Public sector pay freeze for top 40,000 public servants announced

[BeanPole]

Unfortunately this is in the UK, where they had substantial public sector reform in the early 80s:
http://news.bbc.co.uk/2/hi/uk_news/politics/8291810.stm

The problem in Ireland now is that our public sector salaries, linked to the ridiculous concept of pay increments, have resulted in a situation where a pay freeze will not be enough to either help the economy, or to introduce some equality between the public and private sectors.

Dramatic action needs to be taken by the government to eliminate overstaffing, archaic demarcation policies, jobs for life, ludicrous pay scales based on time served, ridiculous allowances that are paid even during holidays, and a pension scheme where the private sector end up guaranteeing the retirement of public sector employees. This needs to be done in addition to a minimum 20% across the board cut in salary levels.

All of these changes could be implemented without harming front line services, and would benefit the country in the longer term.

The longer we cowtow to the public sector unions, the more painful the eventual remedy will be.

 

[RMCF]

The big problem is once you give people money its hard to take it back off them.

If only the Gov had the sense over the last decade to control public salaries and increases, and try to control the number of people employed in it.

Unfortunately now its all too late, and a problem that I can't see a solution to.

 

[bogle]

Unfortunately this is in the UK, where they had substantial public sector reform in the early 80s:
http://news.bbc.co.uk/2/hi/uk_news/politics/8291810.stm

The problem in Ireland now is that our public sector salaries, linked to the ridiculous concept of pay increments, have resulted in a situation where a pay freeze will not be enough to either help the economy, or to introduce some equality between the public and private sectors.

Dramatic action needs to be taken by the government to eliminate overstaffing, archaic demarcation policies, jobs for life, ludicrous pay scales based on time served, ridiculous allowances that are paid even during holidays, and a pension scheme where the private sector end up guaranteeing the retirement of public sector employees. This needs to be done in addition to a minimum 20% across the board cut in salary levels.

All of these changes could be implemented without harming front line services, and would benefit the country in the longer term.

The longer we cowtow to the public sector unions, the more painful the eventual remedy will be.

Beanie you're not being accurate in your reporting and commenting.

Some civil and public servants in the Uk will have a pay freeze ...

"He has written to salary review bodies calling on them to freeze the pay of judges, senior NHS managers and GPs."

while others will actually get a pay rise ...

"In addition, about 700,000 middle-ranking public servants, including doctors, dentists and prison officers, will get a rise of between 0 and 1%."


In Ireland all civil and public servants have all ready taken a 7 to 8% pay cut.

This is somewhat different to what the title of your post implies.

A more accurate title would be "700,000 middle-ranking public servants get a 0 to 1% pay rise while 40,000 have a pay freeze"

 

[BeanPole]

Lets revert to the facts, shall we?

All Irish civil servants have not taken a pay cut. They are finally making a notional contribution to their pension costs. This is perhaps ten years late, but hey, it’s a start. It is by no means a pay cut – and despite IMPACTs and SIPTUs whining- if there is any justice, heavy pay cuts are on the way.

Much of the Irish public sector employee contribution will be more than wiped out with the pay increments over time. Pay increments have to be the most unfair and inequitable practice that I’ve ever come across. You are rewarding stagnation, not ability. The complete antithesis of a meritocracy.

Public sector pay and conditions reform, and alignment to the public sector is long overdue. Benchmarking has to work both ways, if it is to be equitable. Irish public sector wages are now overblown and need to be dramatically reduced.

 

[Lex Foutish]

Lets revert to the facts, shall we?

All Irish civil servants have not taken a pay cut. They are finally making a notional contribution to their pension costs. This is perhaps ten years late, but hey, it’s a start. It is by no means a pay cut – and despite IMPACTs and SIPTUs whining- if there is any justice, heavy pay cuts are on the way.

Much of the Irish public sector employee contribution will be more than wiped out with the pay increments over time. Pay increments have to be the most unfair and inequitable practice that I’ve ever come across. You are rewarding stagnation, not ability. The complete antithesis of a meritocracy.

Public sector pay and conditions reform, and alignment to the public sector is long overdue. Benchmarking has to work both ways, if it is to be equitable. Irish public sector wages are now overblown and need to be dramatically reduced.

Revert to the facts???????????

Can you explain what you mean by the underlined above.

How can you expect to post the likes of this here and be taken seriously and not end up looking like an ignoramus? And, with Posting Guidelines in mind, I say that to you with the greatest of respect.

If you're going to have a cut off the Public Service, please do so, like most such posters do here, by knowing the facts and by knowing what you're talking about.

 

[BeanPole]

A contribution to pension costs is not a pay cut.

It is what it says, a contribution towards pension costs.

I would suggest that you, sir, are the ignoramus if you cannot discern between the two simple concepts

 

[Protocol]

Lets revert to the facts, shall we?

All Irish civil servants have not taken a pay cut. They are finally making a notional contribution to their pension costs. This is perhaps ten years late, but hey, it’s a start. It is by no means a pay cut – and despite IMPACTs and SIPTUs whining- if there is any justice, heavy pay cuts are on the way.

The facts are that public sector workers have always made pension contributions.

Not just since the pension levy was introduced.

A typical public sector worker, hired pre 1995, pays 6.5% of salary. You can argue that it's too low, and I agree, but that's a different argument.

Many people and parts of the media seem to suggest that public sector workers get "free" pensions. Incorrect, they contribute 6.5%.

If they were hired post-1995, it's more complex, but they still contribute 6.5% of an adjusted salary basis.

It is true that civil servants, hired pre-95, pay less at 1.5%.

You may see the pension levy as a pay cut or an increased pension contribution. Same effect either way - more revenue for the Govt, lower disp income for public sector workers.

 

[corkgal]

The pension levy is a pay cut in real terms. Having to pay for something that used to be part of your package means that their employer is paying them less.

 

[Purple]

The pension levy is a pay cut in real terms. Having to pay for something that used to be part of your package means that their employer is paying them less.

+1.
To argue otherwise is just semantics.
One thing that many people haven’t taken into account is the fact that the huge increases in the state old age pension over the last few years has reduced the real value of public sector pensions.
I don’t have a problem with public sector pensions now; even with the pension levy it’s still a very good deal but it’s not as good as it used to be.
The problem is over staffing and pay rates that the country can’t afford. Arguments about whether they are fair or unfair etc are irrelevant. The only issue that matters at the moment is that the country can’t afford to spend what it is spending on public sector pay and has to spend a lot less. That’s the only driving force at present. It would be better if there was a more rational and structured reform of public services but due to gross governmental incompetence and the undue influence of vested interest groups over the last ten years there now simply isn’t the time.

 

[Lex Foutish]

The facts are that public sector workers have always made pension contributions.

Not just since the pension levy was introduced.

A typical public sector worker, hired pre 1995, pays 6.5% of salary. You can argue that it's too low, and I agree, but that's a different argument.

Many people and parts of the media seem to suggest that public sector workers get "free" pensions. Incorrect, they contribute 6.5%.

If they were hired post-1995, it's more complex, but they still contribute 6.5% of an adjusted salary basis.

It is true that civil servants, hired pre-95, pay less at 1.5%.

You may see the pension levy as a pay cut or an increased pension contribution. Same effect either way - more revenue for the Govt, lower disp income for public sector workers.

Thanks, Protocol.

I couldn't have put it better myself!

 

[Pique318]

It also means that something which was worth a lot was only contributed towards in a minute amount.
Now it's being contributed towards more, but still not completely, or even closely to what a private pension fund would require to provide the same end product.


Basically, it's a case of "Well we had it sweet for long enough, we can't really complain, can we?"

 

[Protocol]

+1.
One thing that many people haven’t taken into account is the fact that the huge increases in the state old age pension over the last few years has reduced the real value of public sector pensions.

Perhaps, but that is not really relevant for pre-1995 workers who mostly will not get a state pension.

 

[Protocol]

It also means that something which was worth a lot was only contributed towards in a minute amount.

I wouldn't call 6.5% of wages "minute".

Now it's being contributed towards more, but still not completely, or even closely to what a private pension fund would require to provide the same end product.

Yes, the true cost is higher, maybe 20-25-30% of wages.

Yes, public sector workers should pay more for their pensions.

Indeed, we ALL need to save more for our futures.

 

[Caveat]

I don't want to labour the point but don't forget too that the terms/conditions of PS/CS pension are much more attractive than the typical private sector equivalent.

 

[csirl]

I don't want to labour the point but don't forget too that the terms/conditions of PS/CS pension are much more attractive than the typical private sector equivalent.

Having worked in both the private and public sectors (worked for a Gov Dept c. 7-8 years ago), this is not my experience. Private sector pension terms and conditions I've received have always been better in the public sector - usually lower or similar employee contributions and usually aimed at receiving a higher percentage of pay on retirement. Most private sector employers make much higher contributions to the companies pension scheme than the employees.

In my experience, typical private sector employee pays 5-10% of salary and receives 50-75% of final salary EXCLUDING SW pension.

Public sector employee, with pension levy, now contributes 15-20% of salary and receives 50% of final salary INCLUDING SW pension.

Absolutely no comparison - I know which pension I'd rather have.

 

[Pique318]

In my experience, typical private sector employee pays 5-10% of salary and POTENTIALLY receives 50-75% of final salary EXCLUDING SW pension.

Public sector employee, with pension levy, now contributes 15-20% of salary and DEFINITELY receives 50% of final salary INCLUDING SW pension.

Absolutely no comparison - I know which pension I'd rather have.

You left out 2 very important words, I've added them for you out of the goodness of my heart. No thanks needed.

 

[Purple]

In my experience, typical private sector employee pays 5-10% of salary and receives 50-75% of final salary EXCLUDING SW pension.

Can we have the name of the guy who manages that pension fund... pretty please?

 

[Sunny]

In my experience, typical private sector employee pays 5-10% of salary and receives 50-75% of final salary EXCLUDING SW pension.

Where is the research showing this is the typical private sector worker? Especially considering half the workforce don't have any pension in place.

 

[csirl]

Can we have the name of the guy who manages that pension fund... pretty please?

Its not a fund - its occupational pension scheme. I actually had this with a major multinational in the not to distant past - multinational is still here, still operating these terms and conditions for all employees. This is a major company with 1,000s of employees in Ireland.

As I said earlier, the employers contribution exceeds the employees - in this particular case the employers was approx. twice the employees plus the employer also put a % of profits in the pension fund. This is a publically listed company and the terms and conditions were the industry norm - this company was not regarded as having generous terms and conditions.

Occupational pensions that people automatically get through their employment are NOT the same a pensions you purchase from an investment company off your own bat. Most occupational pension have some guarantees in them. And, as we've seen from time to time, if there is a deficit in the occupational pension scheme, the shareholders pay through reduced dividends when the company has to top up the scheme.

 

[peelaaa]

Having worked in both the private and public sectors (worked for a Gov Dept c. 7-8 years ago), this is not my experience. Private sector pension terms and conditions I've received have always been better in the public sector - usually lower or similar employee contributions and usually aimed at receiving a higher percentage of pay on retirement. Most private sector employers make much higher contributions to the companies pension scheme than the employees.

In my experience, typical private sector employee pays 5-10% of salary and receives 50-75% of final salary EXCLUDING SW pension.

Public sector employee, with pension levy, now contributes 15-20% of salary and receives 50% of final salary INCLUDING SW pension.

Absolutely no comparison - I know which pension I'd rather have.

50-75%, its a joke, yeah.