The Irish Times doesn't know what Neoliberalism means

[Carnmore]

The State sector has a genuine advantage in providing DB benefits. The private sector (at least the big boys) kidded itself for many years that it could do that until recently. This is simply one of those things like national defence that private sector capitalism can't do well. Many reasons but mostly because they are not prepared to accept the short to medium term risks. They could of course continue to provide DB and charge employees for the risks but that wouldn't wash.
The State can take those risks so it enjoys a key competitive advantage on this. This should lead to actual cost savings to society as a whole at it's combined remuneration of the public sector can be that much less. I am not entering the debate as to whether that is actually happening but the big picture is that providing a DB pension to state employees should be an economic win for society as a whole.
On the separate issue of funding for State pensions, it would IMHO be a silliness to have a €300bn debt alongside a €100bn pension fund and no modern society does that so far as I am aware. The National Pension Reserve Fund was an illusion and turned out to be exactly that.

How could providing a DB pension at largely the exchequers expense be of any benefit to society? It only benefits the recipients.
The only way of benefitting society apropos superannuation is as I outlined.
Does "wouldn't wash" mean it won't happen due to the menace of the PS unions?

A confusing reference to national defence-the Irish Army is at best ceremonial/figurative and de facto defence is provided by the RAF/British Army/NATO.

 

[Duke of Marmalade]

How could providing a DB pension at largely the exchequers expense be of any benefit to society? It only benefits the recipients.

I am speaking of the theoretical position and not bringing any political baggage to this issue. The human condition is that people supply their labour in return for benefits, which benefits may come in the form a wage/salary, a contribution to a pension fund, a DB pension, other BIK or indeed a nice new living room in the case of DIY.
The net benefit to society is the superior economic ability that it has in providing these benefits compared to the private sector. You appear to have been missing from school on the day that basic economics/accountancy was taught. You say that DB pensions only benefit the recipients. In a free society that benefit is matched by the value of the labour that the recipients give in return. You might as well argue that your salary benefits only you.

The only way of benefitting society apropos superannuation is as I outlined.

I hope I have corrected that deficiency in your education.

Does "wouldn't wash" mean it won't happen due to the menace of the PS unions?

I bring no political bias to this situation, try it. The risks are measured as unacceptably high to the employers. If they tried to pass on the cost of these risks to employees they would find no takers, whether unionised or not. So instead of providing DB and passing on the costs of the risks they are facilitating/subsidising DC and passing on the risks.

A confusing reference to national defence-the Irish Army is at best ceremonial/figurative and de facto defence is provided by the RAF/British Army/NATO.

I can see it has confused you, you must have missed more than one day at school. I am saying that in a free capitalist society there are some things which only the State can provide - national defence being a typical such example, social protection being another. DB pensions are rapidly becoming yet another.

 

[Carnmore]

I am speaking of the theoretical position and not bringing any political baggage to this issue. The human condition is that people supply their labour in return for benefits, which benefits may come in the form a wage/salary, a contribution to a pension fund, a DB pension, other BIK or indeed a nice new living room in the case of DIY.
The net benefit to society is the superior economic ability that it has in providing these benefits compared to the private sector. You appear to have been missing from school on the day that basic economics/accountancy was taught. You say that DB pensions only benefit the recipients. In a free society that benefit is matched by the value of the labour that the recipients give in return. You might as well argue that your salary benefits only you.

I hope I have corrected that deficiency in your education.

I bring no political bias to this situation, try it. The risks are measured as unacceptably high to the employers. If they tried to pass on the cost of these risks to employees they would find no takers, whether unionised or not. So instead of providing DB and passing on the costs of the risks they are facilitating/subsidising DC and passing on the risks.

I can see it has confused you, you must have missed more than one day at school. I am saying that in a free capitalist society there are some things which only the State can provide - national defence being a typical such example, social protection being another. DB pensions are rapidly becoming yet another.

Does it make you feel better to be disparaging on an anonymous forum?

You seem to have been missing on much more than a few days in school if you think there'd be a recruitment crisis if the public sector amended their superannuation scheme or reduced their pay rates to a realistic and sustainable level. The public sector was always sought after even when the pay scales for the few-comparable positions to the private sector were significantly lower.

It would take a much more educated person than me to bring you up to speed but I suspect your position is partisan rather than uninformed ie employed in the public sector.

 

[Duke of Marmalade]

It would take a much more educated person than me to bring you up to speed but I suspect your position is partisan rather than uninformed ie employed in the public sector.

Sure, play the man rather than the ball. I am not and never was employed in the public sector. The remuneration package was just not good enough though I would have an ideological desire to provide a public service.
You said that PS DB pensions were a one way ticket, benefits only to the recipients. By that argument so too are their salaries. Remuneration for labour is a two way commercial arrangement, you don't seem to see that.

 

[Carnmore]

You appear to have been missing from school on the day that basic economics/accountancy was taught.

I hope I have corrected that deficiency in your education.

I can see it has confused you, you must have missed more than one day at school.

Sure, play the man rather than the ball.

Projection much?

You said that PS DB pensions were a one way ticket, benefits only to the recipients.

Of course they do or is there some sort of community tithe I'm unaware of, which they pay out of their reduced pay. What would benefit more than the recipient is a Defined Contribution scheme, releasing the taxpayer from stipend servitude.

By that argument so too are their salaries. Remuneration for labour is a two way commercial arrangement, you don't seem to see that.

I don't seem to see that an employee gets paid in exchange for their labour..what gives you that idea?

 

[Duke of Marmalade]

I don't seem to see that an employee gets paid in exchange for their labour..what gives you that idea?

You said the only beneficiaries of PS pensions are the recipients implying that it is throwing taxpayers money away for no return. Do you say the same for their salaries?

 

[RetirementPlan]

Of course they do or is there some sort of community tithe I'm unaware of, which they pay out of their reduced pay. What would benefit more than the recipient is a Defined Contribution scheme, releasing the taxpayer from stipend servitude.

You'll also be releasing the taxpayer from their chances of getting decent staff, but leaving that aside, the problem with this proposal, is that for a generation or two, the country will be paying the DB pensions of older and retired staff PLUS the DC contributions of newer staff - so doubling up on pension spend for 30-50 years. Try spinning that one to the 10 Ministers of Finance who will be in charge over that period.

 

[Purple]

You'll also be releasing the taxpayer from their chances of getting decent staff, but leaving that aside, the problem with this proposal, is that for a generation or two, the country will be paying the DB pensions of older and retired staff PLUS the DC contributions of newer staff - so doubling up on pension spend for 30-50 years. Try spinning that one to the 10 Ministers of Finance who will be in charge over that period.

Yep, there's no easy fix. The gradual increase in the retirement age for all employees, both public and private, is the best fix, along with the current revised DB scheme for newer entrants to the State sector.

 

[Carnmore]

You'll also be releasing the taxpayer from their chances of getting decent staff,

Nonsense, already addressed that in my previous post

but leaving that aside, the problem with this proposal, is that for a generation or two, the country will be paying the DB pensions of older and retired staff PLUS the DC contributions of newer staff - so doubling up on pension spend for 30-50 years. T

That doesn't make sense-the current DB superannuation/reduced pay scheme (it's not a pension scheme) has to be funded (or "doubled up") in perpetuity. The cost of a DC pension scheme is by definition a defined contribution cost, met by the state employee perhaps with a small proportion paid by the state, in to a pension pot, the ultimate value of which depends on the vagaries of the free market economy, the same free market economy which generates the revenue to pay public sector wages.
Why should there be a section of the workforce cosseted in a virtual socialist utopian bubble, largely financed by those subject to the vagaries of the free market economy themselves.

 

[RetirementPlan]

Nonsense, already addressed that in my previous post

That doesn't make sense-the current DB superannuation/reduced pay scheme (it's not a pension scheme) has to be funded (or "doubled up") in perpetuity. The cost of a DC pension scheme is by definition a defined contribution cost, met by the state employee perhaps with a small proportion paid by the state, in to a pension pot, the ultimate value of which depends on the vagaries of the free market economy, the same free market economy which generates the revenue to pay public sector wages.
Why should there be a section of the workforce cosseted in a virtual socialist utopian bubble, largely financed by those subject to the vagaries of the free market economy themselves.

If you think that pension benefits isn't a major factor in people choosing to join public services, than I can only assume that you haven't spoken to many public servants on the matter.

Thanks for the broader explanation of your proposal. It seems that it's not so much about replacing the DB with DC scheme as it is cutting out the pension scheme of public servants, and letting them fund their own. It may have escaped your notice that most professional staff get some degree of employer funding of their pension. I've no idea how you expect the public service to compete for engineers, architects, data analysts, IT designers, accountants, HR professionals with such a poor package available.

 

[Purple]

If you think that pension benefits isn't a major factor in people choosing to join public services, than I can only assume that you haven't spoken to many public servants on the matter.

Yes, in a way the DB scheme is deferred payment. If it was a DC scheme the pay now would have to be higher.

It may have escaped your notice that most professional staff get some degree of employer funding of their pension.

Most employees in the State Sector are not Professionals.

I've no idea how you expect the public service to compete for engineers, architects, data analysts, IT designers, accountants, HR professionals with such a poor package available.

They make up a small proportion of State employees. Most engineers, HR people, accountants, data analysts and IT designers in the public and private sectors are not professionals. Being a member of aa Body that it meant to regulate your "professional" conduct shouldn't have any bearing on what you get paid and, as we've seen far too often, so-called professionals are as human as the rest of us. Self regulation doesn't really work and the whole notion of a Profession is an anachronistic throwback and jarring in a Republic.

If the Public Service can't fund suitable people for specific roles they should pay them more. The idea of fixed pay grades based on qualification or job description is stupid. People should be paid what they are worth for the job they do, not the qualification they have. That's a big problem in the State sector too.

 

[Carnmore]

If you think that pension benefits isn't a major factor in people choosing to join public services, than I can only assume that you haven't spoken to many public servants on the matter.

Of course it is and always was but it's a financial black hole which will eventually implode

Thanks for the broader explanation of your proposal. It seems that it's not so much about replacing the DB with DC scheme as it is cutting out the pension scheme of public servants, and letting them fund their own.

You mean like SMEs and the self-employed, the bedrock of the Irish economy? Anyway, did you not see "perhaps with a small proportion paid by the state"?

It may have escaped your notice that most professional staff get some degree of employer funding of their pension.

I kinda know that but the keyword there is "employer" rather than taxpayer

I've no idea how you expect the public service to compete for engineers, architects, data analysts, IT designers, accountants, HR professionals with such a poor package available.

Historically, people were prepared to trade a significant proportion of their income for the protection afforded by the public sector.

Then the benchmarking debacle brought public sector wages above private sector levels *and* calculated their superannuation based upon these increased wage levels, with no proviso making the ongoing payment of these increases dependent on fiscal affordability.

Then in 2008 when exchequer-receipts fell off a cliff, there was a cosseted section of society still on their benchmark-level wages albeit with some minor cosmetic tinkering such as the introduction of PRD, all funded by borrowings added to the national debt. All happening while many in the private sector experienced financial ruin.

In recent years all the time-served incremental increases have been reinstated and back-paid.

I wish all this was satire rather than state insanity 101.

 

[Duke of Marmalade]

Nonsense, already addressed that in my previous post

That doesn't make sense-the current DB superannuation/reduced pay scheme (it's not a pension scheme) has to be funded (or "doubled up") in perpetuity.

There we go again - the state pensions should be funded unlike the situation in any other state that has a national debt.

As of 31st December 2015, the value of the State’s pension liability accrued in respect of current and former public service employees was estimated to be €114.5 billion.

How should this have been funded?
(a) By borrowing to setup the fund increasing the National Debt by say 50%?
(b) By having cut public expenditure in the past to fund for pensions. In which case the infrastructure both physical and human (e.g. education) would be seriously less than we have today and thus supporting a much lesser economy.
(c) Have been funded by DC pension arrangements with public servants. This would be even worse than (a) or (b) for our economy as it would need to be either of those plus maybe half of that €114.5bn would be invested in foreign equities.

The fact is that the public pensions are implicitly funded by the above mentioned infrastructure which gives the State earning power in terms of its taxation capability. At €65m per annum this infrastructure funding is worth about 20 times the actuarial estimate of accrued public pension liabilities.

 

[Purple]

Actuarial report said:
As of 31st December 2015, the value of the State’s pension liability accrued in respect of current and former public service employees was estimated to be €114.5 billion.

That's an important number.
While State employees and their representatives should be clear that their pensions are attractive and that they come nowhere near funding them with their contributions it should also be made clear that the State Pension, contributory and non-contributory are not funded by the vast majority of people working in the private sector and the theoretical liability for that is in the tens of billions too.
Basically don't give out about Public Sector pensions not being funded unless you are willing to fund your own state pension.
(Note: I pay more than enough PRSI to fund my State pension).

 

[Duke of Marmalade]

Warning! This is a very neoliberal post, even beneath Leo.
But if you can get away with claiming pension for both your dead parents for 30 years and only get caught when you go a bit OTT and claim the centenary bonus or actually bring a corpse with you to the PO; how much welfare fraud is getting away with it?

 

[Purple]

You're not allowed to ask questions like that @Duke of Marmalade . The reason people do that it because they are poor and oppressed by the rich.

 

[Duke of Marmalade]

You're not allowed to ask questions like that @Duke of Marmalade . The reason people do that it because they are poor and oppressed by the rich.

This guy had a gambling problem so I blame PaddyPower and he sure is rich.

 

[Firefly]

So this gentleman gets 3 1/2 years for stealing 500k from the rest of us. As I presume with good behaviour he'll be out in 3 years, I ask you...would you go inside for 3 years for half a mil?

 

[Purple]

So this gentleman gets 3 1/2 years for stealing 500k from the rest of us. As I presume with good behaviour he'll be out in 3 years, I ask you...would you go inside for 3 years for half a mil?

If you broke into a Bank and stole that you'd get 10 years plus.

 

[Firefly]

If you broke into a Bank and stole that you'd get 10 years plus.

Exactly, not much of a deterrent is it?