Pension contributions worth 29% of salary for pre 2013 public servants

there are a lot of workers in the public service on low incomes so any tax breaks on there contributions is 20% ,

The thing that has hurt the private sector workers the most is they are not enrolled in a pension once they start work like there public service brothers and sisters,

I would say a total of around 14% contributions by employer/employee for people in the private sector earning around the same wage as a grade 3 public servant 38 to40K would give them the same pension as a grade 3 public servant, once you include state pension,( i suspect it is a lot lower than 14% if I remember correctly the 14% was leaving the state pension out of it)

i think this is where the auto enrollment should have focused on,

BrendanI think you made a submission ,

I remember at the time being very impressed by the people who ran the public submissions,

They thing that is most needed and was/could not be taken into account was linking the two together so as to bring the total pension up around the same for both public and private earning around the same as a grade 3 public servant.

Planning to have funding in place to pay out the private sector /public pension seeing they pay the same amount 14.75 % of payroll into the fund,
It was as high as 18.5 since the put the public service /private sector on the same payroll contributions since 1994/5 they should have the same guaranteed state contributory pension,seeing they pay the same amount in,

It is only when people start looking at it the way I suggest you will be able to compare both and plan to have funding in place ,
 
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Brendan Burgess said:
https://www.independent.ie/business...st-from-tax-reliefs-on-pensions-37874590.html

Private sector workers in DC schemes get an average of 7% employer contribution.
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The average would be skewed if it includes large contributions being made for very few people.
Since people with 0% contribution by employers are excluded from the 7% figure, atypically high contributions should also be excluded. For example one off pay offs to CEOs.

My own guess for a typical employee earning around 50k that an employer contribution would be more likely to be in the 5% range than 7%. (A sizeable difference after 40 years).

https://www.iapf.ie/news/pressreleases/default.aspx?id=6
This from 2015 seems to point to a lower than 7% figure as well:-

A major survey of 6,430 Defined Contribution pension schemes throughout Ireland, undertaken by the IAPF in advance of their annual Defined Contribution Pension Conference on Tuesday, has found that the average total contribution being paid in amounts to just 11.1% of salary – with an average of 5.7% coming from the employer and 5.4% from employees.
 
ashambles said:
The average would be skewed if it includes large contributions being made for very few people.
Since people with 0% contribution by employers are excluded from the 7% figure, atypically high contributions should also be excluded. For example one off pay offs to CEOs.

My own guess for a typical employee earning around 50k that an employer contribution would be more likely to be in the 5% range than 7%. (A sizeable difference after 40 years).

https://www.iapf.ie/news/pressreleases/default.aspx?id=6
This from 2015 seems to point to a lower than 7% figure as well:-

A major survey of 6,430 Defined Contribution pension schemes throughout Ireland, undertaken by the IAPF in advance of their annual Defined Contribution Pension Conference on Tuesday, has found that the average total contribution being paid in amounts to just 11.1% of salary – with an average of 5.7% coming from the employer and 5.4% from employees.
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I know where A fund was put in place back around 1985 capped at the same rate as a public sector telephonist which is around a grade 3 works out as good as a public servant pension including state pension ,If i remember correctly it included back funding people to age 25 who were over this age when scheme started it was set at around 15% ,
 
The cost of pensions paid to retired public servants have gone from €3.3bn in 2016, to €4.3bn next year, according to Department of Public Expenditure and Reform figures.

:eek:Wow! That's scary.
 
Very badly written full of inaccurate info,

for a start most public servants because they are all paying pension contributions would be getting tax relief at 20%, and what is the first thing Charlie writes ,

This means that any move to reduce the tax reliefs will hit Government workers hard,prompting them to seek higher pay, speaks for itself,

Some lobby group is promoting this using the public servants ,I hope people can see through this ,
 
Brendan Burgess said:
https://www.independent.ie/business...st-from-tax-reliefs-on-pensions-37874590.html

Private sector workers in DC schemes get an average of 7% employer contribution.
Click to expand...

Is it not worth even trying to verify the actual source anymore? Otherwise this place may as well be the comments section of the indo website?

Private Sector
Average employer DB: 22% pa
Average employer DC: 7% pa
Average employee DC: 5.4% pa

and 29% (gross of PRD) for pre-2013 public sector employees.
Post 1st January 2013 entrants: average 9% pa.
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Public sector superannuation benefits, less gross superannuation and Pension Related Deduction contributions received. The latest published estimate for 2018 for this net cost is €1.9bn.
The current €1.9bn expenditure on superannuation benefits (net of employee superannuation contributions) will increase by €900m to €2.8bn in real terms by 2020 and by a further €1bn to €3.8bn by 2025.
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Sarenco said:
The cost of pensions paid to retired public servants have gone from €3.3bn in 2016, to €4.3bn next year, according to Department of Public Expenditure and Reform figures.

:eek:Wow! That's scary.
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€1bn! The accrued-to-date liability for State pension schemes at 31 December 2015 was €231 billion. Actuarial review of the Social Insurance
 
Sarenco said:
What does the Social Insurance Fund have to do with pensions paid to retired public servants?
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Glad you asked
Public servants hired before the end of Dec 1994 seen around 1.96% of payroll taken and paid into the social Insurance Fund, there employers paid none, and all pension paid out came from direct taxation,
when they retired,(total paid in by employers/employee social insurance fund 1.96%,

A Public Servant grade 3 public servant after 40 years on 38k would get a pension of 19K from direct taxation before 1995


Public servants hired after the start of 1995 seen around 18.5% payroll taken and paid into the Social Insurance Fund , (seme as a private sector worker and there Employers,


A public servant grade 3 retiring after 40 years on 38K would get a pension of 19K 12.5 K contributory pension same as a private sector worker and 6.5k from direct taxation,after 1995


Note the Government/employer of the public servants hired before 1994 would have taken the public servants % of payroll pension contribution and pocketed/squandered it for the last 40 years,along with having no fund built up over the employees lifetime to meet undertakings given in there contract of Employment,


Note the Government/Employer of the public servant hired after 1995 would have taken the public servants contribution % of payroll pension contributions along with there own contribution of around 10.75% for state pension and squandered it,


The real pension problem for public/private PAYE Workers is the squandering of there/employers contributions over there working life, others getting the same pension and paying in very little some only paying around 500 euro for 10 years can get the same state pension at present,

More than likely it is the people who paid in very little who are behind the artical,

The next time the Troika arrive it will be to sort out the mess The Charlies of this World Ignore,
 
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Itchy said:
Is it not worth even trying to verify the actual source anymore? Otherwise this place may as well be the comments section of the indo website?







€1bn! The accrued-to-date liability for State pension schemes at 31 December 2015 was €231 billion. Actuarial review of the Social Insurance
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It is the accrued-to-date squandered of paye contributions which is the real problem long term,private/public sector,
If you look back at employer/employer pension funds 7% from employer and 7% from employee would more than cover pensions as good as the public service once it is capped/linked to grades ,
 
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RETIRED2017 said:
It is the accrued-to-date squandered of paye contributions which is the real problem long term,private/public sector,
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They are spent on current expenditure such as paying the salaries of State employees and welfare.
What do you propose is cut in order to ring-fence those contributions for investment in future pension liabilities?
 
Purple said:
They are spent on current expenditure such as paying the salaries of State employees and welfare.
What do you propose is cut in order to ring-fence those contributions for investment in future pension liabilities?
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I suspect they would be a lot lower if taxation had to be set aside to fund the accrued-pension expectations of private sector workers pensions,and at the same time meet the employment contracts of public service workers pensions with funding in place,,
Purple in other you cannot have it both it both ways ,I have no problem with living in the real World , Irish people/Midia are not Questioning the need to put aside funds to meet future requirements,
working PAYE people need to stand up and question the people who are squandering the fruits of there work without feeling guilty for doing so,
 
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RETIRED2017 said:
I suspect they would be a lot lower if taxation had to be set aside to fund the accrued-pension expectations of private sector workers pensions,and at the same time meet the employment contracts of public service workers pensions without funding,
Purple in other you cannot have it both it both ways ,I have no problem with that do you,
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I'm not sure what you are saying. If it is that private sector employees should also fund their State pension then yes, I agree. I also think the non-contributory State pension should be much lower than the contributory one.
 
Purple said:
I'm not sure what you are saying. If it is that private sector employees should also fund their State pension then yes, I agree. I also think the non-contributory State pension should be much lower than the contributory one.
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Hi purple I will come back to you this evening ,
Even retired people have to do some work you know,
 
Purple said:
What do you propose is cut in order to ring-fence those contributions for investment in future pension liabilities?
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I think that would be one for Paschal.

Are you in favour of appropriate fiscal policy or not?

The bottom line is, provision should be made for future liabilities as they accrue. This is just as appropriate for the private sector as for the public sector. Currently it is the State's version of the endowment mortgage!
 
Itchy said:
Capital mismanagement on a grand scale?
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But public sector pensions aren't paid out of the (entirely notional) social fund!

The article gives the escalating cost of pensions paid to retired public sector workers. You seem to be disputing those figures by referencing contributions paid by current public sector workers and citing an actuarial report on the social fund. Neither is relevant to the cost of pensions paid to retired public sector workers.
 
Sarenco said:
But public sector pensions aren't paid out of the (entirely notional) social fund!

The article gives the escalating cost of pensions paid to retired public sector workers. You seem to be disputing those figures by referencing contributions paid by current public sector workers and citing an actuarial report on the social fund. Neither is relevant to the cost of pensions paid to retired public sector workers.
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Im sorry if you misunderstood me Sarenco, the 'real money' cost increase of PS pensions (that you expressed amazement at!) has arisen because of the management (or lack of) the PS pension liability to date. I was trying to highlight to you that today's 'real money' cost is the manifestation of the significant pension liability that exists and equate that to the far larger liability (the SIF) that has arisen as a result of the same historical treatment of that state pension liability (which is entirely separate from retired PS workers). I guess the point is, if were accruing a liability we should be reserving for it.

I'm not disputing the figures, they represent what they represent. I am commenting on the deliberate de-contextualising of the figures and, more broadly, the 'pump-and-dump' method of driving discussion rather than the presentation of some form of reasonable analysis (which is why were here and not in the indo comments section ;)).
 
I looked very quickly at the report.

If I understand correctly they took no account of PRD (aka pension levy) paid by public servants since 2009. (If you don't know what I'm talking about stop reading).

This makes a huge difference, especially for high PS earners. A public sector worker on €100,000 pays €7,392 in PRD, and receives €92,608 net of PRD.

An honest public-private comparison would compare a private salary with a public salary net of PRD.


Please correct me if I am wrong.
 
Why would you take account of PRDs when calculating the cost of pensions paid to retired public sector workers?

Why would anybody reference the social fund?

Neither PRDs nor the social fund have anything whatsoever to do with the current cost of pensions paid to public sector workers. Surely that's obvious?

The article suggests that the cost of these pensions to the exchquer will increase by €1billion - or close to 25% - in only four years.

Yes, I find that amazing.
 
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