The key sentence for me is as follows:
There are understandable and valid reasons why public servants were given more favourable treatment in the past. The generous pensions were an inducement to some of the best and brightest people in the State to stay in the public sector rather than bringing their skills and experience into the private sector where they could have earned more.
The difficulty is lack of flexibility in the Public Sector and "linkages" negotiated by the unions. Rates of reward cannot be increased in any one area (where there is a shortage) without knock on effects right across the board.
I have always believed that the generous PS pension arrangements arose because Trade Union negotiators were able get them past politicians who knew that the costs would not materialise until long after they themselves had left the scene.
There is no cost to any current administration in agreeing a pension benefit which will not become due for many years. An easy sop to the unions.
The critical point here is that pension pots valued at €2 million or more are subject to a “super tax” rate of 70 per cent.
A TD is treated as being well under this threshold but a private sector employee with the same pension entitlements is over the limit and liable to “super tax”.
The "super tax" is an anomaly which no one is meant to incur.
It's an anomaly for sure but not evidence of a wicked conspiracy against the private sector.
Rather than everyone being on DC pensions everyone should be on DB. The market is incapable in today's conditions of delivering that which points to the State underwriting longevity improvements and even investment return and inflation. A society where middle income retirees are required to manage multi million euro pots is so terribly inefficient.
A society where middle income retirees are required to manage multi million euro pots is so terribly inefficient.
cremeeggI have always believed that the generous PS pension arrangements arose because Trade Union negotiators were able get them past politicians who knew that the costs would not materialise until long after they themselves had left the scene.
There is no cost to any current administration in agreeing a pension benefit which will not become due for many years. An easy sop to the unions.
cremeegg
There are more people in unions in the private sector than in the public service actually 5 or 6 100% more in fact
Lots of good well ran DB pensions schemes Buy an annuity for each person who retires so it is very easy to control and see cost,
Would I be correct in saying you did an example of the cost some time in the past year I remember seeing it .I did notice a few bad mistakes that is why i remember seeing it,cremeegg you think the State can guarantee to pay pensions 50 years into future?
DB provides huge societal benefits in terms of generation pooling of longevity and investment risks. There is no point a punter handing the management of these risks to a professional, that's what I mean by inefficient.
The capital required for the risks involved are proving beyond the appetite of the market. The State should get involved in mitigating the extreme risks. For example if folk live far longer than anticipated it is Society's problem.
cremeegg you think the State can guarantee to pay pensions 50 years into future?
DB provides huge societal benefits in terms of generation pooling of longevity and investment risks. There is no point a punter handing the management of these risks to a professional, that's what I mean by inefficient.
The capital required for the risks involved are proving beyond the appetite of the market. The State should get involved in mitigating the extreme risks. For example if folk live far longer than anticipated it is Society's problem.
jjm I don't do mistakes but if you point out one of my 'mistakes' I will show you your mistake.
Oh you mean like the contributory & non contributory State pensions payable to all citizens on attaining the appropriate age ?I am intrigued Duke, I would also welcome the input from those of a left-leaning disposition who often claim that private enterprise are just chasing profits. Would they prefer that all workers have a defined benefit pension from the state coffers, to, you know, make it fairer?
Btw, how's that pinkometer going?
We would all be better off public and private sector if the Government took a % of what they take each week from our wages in prsi and ring fenced into a fund to pay the long term requirements of both groups of workers
Hopefully It will not affect me I will be drawing state pension in less than 2 years I also have a private pension which the company paid 2/3 of the cost this brings my pension well over what i would get for the same wages in the public service I would have contributed around the same % as as a public servant
The problem I see is unless part of the PRSI along with all of the public servants contributions are ring fenced and invested there will be no money to pay then long term .I am in the happy position of being able to look at this having worked in the private sector and seeing my employers contributions sitting in a large pension pot along with my own contributions .
Again the private sector worker needs to have part of there PRSI ring fenced for the same reason , The next generation of Public and private sector worker need to start moving on this now or there will be nothing in the pot when there time comes to retire ,
creemegg the rules for the 'super tax' are the same it's just that no one in Public S gets high enough a pension to incur it.
Hopefully FG won't spend the proposed " Rainy Day Fund "
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