Some thoughts on the above.
Thanks for your measured response.
Firstly, I really did not mean to start a private v public sector debate. On the contrary, I was trying to make the point that all unfunded State pension liabilities/benefits should form part of this discussion. You are quite correct that it was presumptuous of me to assume that there is a widely held view that public sector pensions are overly generous. This may well be a view that is only held by a narrow minority.
It would important that ALL pension benefits, including tax relief is on the table for any review of pensions. I suspect that some people would like to see a review of 'all pension benefits that apply to other people but not me'. Such reviews aren't a great basis for sound public policy, so if we are going to have a review or strategy, we need to have everything on the table.
Secondly, it is not technically correct to say that relief on contributions to private pensions represents tax forgone - it actually represents a deferral of liability. Tax will be due at the prevailing rate (which we obviously cannot know in advance) on all amounts subsequently drawn down.
This is factually untrue. Tax will NOT be due on all amounts drawn down. The 25% lump sum will avoid tax. The annual tax free allowance will avoid tax on a chunk of the annual income. The lower tax rate will allow for a reduced tax rate on another chunk of the annual income. The investment growth of the tax-free contributions will come into play also. The tax relief is an awful lot more than a deferral, and even if it were just that, the cash flow/timing implications would be a major issue which need to be on the table for any review.
Thirdly, I never suggested or implied that it was OK for anybody to walk away from their contractual commitments.
I was basing this on your comments about "career averaging should be introduced immediately for all such pensions (whether in payment or otherwise). Alternatively, a pro-rata reduction of all such pensions may be more equitable/easier to administer". Your proposals would involve a walking away from existing contractual commitments.
As regards employees accepting lower salaries in exchange for higher pension entitlements, I would simply make the point that repeated studies have shown that, on a like for like basis, public sector workers earn considerably more than their private sector counterparts - and that's without taking pension entitlements into account.
Not really. Most of those studies have shown that average salaries in the public sector are higher than average salaries in the private sector. If I noted that average salaries in Google are higher than average salaries in Greyhound, no-one would be hugely surprised. Most people understand the difference in roles, skill levels, qualifications and experience. But somehow, when the Irish Indo or other DOB-owned media reports another survey that average salaries in public sector are higher than average salaries in the private sector, common sense seems to go out the window.
The ESRI survey that looked at this issue did a fairly crude level of job matching, based on keywords iirc. If you want to do proper job-matching, the kind of job-matching that MNCs do when analysing their own salary levels, that might provide some more interesting results.
The constitutional amendment referred to in my earlier email related to the remuneration of the judiciary.
That amendment referred to future salary levels iirc, and had nothing to do with previously earned pensions.
Finally, I am particularly critical of the current government policy on pensions because (a) there doesn't appear to be one!; (b) they have exacerbated the problem by raiding existing private pensions and by making private provision substantially less attractive; and (c) because the issue is becoming increasingly urgent.
+1 and now they have robbed the funds with the levy.
I (and probably most other public sector employees) allow themselves a little grin at all the talk of raiding and robbing in relation to the very modest levy on private sector pensions (which affects me too btw), when compared against the real pension levy - the fairly savage immediate, direct and ongoing cut to salary of 5%-8%. The real pension levy hit low-earning staff who earn no public sector pension above the standard contributory pension. So really, stop whinging - it's a tax, like many other taxes. It's not nice, but it's necessary.
