# Pension - Is it worth it or not?



## world201812 (16 Aug 2017)

I was previously part of a DB scheme which went ‘bust’, and I have a new pension scheme/employer of late, in the private sector.

As a non-public sector employee I understand that as things stand, a private sector employee gets the state pension of €230 per week plus their employer pension, while a public servant doesn’t get the €230 per week?

My fear around the whole pension thing is putting something away that could go ‘bust’ as before, and the other concern is will the government likely ‘means test’ the pension 30 years from now?

As in if I don’t make any pension provision I might get the state pension, but, if I set-up a private pension the government could turn around and say ‘you aren’t getting the state one now’..

Would I be safer as a private sector person just stashing cash away, and not be at the whim of a change in government policy?

My concern around the means test is I know with the likes of unemployment benefits, people with savings are punished after nine months or so of a payment being received.

It seems you get punished for being ‘prudent’.


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## Sarenco (16 Aug 2017)

This topic has already been discussed at some length:-
https://www.askaboutmoney.com/threads/should-i-just-save-money-or-contribute-to-a-pension.170752/

FWIW, I don't think there is any real likelihood that the contributory State pension will be abolished entirely (leaving only the means-tested State pension).  Today's civil servants and TDs will qualify for the contributory State pension and turkeys are not inclined to vote for Christmas!

Remember that post-tax savings can also get clobbered by the government of the day.  For example, DIRT was increased to 41% in the wake of the financial crisis regardless of a depositor's income level.


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## Steven Barrett (16 Aug 2017)

It would be utterly irresponsible for any government to encourage people not to plan for their own retirement. To fund the OAP would cost c. €300,000 for a private individual. If people thought they had to reach that benchmark to get anything from the State, a huge amount of people wouldn't bother saving anything at all in case they were means tested. 

Then there's the issue that PRSI is supposed to pay for your OAP (we all know it doesn't, but that's what's peddled). How are they going to justify telling someone who contributed PRSI for 40 years that they're getting nothing, while someone who spent their life on the dole gets €12,000 a year. 

In Sarenco's line of turkeys not voting for Christmas, politicians tend not to bring in legislation that will see them immediately out of a job. 




Steven 
www.bluewaterfp.ie


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## cremeegg (16 Aug 2017)

world201812 said:


> My fear around the whole pension thing is putting something away that could go ‘bust’ as before,



A defined contribution scheme cannot go "bust" in the same way that a defined benefit scheme can. This is because a DC scheme takes your money, invests it and pays out whats left at the end. It can certainly perform poorly, but that is not the same thing as going "bust",. Also there are various investment options available to reduce the likelihood of investment losses.





world201812 said:


> and the other concern is will the government likely ‘means test’ the pension 30 years from now?



Ok, I don't know how the government will deal with the looming pensions crisis. I do know that the ratio of retirees to workers will increase in the coming years making the existing state pension, contributory or old age unsustainable. So it is quite possible that the contributory pension will be subject to some form of means testing in the future.





SBarrett said:


> How are they going to justify telling someone who contributed PRSI for 40 years that they're getting nothing, while someone who spent their life on the dole gets €12,000 a year.



This seems a naive question to me. At present those who pay PRSI for 40 years get the same pension as those who pay nothing, so we are already half way there.


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## Sarenco (16 Aug 2017)

In 25 years' time it is projected that there will be over 1.4 people aged 65 and over (roughly 22% of the projected population).  Means-testing that proportion of the population would be a mammoth and very costly exercise.

It seems far more likely to me that future governments will seek to contain spiralling pension costs by some combination of the following:-

Reducing the tax advantages currently enjoyed by our seniors;
Reducing the current caps on private (tax-advantaged) pensions; 
Reducing the level of all State pensions; and
Further increasing the age at which State pensions become payable.
It is certainly _possible _that the contributory State pension will be abolished but I personally think that is highly unlikely. Aside from the political difficulties, there are far more practical and cost effective ways of tackling or containing this issue.


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## cremeegg (16 Aug 2017)

Sarenco said:


> In 25 years' time it is projected that there will be over 1.4 people aged 65 and over (roughly 22% of the projected population).



That is the issue and it is easy to loose sight of the size of the issue when discussing some of the options.




Sarenco said:


> Means-testing that proportion of the population would be a mammoth and very costly exercise.



Any one who wants a pension has to apply and demonstrate their eligibility. This is how student grants and nursing home grants are done at present



Sarenco said:


> It seems far more likely to me that future governments will seek to contain spiralling pension costs by some combination of the following:-
> 
> Reducing the tax advantages currently enjoyed by our seniors;


Do you mean the additional personal allowance, are there other such advantages. This seems unlikely to make a meaningful contribution to resolving the problem




Sarenco said:


> Reducing the current caps on private (tax-advantaged) pensions;



That would only have an effect when the workers contributing to pensions retired, so unless done well in advance not really relevant. Also while I dont have figures I cannot imagine that the number of people with pots large enough to pay more than the existing state pension would be significant in the context of the problem.





Sarenco said:


> Reducing the level of all State pensions; and



Highly likely even inevitable




Sarenco said:


> Further increasing the age at which State pensions become payable.



Highly likely even inevitable


Sarenco said:


> It is certainly _possible _that the contributory State pension will be abolished but I personally think that is highly unlikely. Aside from the political difficulties, there are far more practical and cost effective ways of tackling or containing this issue.


You will have to try harder to convince me that you have identified them.


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## Gordon Gekko (16 Aug 2017)

Hi Sarenco,

It will be challenging for public servants to reduce the pension cap on the basis that it affects both public and private pensioners.

Yes there's a circa £1m cap in the UK, but couples can bounce upwards of £30k into ISAs so it's not comparing like with like.

Gordon


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## Sarenco (16 Aug 2017)

cremeegg said:


> You will have to try harder to convince me that you have identified them.



Sorry Cremeegg but I really don't feel under any obligation to "try harder".  I simply expressed an opinion on an open forum - I really couldn't care less if I never convinced you of anything.


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## Sarenco (16 Aug 2017)

Gordon Gekko said:


> It will be challenging for public servants to reduce the pension cap on the basis that it affects both public and private pensioners.



Absolutely agree - which is why I tried to emphasise that an effective reduction in all State pensions is likely to form part of any future effort to contain a spiralling pension bill.

There are other ways of capping pension benefits beyond reducing the SFT - for example, the tax-free lump sum ceiling could be further reduced.

But really my main point is that there are other viable options available to future governments to contain an escalating pension bill that would be (a) less politically toxic; and (b) less of an administrative nightmare, than attempting to means-test all State pensions.


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## jjm (17 Aug 2017)

Sarenco said:


> Absolutely agree - which is why I tried to emphasise that an effective reduction in all State pensions is likely to form part of any future effort to contain a spiralling pension bill.
> 
> There are other ways of capping pension benefits beyond reducing the SFT - for example, the tax-free lump sum ceiling could be further reduced.
> 
> But really my main point is that there are other viable options available to future governments to contain an escalating pension bill that would be (a) less politically toxic; and (b) less of an administrative nightmare, than attempting to means-test all State pensions.



The government will have no say they will be told what to do by there money masters and the turkeys will have nowhere to go unlike people who have a private pension pot built up ,my advice to the turkeys and everyone else is if possible put in the max allowed tax free into your pension  the younger you start the better options you have to max your return ,


At present because of the way our public service pensions are set up Ireland has a very good tax break in place for people who set up a private pension and people should take advantage of it while it still in place,

the unspoken word reading between the lines is not only will the tax-free lump sum be removed but we will see a type of benefit in kind tax on pension payout on the part not funded by the person through there own  pension contributions. I suspect this will be some kind of Self Assessment the turkeys will be sitting ducks  and there masters who they have control of at present will be powerless to do anything for them,

We already seen the rehearsals when the trioka came to town the forced the government to reduce pensions by law the government could not reduce pensions belonging to the turkeys if it was  challenged in the courts  they  turkeys  would have won ,The people involved knew the people of Ireland would not stand for it so they knew better than to go down that road  , When people say we have 300 bn of a unfunded pension liability at present you only have a liability  if you have got the money to pay up ,Contracts are ok if the people who issued them have the money to pay,

You only have to look at other posts on this forum to see how Working taxpayers are not going to hand over there hard earned money to other people who they know are well off. We are beginning to see the results of the Government not being able to borrow to feed the turkeys and the people creating the wealth and providing the services questioning  there share and the rest will have to share the crumbs between them


The working people creating the wealth and providing the services  are both public and private sector on above average wages .most of the others are milking the system and can be done without.

Turkeys may not vote for Christmas but can the turkeys stop Christmas from coming,long term the people who have a pension pot will leave the sinking ship bringing there pension pot with them .there will be lots of warning signs for them to get out in time if they have a big enough pension pot built up  to bring with them ,There will be lots of places where they will be welcome with there pension pots,


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## cremeegg (17 Aug 2017)

Sarenco said:


> Sorry Cremeegg but I really don't feel under any obligation to "try harder".  I simply expressed an opinion on an open forum - I really couldn't care less if I never convinced you of anything.



Well if you expect your opinions to be taken seriously you need to support them with arguments or evidence.

You have said



Sarenco said:


> In 25 years' time it is projected that there will be over 1.4 people aged 65 and over (roughly 22% of the projected population).  Means-testing that proportion of the population would be a mammoth and very costly exercise.



But you have not adduced anything by way of support for this opinion.

Now in my opinion it would be easy to administer a means tested pension, but I have tried harder, I have brought some evidence to support my opinion.



cremeegg said:


> Any one who wants a pension has to apply and demonstrate their eligibility. This is how student grants and nursing home grants are done at present



I may not be correct in this opinion, but at least I have tried to provide a supporting argument.

If you just want to throw opinions out without the slightest effort to back them up thats fine, and make grumpy comments to any one who disagrees with you, thats fine too.

I will continue to try to support my opinions with evidence or argument as far as possible, and will take more seriously those other posters who make the effort to do the same.


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## Sarenco (17 Aug 2017)

cremeegg said:


> Well if you expect your opinions to be taken seriously


I have no such expectation, Cremeegg. 

Again, I am not trying to convince you of anything - I simply expressed an opinion.  I hope that's ok with you.


cremeegg said:


> But you have not adduced anything by way of support for this opinion.


The demographic projections come from the Centre for Aging Research and Development in Ireland (CARDI).

I would have thought it was absolutely self-evident that attempting to means-test such a significant proportion of the population would be a massive undertaking.  You obviously take the view that it would be straightforward to administer but I would point out that successive governments have avoided trying to target (ie mean-test) child benefit - primarily because they know that it would be an unpopular, bureaucratic nightmare.



cremeegg said:


> I have brought some evidence to support my opinion.


You really haven't you know.  That's fine by me - I'm certainly not going to be rude enough to ask you to "try harder".


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## mtk (17 Aug 2017)

Difficult one alright .....
One major disadvantage I see in Ireland is the unpredictability of gov policy


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## cremeegg (17 Aug 2017)

Sarenco said:


> The demographic projections come from the Centre for Aging Research and Development in Ireland (CARDI).



We seem to be in agreement on this point. Indeed I think it was I who raised it first on this thread see post 4.



Sarenco said:


> I would have thought it was absolutely self-evident that attempting to means-test such a significant proportion of the population would be a massive undertaking.



As I have suggested a model whereby people apply and prove eligibility, such as is used in the student grant scheme, for broadly similar numbers, could be used. While the SUSI model certainly had some initial issues, it appears to work reasonably well at present with modest resources.




Sarenco said:


> I would point out that successive governments have avoided trying to target (ie mean-test) child benefit - primarily because they know that it would be an unpopular, bureaucratic nightmare.



Now unpopular is a different matter, again I would agree that means testing the contributory pension would be hugely unpopular.


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## jjm (17 Aug 2017)

world201812 said:


> I was previously part of a DB scheme which went ‘bust’, and I have a new pension scheme/employer of late, in the private sector.
> 
> As a non-public sector employee I understand that as things stand, a private sector employee gets the state pension of €230 per week plus their employer pension, while a public servant doesn’t get the €230 per week?
> 
> ...



First off since 1995 Public servants pay prsi the same as private sector workers and get the same pension as a private sector worker they also pay into a pension to bring them up to 50% of there final or last 3 years in some cases last 10 years  after 40 years service in most cases not all,There was changes around 2013 and it was changed to average wage pension  is not as good

so retiring public servants who have enough years get the state pension as a person in the private sector of around  230 euro this is taken from there 50 % of final salary in other words they if they are to get a pension of 345 per week 230 is the state pension and 115 is from there employer at present the dice is loaded slightly against the private sector worker paying the same prsi this is private workers own fault for allowing this to happen,

The Workers friend Joan Burton was in charge when the dice was loaded against the private sector worker it cannot be said often enough in case Labour think we have short Memories


from 2013 on public and  private sector worker who had to retire at 65 had to go on job seekers allowance which was 188 euro in 2013 leaving the private sector worker short 42 euros, the government gave the public sector back the 42 euro to bring them up to the same amount before the change so the only one to lose out was the private sector worker when Joan Burton done away with the transitional year in 2013

The reason this need to be highlighted is it will have a knock on affect long term if the government start to cut the state pension any cut in state pension will only affect private sector workers the cuts will come out of the PRSI fund and the government will make up any cut suffered by the public servant from general taxation so any future cut in the state pension only affects private sector workers having paid the same amount of prsi ,you have to admire the public sector workers  for watching there corner ,Private sector workers are being led by a silk thread and being short changed they have no one to blame but them self,


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## jjm (17 Aug 2017)

cremeegg said:


> We seem to be in agreement on this point. Indeed I think it was I who raised it first on this thread see post 4.
> 
> 
> 
> ...



How can you mean test the contributory pension it will only affect the private sector worker all that will happen is every euro you cut from a public sector contributory pension on the prsi side will have to be added back out of general taxation to to bring pension back up to they same amount again I know it is going on at present small scale but it is not hurting anyone big time yet ,there will be a lot more pensioners by then ,love to see how you are going to propose getting around that problem ,


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## cremeegg (17 Aug 2017)

jjm said:


> if the government start to cut the state pension any cut in state pension will only affect private sector workers... the government will make up any cut suffered by the public servant from general taxation



This is an extremely important, made in jjm's inimitable, impenetrable style.

Public sector workers get a pension 50% of their final salary averaged over 3 years (as i understand it)

Now this is often portrayed as the state pension, for which they pay PRSI, plus a pension from their employment for which they pay contributions.

If the state pension is cut does the public sector pension from employment automatically bring them back to the 50%. I am asking if anyone knows rather than predictions as to what may happen in future.


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## cremeegg (17 Aug 2017)

Our posts seem to have crossed.

This is a very important question:



jjm said:


> every euro you cut from a public sector contributory pension on the prsi side will have to be added back out of general taxation to to bring pension back up to they same amount again



Do you know that this is the case in the existing terms of the public sector pension or are you just predicting the future.


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## Early Riser (17 Aug 2017)

cremeegg said:


> This is an extremely important, made in jjm's inimitable, impenetrable style.
> 
> Public sector workers get a pension 50% of their final salary averaged over 3 years (as i understand it)
> 
> ...



I am not sure about the new single scheme (post 2012 entrants). For Class A public servants prior to that date the maximum final pension (full service) equates to 50% of pensionable salary (usually average of final 3 years). This is inclusive of State Pension. So for a person entitled to full pension his/her final pension would consist of :Occupational Pension + State Pension = 50%. Therefore, the occupational pension component varies in relation to the State Pension level (if state pension is lower the Occ. Pension should be higher).


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## jjm (17 Aug 2017)

cremeegg said:


> Our posts seem to have crossed.
> 
> This is a very important question:
> 
> ...



this is the present position


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## jjm (17 Aug 2017)

Early Riser said:


> I am not sure about the new single scheme (post 2012 entrants). For Class A public servants prior to that date the maximum final pension (full service) equates to 50% of pensionable salary (usually average of final 3 years). This is inclusive of State Pension. So for a person entitled to full pension his/her final pension would consist of :Occupational Pension + State Pension = 50%. Therefore, the occupational pension component varies in relation to the State Pension level (if state pension is lower the Occ. Pension should be higher).



it already is in place when Joan Burton done away with the transitional pension for people who had to retire at 65 in 2013 the the private sector worker was down 42 euro until the were 66 the public sector worker would have the 42 euro per week added out of  general taxation, There are lots of other examples but there is no point in muddying the water


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## jjm (17 Aug 2017)

jjm said:


> it already is in place when Joan Burton done away with the transitional pension for people who had to retire at 65 in 2013 the the private sector worker was down 42 euro until the were 66 the public sector worker would have the 42 euro per week added out of  general taxation, There are lots of other examples but there is no point in muddying the water


they only way of explaining it is
tom the private sector worker has a  total pension of 460 made up of 230 prsi pension and 230 from a pension he paid into he is mean tested and the prsi pension  is  cut to 30 euro so he now has a pension of 230 private and 30 prsi total 260

Tom the public servant worker has a total pension of 460 made up of 230 prsi pension and 230 from a pension he paid into he is mean tested on the prsi pension and it is cut to 30 euro he now has a pension of 30 euro prsi pension his other pension is increased by 200 euro  to make up for the  means test cut in his prsi pension so he still has 460 of a pension,


tom the private sector worker is delighted because he knows most of the 1.4 million pensioners are made up of private sector workers and the dice will swing back to being fair to both people who paid the same amount of PRSI,the only way around it would be to slowly lower the prsi pension over many years but you have 1.4 million pensioners to pull the wool over there eyes without any of them spotting what is going on


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## Early Riser (17 Aug 2017)

jjm said:


> There are lots of other examples but there is no point in muddying the water



jjm, I haven't been following this discussion so I am obviously lacking enough context to grasp the point you are making. And I am not sure if you are accusing me of muddying the waters, but I was simply replying to a question by cremeegg. I have no beef in this discussion one way or the other.

Just to clarify one thing though. The example I gave relates only to a Public Sector worker at State Pension age. Retiring at 65 (or younger) the situation is a bit more complicated (too much more complicated to derail this thread for). However, the principle still applies. Whatever the total pension amount due, the lower the prevailing state pension rate, the higher the occupational pension element will be to make up the total .


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## jjm (17 Aug 2017)

Early Riser said:


> jjm, I haven't been following this discussion so I am obviously lacking enough context to grasp the point you are making. And I am not sure if you are accusing me of muddying the waters, but I was simply replying to a question by cremeegg. I have no beef in this discussion one way or the other.
> 
> Just to clarify one thing though. The example I gave relates only to a Public Sector worker at State Pension age. Retiring at 65 (or younger) the situation is a bit more complicated (too much more complicated to derail this thread for). However, the principle still applies. Whatever the total pension amount due, the lower the prevailing state pension rate, the higher the occupational pension element will be to make up the total .


Earley Riser sorry you never entered my head too much more complicated is the word i should have used( I did not want to be muddying the water referring to myself .Glad you picked me up on it other wise I would not have noticed you may have taken offence

,the only beef I have in this is money collected from both public and private sector in prsi some needs to be ring fenced for there pension now, all public servants pension contributions need to be ring fenced also,I know that would not be enough to meet there pension  when the retire there employer the taxpayer will still need to fund it at that time seeing they are not contribution now,Where I work we still have a Defined benefit and the employer pays two thirds and employee pays one third it is well managed and funded and I will be retiring next year I  would like to thing that people in important positions in government stopped kicking the can down the road when they know it may not affect them and don't care about there fellow workers retireing in years to come,


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## Early Riser (17 Aug 2017)

jjm said:


> Glad you picked me up on it other wise I would not have noticed you may have taken offence



No offence taken at all,jjm. I was only clarifying.


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## Gordon Gekko (17 Aug 2017)

This country is in huge danger of lurching way too far to the left.

As in many other countries, Globalisation has meant that the incomes of those who are either too lazy or too stupid to adapt have not kept pace with general growth, and never will. The taximan who once earned €80k a year and chose his hours has been displaced by the economic migrant who will work for anything.

It's inevitable that the constituency in question will gather behind Sinn Fein/PBP/etc. And the next step? A land grab against those who were neither lazy nor stupid. Watch the anti-private pension/anti-PPR relief/anti-inheritance narrative gather momentum. Populism ahoy...


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## cremeegg (17 Aug 2017)

jjm said:


> money collected from both public and private sector in prsi some needs to be ring fenced for there pension now, .....I know that would not be enough to meet there pension



What you say is correct but you are missing the bigger point.

If the PRSI contributions of todays workers were set aside to pay their pensions when they retire, how would the pensions of those who are already retired be paid.


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## jjm (17 Aug 2017)

cremeegg said:


> What you say is correct but you are missing the bigger point.
> 
> If the PRSI contributions of  workers were set aside to pay their pensions when they retire, how would the pensions of those who are already retired be paid.



No i am not missing the bigger point
I am well aware that 70% of what is taken in PRSI is spent on pensions

I am also well aware that a large % of the people claiming from the fund have paid in very little in prsi some only had to pay a yearly amount of around 200 Euro to get there pension  for 10 years others as you know well only pay a total of 4% of payroll,While Private and public sector workers there is 14.5% of payroll stopped and put into the prsi fund ,I hope you don't mind it drives some posters mad but up until the usc came in it was higher it was 18.5% of payroll was stopped in2013 before that average was around 16.5%  going back years I came across a payroll wage slip for 1986 or 1987 and 15% of payroll was stopped in that year,

The PAYE worker paying PRSI CLASS A1 including  public service since 1995 and private sector workers since around 1970 have payed in enough to be entitle to a full pension ,

The government parachuted a lot of people who paid very little in to the prsi fund so there needs to be money transferred from general taxation to cover them ,
People who have paid very little in should start paying a benefit  in kind tax that will be ring fenced for the next generations pensions

You can now get a record of every single weeks prsi contributions, I phoned Donegal office  for my own records and had a full record going back over 40 Years within 2 days it was spot on it shows what type of prsi
and covered every week,
When we are talking about fiscal space and how much is available  to spend first in the queue should be  a requirement  to replace prsi squandered in the past,

There should be no rainy day fund it should be put into the ring fenced PRSI Fund .

In fact if the last rainy day fund was in a prsi fund we could not be forced to waste it on bailing out the banks,

word needs to be got out there that the public are expecting if the government meets a problem  with unfunded pensions people who paid full PRSI A1 for 40 year are first in the queue we need to start a debate not about the 300bn in unfunded pensions but how much the PRSIA1 part is and address it,


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## Dan Murray (17 Aug 2017)

Gordon Gekko said:


> Globalisation has meant that the incomes of those who are either too lazy or too stupid to adapt have not kept pace with general growth, and never will.



Gordon,

I find this sentence very crude.


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## Gordon Gekko (17 Aug 2017)

Dan Murray said:


> Gordon,
> 
> I find this sentence very crude.



You are entitled to your view; I find the sense of entitlement amongst that cohort abhorrent.


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## Sarenco (17 Aug 2017)

That's fair enough Gordon but in my experience an unmerited sense of entitlement is not confined to any particular cohort.  People often underestimate the role of luck in life.


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## Gordon Gekko (18 Aug 2017)

Sarenco said:


> That's fair enough Gordon but in my experience an unmerited sense of entitlement is not confined to any particular cohort.  People often underestimate the role of luck in life.



They do to be fair, but in my experience, the begrudgers' plight tends to be self-inflicted.


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## Early Riser (18 Aug 2017)

Gordon Gekko said:


> As in many other countries, Globalisation has meant that the incomes of those who are either too lazy or too stupid to adapt have not kept pace with general growth, and never will. The taximan who once earned €80k a year and chose his hours has been displaced by the economic migrant who will work for anything.



Gordon -Check out attribution theory - part of the human condition.

Simplistically :

When something "bad" happens to,or is manifest by others  - we tend to attribute it to internal factors ,eg, laziness, poor judgement, lack of foresight, stupidity, bad personality,etc.

When something bad happens to ourselves (or one of "ours")  -  we tend to attribute it to external factors, eg, bad luck, chance, provoked, bad decisions of others, "the company",etc.

When something "good" happens we others we tend to attribute it to external factors,"right place at right time", got lucky, always going to do well with his background, etc.

When something good befalls us  - we tend to attribute it to internal factors, "worked hard for it", intelligence, made clever choices, good personality traits.


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## jjm (18 Aug 2017)

"Sarenco, post: 1526336, member: 87373"]This topic has already been discussed at some length:-
https://www.askaboutmoney.com/threads/should-i-just-save-money-or-contribute-to-a-pension.170752/

FWIW, I don't think there is any real likelihood that the contributory State pension will be abolished entirely (leaving only the means-tested State pension).  Today's civil servants and TDs will qualify for the contributory State pension and turkeys are not inclined to vote for Christmas!

Remember that post-tax savings can also get clobbered by the government of the day.  For example, DIRT was increased to 41% in the wake of the financial crisis regardless of a depositor's income level.Sarenco, post: 1526567, member: 87373"]That's fair enough Gordon but in my experience an unmerited sense of entitlement is not confined to any particular cohort.  People often underestimate the role of luck in life.



Well you can see the turkeys from post 158 built a parachute to avoid Christmas .You have too ask the question why did they bother changing the D stamp as all seeing the PRSI class A 1 got a pay rise of 5% to make up for the fact that the employee paid around 2% for a  D stamp  PRSI class A1  employees paid around 7% both finished up getting the same pension,
Someone starting on  the 4 of April  paid around  2% prsi class D
Someone starting on the 7   of April paid around  7% prsi class A1 they 7 of April Employee Got  5% more than the person doing the same job so both would have the same pay  would get the same pension when
the retire,
Just for the record public sector workers on a D stamp can work in retirement before the age of 65 and it will not affect there pension, PRSI A1 get the same pension but if the work after retired  before reaching  65 it affects them,


The government sold it as bringing public service workers into line with the private sector ,What i am saying We need to hold them to there word any paye worker who had around 17% of  there payroll sent to the prsi fund PRSI  since 1995 need to be getting a treated the same ,This has nothing to do with public service workers it is all about private sector workers holding the government at account ,My suggeston is prsi Class A1 pension  should be linked to a % of a public servants grade 3 pay,

We can already see from no 1 post that this needs to be done because it is affecting how private sector workers are planning/not planning for there future so this need to be addressed ,

I am all for people paying into a private pension along with there state pension ,I will be retiring next year in fact I planned to retire at 60 but still work and it is a lovely position to be in knowing for the past number of years that i don't need to work if i don't want to, Ireland has a very good system tax wise for both public and private sector workers to plan for there retirement and anything stopping people from doing so must be removed,[/QUOTE]


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## world201812 (18 Aug 2017)

OP here, thank you for all your input on the pensions thing. First chance I’ve had to respond.

Sarenco 

Noted about the state contributory unlikely to be abolished. Point taken re the savings, and DIRT rate, but savings as in the moment sitting in for example a current account are not impacted, so there is always the option to stick cash under the mattress.

Steven

Thanks for echoing Sarenco’s point on it re turkeys and xmas and unlikely to veto it.

Cremeegg

I didn’t realise a DC can’t go bust, but I always thought DC schemes were worth little compared to DB, and if DC returns are not certain, the cash under the mattress option sounds appealing. Certainly, putting in more than the minimum is questionable. Interesting to see the Means Test isn’t an impossibility.

Hopefully, in general, the political fury of the grey brigade would keep the governments paws off the state pension.

One thing I completely didn’t realise was you pay tax and the other levies on pensions, as a public servant relation pointed out.  My naivety!!!

Jjm

As a 30 something your line of Ireland ‘and has a very good system tax wise for both public and private sector workers to plan for there retirement’ is encouraging but in general…

A private sector worker who wants to have some sort of decent pension upon retirement/not at the whim of the markets needs to get herself or himself into a public sector job? Or is that overly simplistic?


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## Gordon Gekko (18 Aug 2017)

Overly simplistic.

Someone in their 30s should embrace market collapses and volatility. The stuff about funds not delivering etc is all rubbish. Make sure you're not being charged too much, make sure you're taking on enough investment risk and embrace volatility.

The additional return you'll generate is compensation for the fund going up and down in value.


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## jjm (18 Aug 2017)

world201812 said:


> OP here, thank you for all your input on the pensions thing. First chance I’ve had to respond.
> 
> Sarenco
> 
> ...



 The public service has the biggest unfunded defined benefit scheme in the world for it size and to make things more complicated the money the pay into it is given back to them in wages pushing up there cost along with everyone else ,It was fine when the government could borrow and they were not asked what they are going to spend it on, If you want to get an idea what Ireland will be like in 25 years time for public servants
take a look as Greece at present many like yourself think that because there contract of employment says and the law of the land back them up at present because the money is there to pay them all is fine,

Do you expect a 75 year old in the private sector to go out to work every day and be taxed to the hilt so you in the public service can retire on the terms which the country can no longer afford ,
Do you really think people are going to take getting up early in the morning and going to work and see there pensions cut because the money is needed to pay higher pensions to a select group,

What I expect will happen is the people who get up early in the morning along with lower paid public servants the type who now vote for FG and FF and would not vote for a left wing party if there life depended on it will become the new left and they will not be led by what goes for left wing  well to do parties in Ireland at present , In fact they will be out to clip there wings ,


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## jjm (18 Aug 2017)

Gordon Gekko said:


> Overly simplistic.
> 
> Someone in their 30s should embrace market collapses and volatility. The stuff about funds not delivering etc is all rubbish. Make sure you're not being charged too much, make sure you're taking on enough investment risk and embrace volatility.
> 
> The additional return you'll generate is compensation for the fund going up and down in value.


 
I agree 100% so the sooner you start the better,back in 1982 that was how is was explained to me the also Quoted the whole of the USA depends on the markets for there pension you are in good company,
you said you were  30 something I don,t know when you plan to retire to get full benefit of the tax free lump sum you may have to be over 20 years in a pension scheme for some reason this is not pointed out on askaboutmoney  often enough,


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## world201812 (18 Aug 2017)

Fascinating stuff folks.

I should as you suggest start ASAP so and max it out to 20% if affordable so. What is being charged too much, I know on PRSA’s I have/looked at (I know these are different to DC pensions) the rates range from 0.4% to 1.0%. What is a fair charge?

I like the fact that with the limited PRSA’s I have I can log in online and see them. Not the mounds of paper that I saw in the post less than 10 years ago with DB pension!

Interesting Jjm on the public service DB scheme. I don’t know, of all the people I know who are retired it’s the state workers who have the best quality of life. I have a relation in his early 70’s still working, he was self-employed but business went bust, so that is happening now, so to a certain extent people are already ‘taking it’, in terms of private sector/self employed pension terms and conditions which aren’t great. I do wonder are we overstating the power of the angry private sector worker thing, the reality is state workers can shut the country down and who could blame them if the government threaten their pensions. Most workers would do so if they had the clout.

20 years service. That is a good point, I need to check out about the 20 years service thing. If people jump jobs every 3-5 years how complicated will it be for them when they hit retirement in terms of figuring out what they have pension wise.

I will read that other thread as was linked in one of the first responses. Certainly, food for thought all of this. I do wonder how the government expect people to take up pension enrolement when there are so few protections out there for people.


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