Threat to all of our pensions: Ó Cuív says OA Pension cuts cannot be ruled out

[csirl]

If the state pension is cut, the public sector pension will also be cut.

Public sector pensions should be self funding ring fenced defined contribution schemes. However the Government cant afford this as they are using pension contributions from todays public servants to pay current expenditure instead of putting it a pension fund. Also, the public sector pension deficit is nothing to do with todays public sector workers - most pay enough in contributions to pay for their pensions if the contributions were put in ring fenced pension schemes. The problem is that todays public sector pensioners and those due to retire within the near future paid little or nothing towards their pensions and are causing the defict.

 

[Mpsox]

The companies quoted earlier need a dependable elctricity supply. These companies have large datacentres that also need to be in a place with a reasonable ambient temperature otherwise they pay a fortune on air conditioning assuming the electricity doesn't shut down which it does almost weekly in India.


We really do sell ourselves short in this country, we have such a defeatest attitute and inferiority complex at times.

I know this is off topic, but speaking as someone who works for one of these multinationals in India with thousands employed in data centres and call centres out these, if anything, the facilities out there are better then in Ireland and all are backed up by effective UPS and generators (as they would be here). The reason companies go there is that you can get highly qualified and trained staff, often with a better attitude then many of the so called well qualified prima donnas that come out of our colleges for a far lower cost.

 

[csirl]

If you look at the advanced western countries on a map of the world, Ireland is the most centrally located - right in the middle with Europe to the east and USA to the west. We downgrade our mid-Atlantic location too much. Its the best location in the world.

 

[Protocol]

If the state pension is cut, the public sector pension will also be cut.
There is no way they would keep public sector pensions untouched and cut the contributory pension.

I agree with you, but I have seen or read nothing in the papers over the last week to suggest a cut in public service pensions (in line with the public service wage cuts).

All I have heard mentioned is cutting the State pensions (OACP and OANCP)

My point is that so far public sector workers have taken 2 cuts, but public sector pensioners have taken no cuts.

So if we want to reduce the overall pension costs this year, then I suggest to start first with public service pensions.

A retired public servant with 700pw pension, no mortgage, no child costs, etc. can take a 5-10%.

Whereas somebody depending solely of the 240pw State pension is not in such a good financial situation.

 

[MANTO]

Call centre business seemed to be booming last time I was there.

11850 have recently been transferred there - Now can you imagine Jonno ringing up looking for Fuscardi's takeaway in Baldoyle.....

 

[z107]

The companies quoted earlier need a dependable elctricity supply. These companies have large datacentres that also need to be in a place with a reasonable ambient temperature otherwise they pay a fortune on air conditioning assuming the electricity doesn't shut down which it does almost weekly in India.

Well Google and Microsoft, at least haven't really 'relocated' here. They use Ireland as a tax haven and mostly do admin and sales work here. The real development work and interesting stuff is not done here.
Things aren't looking too good for Intel:
[broken link removed]

 

[z104]

If you look at the advanced western countries on a map of the world, Ireland is the most centrally located - right in the middle with Europe to the east and USA to the west. We downgrade our mid-Atlantic location too much. Its the best location in the world.

Very True, I work for one of those companies and I deal with EMEA in the morning and US in the afternoon.

The time Zone is another factor definetly to our benefit.

 

[DerKaiser]

Also, the public sector pension deficit is nothing to do with todays public sector workers - most pay enough in contributions to pay for their pensions if the contributions were put in ring fenced pension schemes. The problem is that todays public sector pensioners and those due to retire within the near future paid little or nothing towards their pensions and are causing the defict.

The current pension deficit is based on past service and contractual benefits accrued as a result. Much of this is owed to public servants with 10, 20, 30 years service who are not nearing retirement as well as to those nearing retirement or already retired.

A few things can be done to make public sector pensions more affordable:

1) A higher employee contribution - already done
2) Curtail Future accruals - offer less generous terms e.g. base final benefits on career average salary rather than final salary
3) Indexing of benefits accrued to date - switch to a system of discretionary increases based on price rather than earnings inflation

The problem is only item 3) affects current pensioners. So if all 3 actions were implemented those nearly or already retired are still doing quite well compared to those lower down the 'pyrimid'.

That's why so many people find it so galling that this group are being spared any pain whatsoever.

This 'pyramid' situation is even worse for insolvent private sector pension schemes where someone approaching retirement can lose all their entitlements whilst the recently retired retain all of theirs

 

[DerKaiser]

Very True, I work for one of those companies and I deal with EMEA in the morning and US in the afternoon.

The time Zone is another factor definetly to our benefit.

The multinationals are quite fickle and you'd be a brave person to take the risk that our educated workforce and favourable timezone would outweigh the attraction of our 12.5% tax rate

 

[becky]

For example, typical teacher/some civil servants/many public servants retiring on 72k, getting a pension of 36k, equals 700pw.

Very common situation.

Maybe to teachers but I don't accept it's typical in the public service.

I ran a quick report here and out of out 2,500 pensioners only 202 retired on salary greater than €70K pa. Even that doesn't say they are on pensions of €35 per annum.

 

[z104]

The multinationals are quite fickle and you'd be a brave person to take the risk that our educated workforce and favourable timezone would outweigh the attraction of our 12.5% tax rate

Our tax is about one third the rate of our competitors..I think we ahve some flexibility.

 

[Protocol]

Maybe to teachers but I don't accept it's typical in the public service.

I ran a quick report here and out of out 2,500 pensioners only 202 retired on salary greater than €70K pa. Even that doesn't say they are on pensions of €35 per annum.

Yes, I accept there are plenty of public servants not retiring on 72k with 40 yrs service.

But there are plenty who do.

Doctors, other health workers, admin in VECs, LAs, teachers, lecturers, guards, etc.

Plenty of them on 700pw pensions, who could afford a pension cut, just like their working colleagues.

 

[Purple]

Our tax is about one third the rate of our competitors..I think we ahve some flexibility.

Poland is at 19% with lower income tax and much lower wages. Many Eastern European countries are around our level, some are lower.

 

[becky]

I agree high earning pensioners can afford a cut, I just don't agree there are lots and lots of them earning €35,000 pa.

The reason they didn't suffer so far was because no pensioner paid the income levy or pensioner levy.

The government held off on the paycut in an attempt to encourage early retirements - it did encourage some but nothing like the numbers they hoped for.

Public service pensioners have now lost the pay relationship with their former grade. Okay it has not been announced offically as far as I'm aware but they have lost it nonetheless and I fully expect they will suffer a reduction come the next paycut.

 

[roker]

What would be the point of taking out a private pension if you were penalised by reductions on your state pension (which you have also paid into), household benefit packages etc.

 

[MandaC]

What would be the point of taking out a private pension if you were penalised by reductions on your state pension (which you have also paid into), household benefit packages etc.

I am with you on this one. I am actually considering not paying anymore in for this reason.

 

[z107]

What would be the point of taking out a private pension if you were penalised by reductions on your state pension (which you have also paid into), household benefit packages etc.

Well it would encourage me to take out a private pension. As I mentioned earlier in this thread, I'm not expecting anything from the state when (if) I retire.

 

[DerKaiser]

Just watching the Frontline.

OAP up from €99 in 1997 to €230 today. Up over 60% even after allowing for rises in the cost of living.

Its under €115 in the UK.

How in the name of God can we continue to support this?

There's nothing special about us compared to the UK. Reductions in taxes and increases in pensions, social welfare and public sector pay were based on fantasy over the last 10 years.

None of these should be immune to correction. The only possible way we can reach a solution without riots does not involve exempting any sector of society from contributing to reducing the budget deficit.

 

[z104]

Just watching the Frontline.

OAP up from €99 in 1997 to €230 today. Up over 60% even after allowing for rises in the cost of living.

Its under €115 in the UK.

How in the name of God can we continue to support this?

There's nothing special about us compared to the UK. Reductions in taxes and increases in pensions, social welfare and public sector pay were based on fantasy over the last 10 years.

None of these should be immune to correction. The only possible way we can reach a solution without riots does not involve exempting any sector of society from contributing to reducing the budget deficit.

Society has broken down in many parts of the UK with elderly people freezing to death becuase they cannot afford to heat their homes. Do you really want to go down this road. Pensioners (i.e you should be looked after when you get old) Means test people. This is the fairest way.


Penioners need to be protected. DerKaiser, Could you live on 230 euro per week. The 60% rise looks like alot becuase it's coming from a low base. You can make percentages look like whatever you want.

 

[Purple]

Penioners need to be protected. DerKaiser, Could you live on 230 euro per week. The 60% rise looks like alot becuase it's coming from a low base. You can make percentages look like whatever you want.

Bit of an exaggeration there Niallers. While it does happen it’s a big country and it gets much colder there than here. The last bout of heavy snow we had was about the same as the north of England gets every year and a few old people froze to death here. Would they have been alright if they had an extra €50 a week in their pension?