# Lumpsum payments to those retiring



## Firefly (1 Feb 2012)

This isn't a PS rant before I begin, but in the current climate we need to cut costs. By and large, those retiring from the public sector have had a continuous job for life with pay as good as in the private sector. On top of that they have pensions which those in the private sector could ony dream of. Therefore with this lifelong earning and generous pension, they should be ready for retirement...so...is there any justification for these lumpsum payments?


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## Brendan Burgess (1 Feb 2012)

I would go further and say that there is no justification for redundancy payments of any kind, statutory or non-statutory, public or private sector. 

People should be paid fairly for the work that they do when they do it. They should not be paid when they are not working.


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## Slim (1 Feb 2012)

Firefly said:


> This isn't a PS rant before I begin, but in the current climate we need to cut costs. By and large, those retiring from the public sector have had a continuous job for life with pay as good as in the private sector. On top of that they have pensions which those in the private sector could ony dream of. Therefore with this lifelong earning and generous pension, they should be ready for retirement...so...is there any justification for these lumpsum payments?


 
With respect, I think it is a PS rant. Many retire in the private sector with often non contributed occupational pensions of 66% of Final salary. Public sector workers have endured lower pay than private sector for decades, hence the recruitment crisis in the 90s as the celtic tiger started to take off. Only a few years ago, private sector employees mocked their public sector friends for sticking with dead-end, low-paid jobs. Only the recent couple of years has turned then tables somewhat. Many Public Sector workers who are retiring his month are close to retirement age anyway and have accrued these entitlements over nearly 40 years.

The lump sum on retirement is an accounting equivalent of the difference between the 50% public sector pension and the 66% private sector pension.

I would agree with you on the obscene packages paid to those at the top of the public/civil service. Greater obscenities have been bestowed on those in charge of the banks over the past few years, not to mention government ministers.


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## Purple (1 Feb 2012)

Can Slims post be split to a different thread?
I'd like to reply as most of it is incorrect and I'd hate to think anyone would read it and be mislead, but it's also off topic.


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## Chris (1 Feb 2012)

Brendan Burgess said:


> I would go further and say that there is no justification for redundancy payments of any kind, statutory or non-statutory, public or private sector.
> 
> People should be paid fairly for the work that they do when they do it. They should not be paid when they are not working.



I agree Brendan, there should be no law forcing to pay redundancy. If employers and employees are willing to put some sort of redundancy agreement in an employment contract then so be it., but this should not be forced by law.


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## ANORAKPHOBIA (1 Feb 2012)

Purple said:


> Can Slims post be split to a different thread?
> I'd like to reply as most of it is incorrect and I'd hate to think anyone would read it and be mislead, but it's also off topic.


 
With respect I would contend that Slim is making more sense than the other posters in the thread.


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## onekeano (1 Feb 2012)

Brendan Burgess said:


> I would go further and say that there is no justification for redundancy payments of any kind, statutory or non-statutory, public or private sector.
> 
> People should be paid fairly for the work that they do when they do it. They should not be paid when they are not working.



Should they be paid when they are out sick Brendan?

Roy


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## Protocol (2 Feb 2012)

Pension lump-sum payments are not redundancy payments.

They are a reflection of the difference between the 50% pension in the PS and the typical 66% pension in non PS DB pensions.


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## Firefly (2 Feb 2012)

Protocol said:


> Pension lump-sum payments are not redundancy payments.
> 
> They are a reflection of the difference between the 50% pension in the PS and the typical 66% pension in non PS DB pensions.


 
As per Purple's post it would be very easy to drag this off topic (the *vast* majority of private sector workers do not have such a pension). In any case these private sector pensions are only as good as the employer's finances (Look at what happened the workers at Waterford Crystal). In any case, the taxpayer has to borrow money to pay these lumpsums and in the current climate I can't see any justification for this. There is already an excellent pension as well as a job for life that went before it so surely this provides the employee with enough?


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## Purple (2 Feb 2012)

Must ...try... to...stay...on...topic...


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## Protocol (2 Feb 2012)

Firefly,

I agree that workers should make more conts, which they now do.

I think that existing PS pensions should take a bigger cut.

But focussing too much on the lump-sum gets away from the idea that it is just the captalised value of the 16% difference in pensions.


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## Protocol (2 Feb 2012)

Some senior civil servants get a severance payment of 1 years pay, as well as the normal lump-sum.

I am against that.


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## 44brendan (2 Feb 2012)

Whether we (as the non public sector taxpayers) are against or for the payment of these monies appears to be largely ignored  by the decision makers.
Yes, the decisions on the issues are made by the Government. However, the advisors to the Government on these issues would themselves be Public Sector workers with a high level of personal interest in the decision making process.
My difficulty with these payments is the effect of the "Yes Minister" type of decision making. I.e. The process may be fair and equitable, but it is not open. If we could be assured that the decisions on these issues were impartial and based on commercial ralities rather than partiality, we would feel more comfortable with them.


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## Firefly (2 Feb 2012)

Protocol said:


> Firefly,
> 
> I agree that workers should make more conts, which they now do.
> 
> ...


 

Most private sector workers do not get these pensions so why should the public sector worker get this lumpsum? Indeed, it looks like the best of what's offered to some in the private sector is given to all in the public sector in this case. There are plenty who get nothing from their employer so why not match this in the public sector?

In any case it doesn't matter. The employer (in this case the government/taxpayer) is broke. costs need to be cut and this looks like a politically easy one for me...afterall it's the closest thing to free money.


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## ashambles (2 Feb 2012)

I’d consider the tax treatment of the lump sum an uglier problem.  Seeing senior public servants or ministers retire with several hundred thousand euro tax free, is obscene. They remind me of Leona Helmsley who said taxes are for the little people.

  I realize they’ve capped the amount that can be drawn tax free, seemingly tax free up to 200k, then 20% up to 575k, and 41%+USC beyond that.   Still too generous and who’s asking for this to be even partially tax free, on the private sector side I’d guess no one but the wealthy. 

  The whole justification for pension tax relief is that you don’t pay on the way in, but do on the way out. Nobody with any sense of fairness would expect tax relief on the way in and out.

  Any defense about being contractually obligated to pay these out is nonsense, just tax them at near 100%.


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## Purple (2 Feb 2012)

Protocol said:


> But focussing too much on the lump-sum gets away from the idea that it is just the captalised value of the 16% difference in pensions.



Repeating that over and over again doesn't make it true. 
The 16% is nonsense, utter rubbish.

New entrants to the Public Sector are being screwed to pay for those who are closer to retirement. Solidarity how are ya. Typical unions; protecting the have's from the have-not's. 
If only screwing the new entrants was enough though. The fact is that general taxation is used to pay the gold-plated pensions of the grey cohort in the Public Sector and even if it wasn’t existing deductions/contributions from pay wouldn’t come anywhere close to funding the pension cost. 
Greed and selfishness by public sector workers over the last decade, looking for and getting massive pay increases that increased the gap between average public and private sector pay rates (and don’t even look at their terms and conditions), have left us with a situation where classes are getting bigger in schools and queues are getting longer in hospitals. If these ridiculous lump-sums were stopped and pensions were cut by the same rates that pay has been cut then lives would be saved and children with special needs would get the care they need. But for that we’d need more public servants, and more particularly more public sector unions, who care more about providing services to the public and less about getting their snouts in the trough. (why not construct the above comparison since paying debts etc is usually blamed by the unions etc). 
I know teachers who are still bemused about the pay increases they got over the last 10 years. They would have preferred to see smaller classes, better schools and more support resources.


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## Chris (10 Feb 2012)

onekeano said:


> Should they be paid when they are out sick Brendan?


Sick pay is not mandatory, but yet most employers offer it anyway; employers and employees decide on sick pay between themselves. The same should apply to redundancy pay.



44brendan said:


> Whether we (as the non public sector taxpayers) are against or for the payment of these monies appears to be largely ignored  by the decision makers.
> Yes, the decisions on the issues are made by the Government. However, the advisors to the Government on these issues would themselves be Public Sector workers with a high level of personal interest in the decision making process.
> My difficulty with these payments is the effect of the "Yes Minister" type of decision making. I.e. The process may be fair and equitable, but it is not open. If we could be assured that the decisions on these issues were impartial and based on commercial ralities rather than partiality, we would feel more comfortable with them.



Well said.


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## W200 (28 Feb 2012)

Firefly said:


> This isn't a PS rant


Correct me if im wrong but were not all PS jobs advertised publicly when such vacancies arose with all conditions attached. 
If YOU did not wish to apply for such jobs and instead decided to stick to the private sector perhaps charging Euro 2 per brick laid or Euro 10 per lenght of copper pipe bent them I suggest you backed the wrong horse my friend.
Perhaps you should look at where you got it wrong before suggesting how those who took the steady but dependable path should suffer .


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## putsch (28 Feb 2012)

W200 said:


> Correct me if im wrong but were not all PS jobs advertised publicly when such vacancies arose with all conditions attached.
> If YOU did not wish to apply for such jobs and instead decided to stick to the private sector perhaps charging Euro 2 per brick laid or Euro 10 per lenght of copper pipe bent them I suggest you backed the wrong horse my friend.
> Perhaps you should look at where you got it wrong before suggesting how those who took the steady but dependable path should suffer .



What is "public" sector and what is "private" sector? Are AIB and BoI public sector? This discussion is so simplistic as to be meaningless. So I'd just like to offer some observations.

I have worked in both public sector and private sector. When I worked in the public sector  in the dark days of the 1980s and 1990s my salary was a pittance beside that of my private sector equivalents - all professionals like me. But  I couldn't afford to buy a house - they bought large houses in nice suburbs, I got a 10 year old banger - they had brand new cars. I continued to work at the job because I believed in it.

Working now in the "private" sector I am amazed at the perks that still exist despite the economy.....I never realised the scale of the bonuses available, the share option schemes, the pension contributions, the car allowances, the health subscriptions paid and even the sports club subs - all these regarded as routine in some parts of the private sector. Very nice too.


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## W200 (28 Feb 2012)

putsch said:


> What is "public" sector and what is "private" sector? Are AIB and BoI public sector? This discussion is so simplistic as to be meaningless. So I'd just like to offer some observations.
> 
> I have worked in both public sector and private sector. When I worked in the public sector  in the dark days of the 1980s and 1990s my salary was a pittance beside that of my private sector equivalents - all professionals like me. But  I couldn't afford to buy a house - they bought large houses in nice suburbs, I got a 10 year old banger - they had brand new cars. I continued to work at the job because I believed in it.
> 
> ...


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## sophie 4 (29 Feb 2012)

'Suffer'-The private sector creates the wealth that pays most of the taxes. The pay and pension bill for the PS is horrendous in this country.
If PS want pensions pay your own in full and stop whinging. Frankly, most PS wouldn't last long in the private sector as the culture is one of customer service, hard work, common sense. The public service is challenged even in answering the phones.


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## Firefly (29 Feb 2012)

Leper said:


> You could have fooled me


 
Where have I ranted? I asked a simple question if you read my initial post.


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## Firefly (29 Feb 2012)

W200 said:


> Correct me if im wrong but were not all PS jobs advertised publicly when such vacancies arose with all conditions attached.
> If YOU did not wish to apply for such jobs and instead decided to stick to the private sector perhaps charging Euro 2 per brick laid or Euro 10 per lenght of copper pipe bent them I suggest you backed the wrong horse my friend.
> Perhaps you should look at where you got it wrong before suggesting how those who took the steady but dependable path should suffer .


 
I'm not going to get into defending my career decisions (which are working out quite well) for you. Indeed, what does my individual position have to do with anything? If someone working in the Public Sector asked the question I asked in my initial post, would you have responded the same? Feel free to answer the original question by the way and perhaps even provide a few reasons with your answer.


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## Purple (1 Mar 2012)

W200 said:


> Perhaps you should look at where you got it wrong before suggesting how those who took the steady but dependable path should suffer .



Why do so many people use this sort of rhetoric when talking about reducing government expenditure?
Just because pay levels/perks/pensions have to be cut it doesn’t follow that those who are on the receiving end are to blame for the current state of the state finances, such arguments are juvenile and irrelevant. The state is bankrupt and has to spend less. It’s as simple as that. Therefore people who are employed by the state have to take pay cuts and/or lose their job. Their culpability or otherwise for the problems we face doesn’t come into it. The same holds true for people employed by a private company that’s losing money or going bust.


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## Purple (1 Mar 2012)

W200 said:


> I have worked in both public sector and private sector. When I worked in the public sector  in the dark days of the 1980s and 1990s my salary was a pittance beside that of my private sector equivalents - all professionals like me. But  I couldn't afford to buy a house - they bought large houses in nice suburbs, I got a 10 year old banger - they had brand new cars. I continued to work at the job because I believed in it.




I take it that you are aware that average pay levels in the Public Sector have always been greater that those in the Private Sector and that during the boom years that gap increased. That’s despite the propaganda trotted out by the Commissars in the Trade Unions and was a result of two trips to the Benchmarking ATM and the host of other pay hikes enjoyed by the Public Sector. 
I agree that building trades (amongst others) charged scandalous amounts during the boom but thankfully the whole building sector has collapsed and prices are getting back to what could be described as reasonable, even if quality is still as bad as ever.


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## zztop (6 Mar 2012)

2 trips to the ATM..
No payment was ever given on foot of the 2nd benchmarking exercise as
reported in Dáil question time.I expect it wont be paid now


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## liaconn (23 Mar 2012)

sophie 4 said:


> 'Suffer'-The private sector creates the wealth that pays most of the taxes. The pay and pension bill for the PS is horrendous in this country.
> If PS want pensions pay your own in full and stop whinging. Frankly, most PS wouldn't last long in the private sector as the culture is one of customer service, hard work, common sense. The public service is challenged even in answering the phones.


 
What a lazy,generalised meaningless post. I have come across lots of areas of the private sector which are badly managed, and have poor customer service. I'm not saying some areas of the public sector also don't offer poor customer service but it's not across the board and it's not exclusive to the public service. This myth that public sector workers 'wouldn't last a day' in the private sector has been done to death.

On topic, as other posters have said, public sector jobs were open to everyone. Some people opted for the high salary but higher risk private sector jobs. Others spent many many years in poorly paid public service jobs with a guaranteed pension and lump sum at the end. If people want these terms and conditions changed going forward that's one thing. To tell someone at the end of their career that you're now going to change something important that formed part of their risk calculation is a separate thing and would be very unfair in my view.


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## Purple (24 Mar 2012)

liaconn said:


> On topic, as other posters have said, public sector jobs were open to everyone. Some people opted for the high salary but higher risk private sector jobs. Others spent many many years in poorly paid public service jobs with a guaranteed pension and lump sum at the end. If people want these terms and conditions changed going forward that's one thing. To tell someone at the end of their career that you're now going to change something important that formed part of their risk calculation is a separate thing and would be very unfair in my view.


Wages in the public sector are higher than wages in the private sector. This was the case before the boom and during the boom the gap got bigger, not smaller. If you look at the total value of the package (pension, working hours, sick-pay, etc) then the gap gets bigger again. 
Back on topic; there is no link between those that are facing the cuts are those that are "to blame" for our problems and nor should there be. This isn't primary school. If you lose your job and your family income goes down your teenaged kids are hardly going to say "but it's not my fault so why is my pocket money being cut?" Your 6 year old might say that though.


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