Alarmist scribes at work again, makes for great headlines.
Some pretty frightening figures in today's IT -
http://www.irishtimes.com/news/politics/pensions-could-make-millionaires-of-civil-servants-1.2814021
According to the article, the pension paid to the average civil servant who retires at 60 with 40 years of service would cost €1.5 million if bought in the marketplace. The lump sum is extra.
I'm surprised you fell for that one, Sarenco.
It seems harder than it should be find out what annuity rates are in Ireland, but from what I remember something as close as you can get to a public sector pension would cost around 36000 euro for each 1000 in pension received. That would be from 65.That is one hell of a stretch. The average civil servant doesn't get a pension worth €1.5 million. His intention in the article is to skew the figures so that the seemingly excessive pensions of top civil servants are used to tar the whole civil service.
I'm surprised you fell for that one, Sarenco.
1.5m might buy in terms of annuities for a 60 year old - maybe 30-35k euro?
That's probably about right but the example also assumes that the retiree is male and has a spouse that gets half the pension if the retiree dies, that the spouse is three years younger than the retiree, and that the pension increases with inflation, though with a cap of 5 per cent in any one year.
If a young person aspired towards a pension of €24,000 per year, which is just below the average for retired civil servants last year, and wanted to retire aged 65, they would have to start investing €15,750 annually from age 25. That is the equivalent of one third of gross income. If they wanted to retire at 60 and started investing at age 20, the starting contribution would be €17,850.
All of this, by the way, is ignoring the fact that there are more/less lucrative pensions payable depending on whether you started pre or post 1995 or indeed the embargo on recruitment. Both of these will have a considerable impact on the cost of future pensions.
There are more holes in the article than an African American man after a routine police stop.
The article is woefully lacking in facts, the PS pension scheme in this country is in a shambles.
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