New job: how to compare public sector salary with private

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Nicetoknow

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Hi. My partner is currently considering a job within the public salary but the salary is lower than his current salary. We are wondering if the public sector pension would make up for the salary decrease. Could anyone advise

Age: 37

Current salary in private sector:
78000 plus 8% company pension contribution. He currently contributions 20% of his salary to pension.

His current pension pot: 70000

Payscale of public sector job:
64000- 79000

Thanks in advance.
 
You shouldn't look at this in isolation.
What are career prospects in both? Where is he more likely to be happy? Is there much of a difference in commute (when that happens again)?
Would he ever have an interest in a career break, when does he want to retire? What impact will drop in salary have on you now?
Money wise it looks like better off in Private Sector, Public Sector pension usually better and more stable but a 15% drop in income is a good chunk to absorb now for jam tomorrow (well 25 years time).
 
In this case it looks like public sector. I'd switch in a flash. Often the salary difference is much higher than this.

Won't need to contribute 20% to a pension, so that'll be down somewhat, not the same pension and not as cheap as it was up to 2009(?) but still better than 20%.

Also the pay cut isn't a straightforward 15%. At top rate plus pension the person is taking home less than 30c of each euro. (51% tax + 20% pension + prsi/usc on pension). If someone drops 15k in salary and is paying 20% pension - that's about 85 euro a week in disposable income. Here that's will be slightly offset by some pension contribution savings.

One thing to watch is health insurance - that will not be paid by the public employer.
 
ashambles said:
In this case it looks like public sector. I'd switch in a flash. Often the salary difference is much higher than this.

Won't need to contribute 20% to a pension, so that'll be down somewhat, not the same pension and not as cheap as it was up to 2009(?) but still better than 20%.

Also the pay cut isn't a straightforward 15%. At top rate plus pension the person is taking home less than 30c of each euro. (51% tax + 20% pension + prsi/usc on pension). If someone drops 15k in salary and is paying 20% pension - that's about 85 euro a week in disposable income. Here that's will be slightly offset by some pension contribution savings.

One thing to watch is health insurance - that will not be paid by the public employer.
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In the public sector, what % equivalent employer pension contribution can we assume he'd be getting. Would 25% be right when comparing his current package with what's on offer?
 
Its probably not best to make an equivalence in terms % contribution as they are quite different. Have you looked at the scheme booklet?
 
It is also worth bearing in mind that new entrants to the public sector pension terms and conditions may not be as good as his current pension arrangements particularly if his current employer is making contributions to it.
 
The new Single PS Scheme is an “career average salary” (revalued) scheme. Members contribute, but the scheme (like all PS schemes ) is an un-funded arrangement. The Government don’t actually contribute to a “fund”. So it is impossible to compare their Single Scheme with a private sector Defined Contribution scheme. However I suspect the “notional contribution “ is well in excess of the 8% mentioned in the original post.
 
Two words: (1) Permanent (2) Pensionable. A public service job on the terms above is a gift in these uncertain times.

I left the public service after 8 years and have been in the private sector for 5 years now. I do miss the public service with its certainty and benefits.

On balance, it has to be the public service.
 
Conan said:
So it is impossible to compare their Single Scheme with a private sector Defined Contribution scheme
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It's not impossible, you just have to make a lot of assumptions and be aware of the uncertainty.

The post-2013 scheme is not so bad for people who come in at a high grade due to the career-average nature of benefits.
 
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Jayom75 said:
Two words: (1) Permanent (2) Pensionable. A public service job on the terms above is a gift in these uncertain times.

I left the public service after 8 years and have been in the private sector for 5 years now. I do miss the public service with its certainty and benefits.

On balance, it has to be the public service.
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Was thinking the exact same. During benchmarking back in the day, I used to always argue with public servant friends that there has to be a price on always having a job. When the recession hit, they moaned about pay cuts while thousands lost their jobs.

And given the size of the public sector, there's always lots of opportunity to move around and get different roles without having to leave.
 
Do not underestimate the difference in work culture between the two. There can be massive differences in terms of management style, decision making speed and capability, access to flexibility. See if you can network with people who have moved or who work in the public service to see if you can gain an understanding.
 
you also need to look beyond the core salary, for example many private companies subsidise healthcare but some public sector bodies provide free travel on public transport (CIE, NTA). Swings and roundabouts as they say
 
NoRegretsCoyote said:
There are extremely few fringe benefits in most of the public service. You will pay for your own Christmas party.
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I've personally never worked for a Private Sector company that paid for a party in the last 15 years.

Big difference is the payrise process, increments/ payscales are almost unheard of in the private sector these days
 
Itchy said:
"Unheard of" is a massive stretch surely?!
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No, it's not. Companies will have paybands that a role fits into but the concept of getting a 3% automatic payrise every year for simply clocking in is gone almost everywhere. There will always be an exception to that rule but off the top of my head I can't think of any.
 
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