level lecturer!


 
In terms of making an academic contribution himself he has the choice or whether or not he wants to do his PhD. The advantage is that when its done he moves up to a higher payscale immediately. But if he doesnt do it he ends up on the higher payscale after a number of years anyway. Life will probably be reasonably stressful while doing it as it will take 5-7 years or so and will mean studying while working. Or he could just relax and wait for the higher pay thats guaranteed. 8 years in the job - no sign of PhD studies beginning.......


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## Protocol (2 Oct 2009)

*Re: Pension Levy - real cost*



peelaaa said:


> Those figures are unreal. I am in private sector on similar to a teacher salary but my employer pays only 3.5% pension matching my 3.5% payment.
> I'm looking at pension level of a pauper compared to those public figures.
> 
> They should thank themselves lucky and not be complaining.


 

Bear in mind that those figures are final wages, not pension amounts.


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## Protocol (2 Oct 2009)

*Re: Pension Levy - real cost*



TarfHead said:


> I assume that such staff are required to produce or contribute to academic works in their 'spare' time ? While the time off is, at face value, generous, are they not also required to use this time in support of their tenure ?


 
Well, in a university, yes, you would be expected to do research and publish.

But in ITs I'd say there is less emphasis on that.  I have a friend who is an IT lecturer, no pressure to research or publish, on a scale to 85k.

The people with the 70 days leave are off-campus for 70 days, i.e. not in work doing research.


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## Protocol (2 Oct 2009)

*Re: Pension Levy - real cost*



Welfarite said:


> This was a fine thread until Protocol starting 'shouting' in bold and it drifted into another PS bashing thread. Ah well...


 

Sorry if I overuse the bold font.

By the way, I am *not* against high public sector wages.

I just ask that in return, they are productive and accountable.

For example, by all means pay our teachers well, pay them the most in the world.

But for those high wages, in-service training should be done in July/Aug, the school year should increase from 167 days to 180 days, parent teacher meeting in the evenings, etc.


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## Protocol (2 Oct 2009)

*Re: Pension Levy - real cost*



truthseeker said:


> In terms of making an academic contribution himself he has the choice or whether or not he wants to do his PhD. The advantage is that when its done he moves up to a higher payscale immediately. But if he doesnt do it he ends up on the higher payscale after a number of years anyway. Life will probably be reasonably stressful while doing it as it will take 5-7 years or so and will mean studying while working. Or he could just relax and wait for the higher pay thats guaranteed. 8 years in the job - no sign of PhD studies beginning.......


 
Correct, in ITs you can move to the higher scale woithout a PhD, as you say.  No need to be published.  Higher scale goes to 80-85k approx.


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## peelaaa (3 Oct 2009)

*Re: Pension Levy - real cost*



Protocol said:


> Bear in mind that those figures are final wages, not pension amounts.


 

Yes I realise that, but they are still on a good deal, they are guaranteed what they have been offered, it ain't like that when on a private pension.
I am sick of hearing union leaders complaining about this and that when the majority of private employees have no say and just have to take it on the chin.
This country is going to end up just like the eighties when the majority of employed people were employed by the state on inflated wages, nothing has changed, this country definately is BACKWARD. People are being driven away yet again.
Look at the hospitals, I could go on and on.......


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## Welfarite (4 Oct 2009)

*Re: Pension Levy - real cost*



Protocol said:


> Sorry if I overuse the bold font.
> 
> By the way, I am *not* against high public sector wages.
> 
> ...


 
I agree with all of that. But what has that got to do with the subject of this thread; the real cost of Pension Levies?


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## ajapale (4 Oct 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*



Welfarite said:


> I agree with all of that. But what has that got to do with the subject of this thread; the real cost of Pension Levies?



Yes, this puzzles me as well!

I have changed the title with the OP's explicit question. (but have changed the word sector to service as the Public Service Pension Levy does not extend to large parts of the Public Sector.. ESB, Bord Gas etc).

*Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% cut?*


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## gipimann (4 Oct 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*

I pay 6.5% Superannuation (my regular pension contribution).

The Pension Levy is higher than my superannuation contribution, at 7.34% pre-tax.


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## Howitzer (5 Oct 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*



ajapale said:


> Yes, this puzzles me as well!
> 
> I have changed the title with the OP's explicit question. (but have changed the word sector to service as the Public Service Pension Levy does not extend to large parts of the Public Sector.. ESB, Bord Gas etc).
> 
> *Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% cut?*


Thanks, though I'm not sure we're any closer to getting a definitive answer. I didn't think it was that complicated a question.


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## Protocol (5 Oct 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*

6.533% of my gross.


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## becky (5 Oct 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*

I thought I answered it in post 24.

My taxable pay is 12.83% less then my gross pay. The difference is the pension contribution and penion levy.


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## Shawady (6 Oct 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*



Howitzer said:


> Public Sector employees, does your, before tax, salary show a 7-8% cut or a 3-4% cut? (@55K)


 
Howitzer,
The pension levy does not affect salary before tax i.e. someone on 55K will still be on 55K after the introduction of the pension levy. However, their after-tax pay will be reduced to the equivilant if they have received a 7.5  pay cut.
A pay cut is on gross pay so because someone on the higher rate of tax pays half of it in tax their net pay will only be redcued by 3.5 - 4%. Similarly, because someone on 55K a year is entitled to full tax relief on pension related payments, the 7.5% levy will reduce net pay by 3.5 - 4%.
In other words, the 7.5 % pension levy has the same effect of a 7.5% pay cut on net pay. The advantage for the employee is that pension entitlements are calculated on gross salary and the advantage for the government is it did not affect PS pensioners and it can be used to 'convince' PS workers to take early retirement.


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## Sunny (6 Oct 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*



Shawady said:


> Howitzer,
> The pension levy does not affect salary before tax i.e. someone on 55K will still be on 55K after the introduction of the pension levy. However, their after-tax pay will be reduced to the equivilant if they have received a 7.5 pay cut.
> A pay cut is on gross pay so because someone on the higher rate of tax pays half of it in tax their net pay will only be redcued by 3.5 - 4%. Similarly, because someone on 55K a year is entitled to full tax relief on pension related payments, *the 7.5% levy will reduce net pay by 3.5 - 4%.*
> *In other words, the 7.5 % pension levy has the same effect of a 7.5% pay cut on net pay.* The advantage for the employee is that pension entitlements are calculated on gross salary and the advantage for the government is it did not affect PS pensioners and it can be used to 'convince' PS workers to take early retirement.


 
Sorry I must be thick but I still don't get it.


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## Shawady (6 Oct 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*



Sunny said:


> Sorry I must be thick but I still don't get it.


 
My reading of the situation is that the government had two options. Implement a 7.5% pay cut (which would have been more straight forward) or impose this pension levy, which reduces net pay on a graduated level.

In option one, a 7.5 pay cut would have reduced gross pay for someone on 55K by about 4K. However, at this level of income someone pays tax and prsi on almost half their income (over 34k I think) so although their gross income is reduced by 4K, they are paying less tax and their net income only reduces by approx 2K. So a 7.5% pay cut on gross income will only result in an approx 3.75% redcuction in net pay.

In option two, someone on 55K will still receive 55K gross but now has a pension levy which is approx 4K spread over the year e.g €330 a month if paid monthly.
However as all pension contributions and therefore this new pension levy is allowed tax relief, someone on 55K will be entitled to tax relief at the higher rate for their pension levy i.e. the net cost of the pension levy will be approx half of the original 4K. So although the pension levy may be 7.5%, the reduction in net pay will be approx 3.75%.

My reading of it is that the 7.5% pension levy for someone on 55K has the same (or very similar) effect on net pay than a 7.5% pay cut. The difference is that gross pay is unchanged with the pension levy and therefore pension entitlements will not be affected.


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## Shawady (6 Oct 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*

Sunny, another way of looking at it is that the government wanted to reduce PS pay. They could have just implemented a 7.5% pay cut but that would have made too much sense. Instead they came up with the 'levy'.
From my memory, it was reported in the media that this was an idea that was initially proposed by the union side.


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## Sunny (6 Oct 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*



Shawady said:


> My reading of the situation is that the government had two options. Implement a 7.5% pay cut (which would have been more straight forward) or impose this pension levy, which reduces net pay on a graduated level.
> 
> In option one, a 7.5 pay cut would have reduced gross pay for someone on 55K by about 4K. However, at this level of income someone pays tax and prsi on almost half their income (over 34k I think) so although their gross income is reduced by 4K, they are paying less tax and their net income only reduces by approx 2K. So a 7.5% pay cut on gross income will only result in an approx 3.75% redcuction in net pay.
> 
> ...


 
Cheers. Understand what you are saying now. I think we all agree that the impact on peoples net pay is less than the actual headline pension levy figure that public sector unions love throwing out.


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## VOR (6 Oct 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*

Simply put on this website:
http://www.finance.gov.ie/documents/publications/other/2009/pensiondedtablemay09.pdf


From http://www.pensionsboard.ie/index.asp?locID=458&docID=500
*Tax Relief Example:*_ If you contribute € 100 per week to your pension and you pay tax at the higher rate (i.e. 41%), the *net cost to you works out at € 59 per week*. _*Additional Relief: *Contributions will also be *relieved from PRSI and the Health levy*, if you pay these charges.


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## Shawady (6 Oct 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*



Sunny said:


> Cheers. Understand what you are saying now. I think we all agree that the impact on peoples net pay is less than the actual headline pension levy figure that public sector unions love throwing out.


 
Absolutely, but pay cuts are as far as I am aware are always quoted on gross pay so if someone says their pay was cut 10%, their net pay would be reduced by less than 10%, depending on what tax band they are on.
I think it is also fair to say the same works with pay increases. The last pay agreement was 10% I think, so for someone like myself on the higher rate of tax, my net pay would ahve increased approx 5%.
The problem for the government is that it is an employer and collector of tax. If a private company cuts pay bill by 10%, they will save 10%. If the government does it, it will save 10% on spending but lose out a good bit on the revenue collection side.

I think this a problem the government is going to encounter if and when they cut PS pay.


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## Sunny (6 Oct 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*



Shawady said:


> Absolutely, but pay cuts are as far as I am aware are always quoted on gross pay so if someone says their pay was cut 10%, their net pay would be reduced by less than 10%, depending on what tax band they are on.
> I think it is also fair to say the same works with pay increases. The last pay agreement was 10% I think, so for someone like myself on the higher rate of tax, my net pay would ahve increased approx 5%.
> The problem for the government is that it is an employer and collector of tax. If a private company cuts pay bill by 10%, they will save 10%. If the government does it, it will save 10% on spending but lose out a good bit on the revenue collection side.
> 
> I think this a problem the government is going to encounter if and when they cut PS pay.


 
I accept that. I guess my point is that despite the pension levy being introduced and I accept that it's faults we are still not even making a dent in the public finances and yet the Unions are saying that's as far as we can go.

This is an interesting document in that it outlines an analysis of net voted for expenditure by the Government. If you look at overall spending, it is down 1.3% year on year at the end of Spetember. The interesting thing though is that current spending is only down 0.7% while capital spending is down 13%. Current spending is only down 1% in both Health and Education. I can understand it is easier for the Government to switch off capital spending but it just goes to show what sate we are in if the Public Sector are already saying enough is enough and we have only managed to cut 0.7% off current spending. 

http://www.finance.gov.ie/documents/exchequerstatements/2009/netvotedsept.pdf


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## Purple (6 Oct 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*



Sunny said:


> Cheers. Understand what you are saying now. I think we all agree that the impact on peoples net pay is less than the actual headline pension levy figure that public sector unions love throwing out.



In fairness gross pay is all that can ever be used as different people have different allowances and deductions etc. AFAIK only soccer players work on net pay figures.


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## orka (6 Oct 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*



Shawady said:


> if someone says their pay was cut 10%, their net pay would be reduced by less than 10%, depending on what tax band they are on.
> I think it is also fair to say the same works with pay increases. The last pay agreement was 10% I think, so for someone like myself on the higher rate of tax, my net pay would ahve increased approx 5%.


I don't want to distract from the debate but this isn't correct.  If gross changes by 10%, the net change will be less than 10% but not much less (8%-9%).  

As a simplified example, if tax was a flat 50%, someone earning 40,000 gross would take home 20,000 net.  A 10% increase would increase gross to 44,000 and net to 22,000 - both are 10% increases even though one is a 4,000 increase and one is 2,000 increase.  The structure of our tax system is not this simple and the progressive nature means that pay increases will pay more tax than existing pay - but the impact is still similar.  I put some salaries into an online tax calculator and at a €40K salary, a gross 10% increase would feed through to a 9% increase in net.  Even at a €200K salary, a 10% gross increase would give an 8.5% net increase.


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## Shawady (6 Oct 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*



orka said:


> I don't want to distract from the debate but this isn't correct. If gross changes by 10%, the net change will be less than 10% but not much less (8%-9%).
> 
> As a simplified example, if tax was a flat 50%, someone earning 40,000 gross would take home 20,000 net. A 10% increase would increase gross to 44,000 and net to 22,000 - both are 10% increases even though one is a 4,000 increase and one is 2,000 increase. The structure of our tax system is not this simple and the progressive nature means that pay increases will pay more tax than existing pay - but the impact is still similar. I put some salaries into an online tax calculator and at a €40K salary, a gross 10% increase would feed through to a 9% increase in net. Even at a €200K salary, a 10% gross increase would give an 8.5% net increase.


 
Orka, maybe I was not clear in my explanation but I was refering to the income earned at the higher rate of tax. I think anything over 34k is taxed at 41% so if someone earns 50K and they get a 10% increase they will now earn 55K gross. They would not get anything like 5K a year net.
I just checked my wage slips from last year and compared my pay slips around the time I received an increment. I just checked the difference in my gross increase and net increase after I received an increment. The net increase only represented 49% of the gross increase.


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## orka (6 Oct 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*

Why would anyone want to know what their net € pay change was as a % of their gross?  While gross pay and its movements are interesting (I earn 25K, I earn 45K, I earn 60K...), I think most people just care about net pay - that's what sends us all scrambling to the online calculators on budget day.  All the budget stuff in the papers shows pre- and post-budget net pay (I used to get 1000 net, now I get 950 net - a 5% drop etc.).  
I don't understand what you are saying TBH. When you say "_The last pay agreement was 10% I think, so for someone like myself on the higher rate of tax, my net pay would have increased approx 5%._", what is the net pay increase (5%) a percentage of?


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## Protocol (6 Oct 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*

It seems that people may be confusing:

the change in net pay in euros as a % of the former net pay

the change in net pay in euro as a % of the former gross pay
*Example*

100k, get a *2% increase in gross* to 102k.

The net pay increases by 1k due to marginal tax of 50%.

So net pay goes up by 1% of the former gross wage.

Old net = 70k
New net = 71k

Net up by 1.43% of former net wage.


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## Shawady (6 Oct 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*



orka said:


> Why would anyone want to know what their net € pay change was as a % of their gross?


 
This is the original question on the thread.
_"Public Sector employees, does your, before tax, salary show a 7-8% cut or a 3-4% cut? (@55K)"_
There seemd to be a query from the OP whether the pension levy related to gross pay or net pay. I was pointing out that although the pension levy for someone on 55K is 7.5%, that does not mean that their net pay is reduced by 7.5%. I think that was the thrust of the OPs question?
You are absolutely right - people are only concerned with net pay but the pension levy/pay cuts/pay increases are always quoted in gross terms e.g. 7.5% pension levy or 10% pay increase. So that if someone gets a 10% increase on gross pay, the actual increase may represent a much lower than 10% increase on net pay.
When I refered to 10% gross compared to 5% net, what I should have said that if someone on the higher tax rate gets an increase , they will only receive half of it in their net pay, rather than saying their net pay only increases by 5%.


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## csirl (6 Oct 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*

You cant really generalise on this issue - different people have different personal situations which leads to different taxes. On top of this, the % cuts varied a lot from job to job in the public service. 

No different to any employer - cuts are always a % of gross pay. Everything else is between the employee and the Revenue.


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## Sunny (6 Oct 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*

I am not really arguing over the pay cuts out of gross or net pay. I am simply looking at from a purely PR point of view if you like. The TV's and Papers are full of teachers, nurses etc talking about how the pension levy has almost left them destitute and they are saying they have already sacrificed as much as they can. However, if you look at what actually comes off their net take home, look at where inflation is, they are actually not that much more worse off if at all.

I am simply saying that there must be scope there for more cuts without leaving people on the poverty line as claimed by the unions.


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## Howitzer (14 Oct 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*

A very interesting point was made by Charlie Weston on Matt Cooper with respect to the pension levy. 

It's within the newly agreed Green program for government to reduce tax relief on pensions to a universal 30% rather than the marginal rate. As such as the pension levy calculations go out the window and every PS worker will pay a much higher pension levy contribution.

7-8% (3-4%) would go to 5-6%


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## Shawady (15 Oct 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*



Howitzer said:


> A very interesting point was made by Charlie Weston on Matt Cooper with respect to the pension levy.
> 
> It's within the newly agreed Green program for government to reduce tax relief on pensions to a universal 30% rather than the marginal rate. As such as the pension levy calculations go out the window and every PS worker will pay a much higher pension levy contribution.
> 
> 7-8% (3-4%) would go to 5-6%


 
As far as I am aware, the green proposal is to have a common tax relief rate of 30%. This means that for people on the top rate they will get less tax relief but for people paying at 20% they will actually be entitled to more tax relief. So higher earners lose out but lower earners gain.
In the case of the public service I do not know what percentage of employees claim tax relief at these two rates so it is hard to predict how much the government will gain from this.

I actually thought the government may only give tax relief at the lower rate of 20% in the next budget, which would mean that it would save money on all private and public sector workers that are currently claiming it at the higher rate. In the case of the public sector, this would affect the pension levy and also pension contributions for post 95 employees. 
I have no idea how much the government would save but it could be an option of saving money on PS wages without implementing an actual pay cut, so the government can say 'We cut pay further' and the unions can say 'they haven't cut PS salaries'.


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## Protocol (15 Oct 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*



Shawady said:


> In the case of the public sector, this would affect the pension levy and also pension contributions for post 95 employees.
> 
> *Careful here, remember that most public sector workers, hired pre AND post 1995, pay pension conts.*
> 
> *It's the civil servants that don't.*


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## Shawady (15 Oct 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*

Apologies, I work in civil service post 95.
Do public sector workers such as nurses, doctors, teacher pre 95 pay pension contribution also?


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## becky (15 Oct 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*



Shawady said:


> Apologies, I work in civil service post 95.
> Do public sector workers such as nurses, doctors, teacher pre 95 pay pension contribution also?


 
I'm pre 95 and have always paid pension of 5% and a modified stamp D.  This is the case for all officer grades in the HSE ie: Nurses, doctors.

Non-officer grades such as porters/attendants/EMT's pay full prsi and pension contributions - the change in 1995 did not effect them.


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## gipimann (15 Oct 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*

I'm also pre-95 public service and I pay 6.5% - there's an additional 1.5% for Spouse's and Orphans which employees used to have an option to join or not, but I think it became compulsory back in the early 90s?

Also pay modified PRSI contribution (D).


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## becky (15 Oct 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*



gipimann said:


> I'm also pre-95 public service and I pay 6.5% - there's an additional 1.5% for Spouse's and Orphans which employees used to have an option to join or not, but I think it became compulsory back in the early 90s?
> 
> Also pay modified PRSI contribution (D).


 

Are you sure? My pension is 5% and S&O (complusary) is 1.5%.


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## Protocol (15 Oct 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*



Shawady said:


> Apologies, I work in civil service post 95.
> Do public sector workers such as nurses, doctors, teacher pre 95 pay pension contribution also?


 
Yes, most, if not all, public servants hired pre 1995 pay 5% + 1.5% of gross wage in superannuation for their pension.

Example: I know of teachers who always paid 6.5% of wages since they were hired in the 70s.


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## Shawady (15 Oct 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*



Protocol said:


> Yes, most, if not all, public servants hired pre 1995 pay 5% + 1.5% of gross wage in superannuation for their pension.
> 
> Example: I know of teachers who always paid 6.5% of wages since they were hired in the 70s.


 
That means that if the government did reduce the tax relief to 20% for pension contributions including the levy it could potentially bring a reasonable amount of money.
If they go for one rate at 30%, the extra relief earned by lower earners might eat into the amount the government could gain from high earners.

Anyone have any idea roughly how much tax relief to pensions (public and private) costs the government per annum?


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## gipimann (16 Oct 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*

Sorry Becky,

My post should have been clearer - I meant that I pay 6.5% (including 1.5% S&O contribution), re-reading it I can see it might have read that I was paying 6.5% + 1.5% which of course isn't the case.


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## Howitzer (29 Oct 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*

According to Nurses Union leader on Matt Cooper this deduction is not tax deductable. He was pressed a number of times so it wasn't a slip of the tongue. So the average cut is 7.5%.

I'm confused.


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## Mucker Man (29 Oct 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*

Just heard that too on the Last Word, I thought all pension deductions were tax deductable. Surely the Union leaders would have the correct information? I'm confused too.


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## Howitzer (29 Oct 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*



Mucker Man said:


> Surely the Union leaders would have the correct information?


My thoughts exactly.


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## csirl (29 Oct 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*



> Just heard that too on the Last Word, I thought all pension deductions were tax deductable. Surely the Union leaders would have the correct information? I'm confused too.


 
The pension levy is not regarded as a pension deduction for tax purposes. Pension contributions are defined in the Pensions Act. The legislation introducing the pension levy specifically says that the levy cannot be regarded as a pension contribution as defined by the Pensions Act - see extract below from Financial Emergency Measures in the Public Interest Act 2009 

*7​*​​​​.—(1) Nothing in this Act is to be read as conferring any
additional benefit payable, or that may become payable, under a
public service pension scheme.
(2) A deduction under _section 2 _is not a pension contribution for
the purposes of the Pensions Act 1990.​


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## ashambles (29 Oct 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*

A union leader should be able to understand simple things like tax relief. Understanding all aspects of members' pay would be pretty much the first job for this guy.  

Perhaps he should have it spelt out to him by whoever within the INO produced this table


For instance this shows the 7.5% deduction for a 50k employee costing that person 4.4% of salary. A contribution of 3750 becomes 2211 after relief. (They didn't include PRSI relief as the "amount of relief varies on whether the employee is paying PRSI at the full or modified rate".)

On the plus side it seems there's an opening for the government to switch the levy to a simple pay cut since the misunderstanding seems quite common. (Though I've charitably been assuming that the misunderstanding is people being disingenuous.)


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## Howitzer (24 Nov 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*

Eddie Hobbs on Matt Cooper reckons the cut is 4% not 7% as it attracts tax relief. That assertion hasn't been challenged.


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## Lex Foutish (24 Nov 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*



Howitzer said:


> Eddie Hobbs on Matt Cooper reckons the cut is 4% not 7% as it attracts tax relief. That assertion hasn't been challenged.


 
Heard Eddie Hobbs on the Last Word this evening with a male teacher who really knew what he was talking about. First time I ever heard Eddie being put in his box!


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## Howitzer (24 Nov 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*

Listening to Vincent Brown every single striker he interviews reckons they've taken a 7.5% pay cut - no matter what you look at it that can't be right. 

The 7.5% figure has been bandied about as an average yet every worker seems to think they themselves have taken a 7.5% cut. They all appear to be from the lower end of the pay range. There is a sliding scale and there's no way those people would be at the high/average end.

It appears to me as if these workers are either being misinformed or just don't understand what they themselves are actually being paid.

I think the guys at the bottom are being used to protect their higher paid colleagues.


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## Lex Foutish (25 Nov 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*



Howitzer said:


> Listening to Vincent Brown every single striker he interviews reckons they've taken a 7.5% pay cut - no matter what you look at it that can't be right.
> 
> The 7.5% figure has been bandied about as an average yet every worker seems to think they themselves have taken a 7.5% cut. They all appear to be from the lower end of the pay range. There is a sliding scale and there's no way those people would be at the high/average end.
> 
> ...


 
Were we watching the same programme? How many interviewees on your tv spoke about taking a 7.5% pay cut? *Every single striker?* 

I think it's you're doing the misinforming.


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## Howitzer (25 Nov 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*



Lex Foutish said:


> Were we watching the same programme? How many interviewees on your tv spoke about taking a 7.5% pay cut? *Every single striker?*
> 
> I think it's you're doing the misinforming.


I didn't see the entire program but of the section I saw every interviewee - who was prepared to discuss their wages - made reference to the 7.5% pay cut. There was a Garda Sargeant, some girl and some other bloke. 

Sorry for not being 100% accurate, I wasn't taking notes at the time, but I believe my point still stands. I don't think by sheer coincidence all 3 earn the same wage and so have the same pension levy deduction,


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## VOR (25 Nov 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*

Can any one confirm if the word doc below is authentic. If so, it explains how all stories are pitching the same yarn.

19 November, 2009.

*Guidelines  for  Dealing  with  Media  on 24  November  2009*​

Dear Branch Secretary,

Assuming that the one-day strike of Public Servants goes ahead on 24 November 2009,  there is likely to be considerable media interest and members could be approached by the media while they are on picket duty.

It might be helpful for members to have a check list  of  “Do’s   and  Don’ts”  if the media approach them.

*DO*

Ø                     Agree to speak to Journalists.   There has been such anti Public Service hatred and hysteria whipped up by commentators that the public needs to hear the voices of  ‘ordinary’  Public Servants.   They need to understand that the Public Service is made up of decent,  hard-working people,  mostly on modest salaries

Ø                     Tell your personal circumstances.   One of the biggest difficulties for Public Service Unions has been to convey the fact that over 200,000  Public Servants are on salaries of less that  €50k  per annum.   To get this message across requires that it be humanised and told as personal narrative.   Tell Journalists what you do,  tell them about your financial outgoings and the impact of cuts on your family and yourself,  (if you feel comfortable in doing so).

Ø                     Make the point that Government abandoned the proposals in its April Budget to achieve cuts in the Public Finances’ deficit through a combination of tax increases and expenditure cuts.   By doing so,  Public Servants,  (and Social Welfare recipients),  on modest salaries,  (tell your details,  if you feel comfortable doing so),  will have cuts imposed on their incomes while others with substantially higher earnings will escape any tax increases.  Stress the unfairness of this

Ø                     Tell of your frustration/hurt/anger at the campaign of vilification of Public Servants by economic commentators and sections of the media.  Explain why you chose public service,  how nobody gets rich in the Public Service and how bewildered/hurt you are to be treated in this shameful way

Ø                     Emphasise that you just want to be treated fairly,  that you are not seeking any special treatment just the right to earn an honest living while doing a job from which the public benefits



 
*DON’T*

·              Slag off Private Sector counterparts.   This artificial Public /Private divide is a creation of those who seek to divide workers.   The tasks of juggling bills and meeting living costs are the same for people in both sectors on similar incomes.  Our many enemies in the media will seek out people to say something controversial abut workers in the Private Sector so that you can be portrayed as greedy and insensitive to people with job insecurity.

·              Waste time ranting about politicians or,  even,  the media.  Express your hurt,  bewilderment or sense of being let down by your employer and/or the media but,  however tempting,  avoid long tirades that will be quoted, (about politicians these will be quoted though most certainly not ones about the media as they know that like Caesar’s wife,  they are as pure as the driven  snow and above reproach).   The point is that slagging off Politicians has become a national sport and does little to advance arguments on behalf of Public Servants.   Just think about  whether headlines with comments describing Politicians  as  ‘wasters’  etc  does anything for our argument. 

·              Try to negotiate with Journalists.  Stick to the basic messages that you want to convey by your presence on the picket line.   Do not be tempted to debate the Journalists’  detailed pet  hobby-horse.   So for instance while if you are asked a leading question about the value of your pension,  you could point  out that more than half of Public Service pensions are for less than  €25,000 per year but,   perhaps more usefully,  you could ask at what point did having an occupational pension become a grievance and then direct the questioner to ask Government  when/if  they intend to address the fact that so many people face inadequate pension cover.  Suggest to your questioner,  therefore,  that he/she  is asking the wrong question of the wrong person.   Keep your  reply on that simple position.   The point here is do not get drawn into a debate and risk being misinterpreted.   Just keep your message simple.

·              Tell Journalists in colourful language what you actually think about their profession in light of their treatment of Public Servants,  (however tempted you might be !) 


I enclose some helpful bullet points also.


Yours sincerely,


T. Geraghty,
General Secretary.


*To  :  All Branch Secs* (except  IAA,  An Post, NLC,  Eircom)


 
*1.    WHAT  WE  WANT*

Ø                     Maintenance of  pay rates   -  no  further reductions
Ø                     No   Compulsory Redundancies
Ø                     No  disimprovements in Pensions

*2.    WHY  WE  ARE  ON  STRIKE*

Ø                     No Group  can be expected to carry the entire burden of the  pain of adjustment in our  public finances

Ø                     Equally no group can be exempt from pain

Ø                     We will make our contribution provided it is fair.   Government should negotiate a fair alternative with our Unions

*3.    WE   HAVE   CONTRIBUTED   ALREADY*

Ø                     In  2009,  Public Servants delivered savings of  €1.3 Bn   (Levy  =  €940m;   Payroll  Savings  due to vacancies  =  €150m;    Pay Freeze   =  €230m)

Ø                     Even  without  additional measures  this will contribute  €2,.4 Bn  in  2010 
            (Levy  =   €1.1Bn;     Payroll Reductions   =  €300m;     Pay Freeze  =  €990m

*4.    WE   ARE   UNITED*

All  Public Service Unions have   

Ø                Backed the defence of  jobs,  pay  and  pensions

Ø                Backed  the strike  on 24  November  and have agreed that further action may be necessary if  Government refuse to negotiate a fair settlement

Ø                An alternative is achievable so that no group shoulders an unfair burden

*5.    WHAT   IS   REQUIRED*

Ø                     Government must quantify and recognise the contribution made by Public Servants

Ø                     Government  must set out its longer term plans for the Public Service so that we do not face continuous threats

Ø                     Government must agree a menu of measures to deliver savings  in 2010  if the longer term approach cannot deliver these savings in 2010.   These measures must respect the need to protect against redundancies,  cuts  in pay rates  and must avoid pensions disimprovements.


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## Protocol (25 Nov 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*



Shawady said:


> Anyone have any idea roughly how much tax relief to pensions (public and private) costs the government per annum?


 

Off the top of my head, in excess of 2bn in *estimated* tax forgeone.


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## Shawady (25 Nov 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*



Protocol said:


> Off the top of my head, in excess of 2bn in *estimated* tax forgeone.


 
According to ERSI report today, a move to a single rate of 30% would save the government 500 million. This would seem like an easy thing to implement as it would be of benefit to lower earners.


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## Sunny (25 Nov 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*



Shawady said:


> According to ERSI report today, a move to a single rate of 30% would save the government 500 million. This would seem like an easy thing to implement as it would be of benefit to lower earners.


 
And screw middle class earners. There was an interesting report done during the week by someone from Trinity. Try and look past the fact that it was commissioned by Irish Life! Think it is being talked about on another thread.


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## Latrade (25 Nov 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*



VOR said:


> Can any one confirm if the word doc below is authentic. If so, it explains how all stories are pitching the same yarn.


 
Not sure, some of the language is a bit too colloquial for official documents.

Interesting though (emphasis mine):



> Tell your personal circumstances. One of the biggest difficulties for Public Service Unions has been to convey the fact that over 200,000 Public Servants are on salaries of less that *€50k per annum*.


 
Not saying whether I think that's a reasonable level or not (not really sure I'd be using 50K to gain sympathy), but the union proposal for the joint incomes of €100k to be taxed at a higher rate. Would include a large proportion of PS/CS employees too by the looks of it.


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## Shawady (25 Nov 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*

Wouldn't see it as screwing the middle class. The government is going to have to raise revenue as well as cuts and this could be an option. If it was introduced at the same time as bringing more low earners into the tax net it might be a runner.
I think the government seem to be talking about a rate of 33% anyway.


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## galleyslave (25 Nov 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*

since when did a 50k salary equate to modest? I thought the industrial average was mid thirties... either I'm getting old and yearning for the good old days when milk was thruppence or somebody is trying to redefince 'modest income'


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## Caveat (25 Nov 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*



Latrade said:


> Not saying whether I think that's a reasonable level or not (not really sure I'd be using 50K to gain sympathy), but the union proposal for the joint incomes of €100k to be taxed at a higher rate. Would include a large proportion of PS/CS employees too by the looks of it.


 
Exactly.

Aside from the authenticity or not of the document wasn't there a full page newspaper ad the other day outlining how 4 in 10 public servants earn less than 40K?  (Didn't see this - maybe someone can confirm)

Neither is 40K a figure that should elicit sympathy or outrage IMO.  I know *plenty *of people earning less than 40K.


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## Sunny (25 Nov 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*



Shawady said:


> Wouldn't see it as screwing the middle class. The government is going to have to raise revenue as well as cuts and this could be an option. If it was introduced at the same time as bringing more low earners into the tax net it might be a runner.
> I think the government seem to be talking about a rate of 33% anyway.


 
I just mean it would take away any benefit for middle class earners to invest in a pension. I agree that lower paid workers should be given more encouragement but I would stop investing with a 30% flat rate because of the tax I will have to pay at the receipt of the pension would not make it worth my while. 

There probably is a better way to work the entire system but not convinced a flat rate is the way to do it.


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## Purple (25 Nov 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*



Caveat said:


> Exactly.
> 
> Aside from the authenticity or not of the document wasn't there a full page newspaper ad the other day outlining how 4 in 10 public servants earn less than 40K?  (Didn't see this - maybe someone can confirm)
> 
> Neither is 40K a figure that should elicit sympathy or outrage IMO.  I know *plenty *of people earning less than 40K.


What proportion of public service employees work part time or job share? Are the unions counting two pwoplw job sharing as one or two salaries when they talk about these things?


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## VOR (25 Nov 2009)

*Re: Public Service Employees, does your before tax salary show a 7-8% cut or a 3-4% c*

Guys, I want to stress again that I was sent that PSEU release but do not know if it authentic. It is not on their website which shows no circulars after Nov 17. However, it is written in the style of other branch circulars from this year.


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