Election the Aftermath

[worzel]

So by Unfunded, you mean the Civil service, thanks for clearing that up. So that excludes the NHS, plice and fire departments, local governemnt and armed forces, who all have contributory pension schemes which they pay for throughout their working lives.

No, I did not. Most public sector pensions are unfunded, or "pay as you go" in the parlance. The payouts are funded by current contributions and taxes (the contributions fall way short). The calculated liability of a scheme is the amount needed to pay all current and deferred pensions, and all accrued benefits to currently contributing members.

The schemes vary quite widely in contribution levels, but how contributory they are is largely academic to their tax payer liability, because those contributions are themselves paid for by taxation, and the contributions are used simply to part pay current pensions (the rest coming directly from tax rather than indirectly).

Of course, from an employees point of view it does make a difference. The difference between the true cost of the benefits you are accruing and the amount you are actually contributing is effectively extra unstated income.

Some of the largest liabilities:
Civil Service: 116 billion
NHS: 200 billion
Local Government: 159 billion (although these have assets of 132 billion)
Armed Forces: 91 billion
Teachers: 169 billion

All of this must be paid for out of tax, whether directly, or indirectly via contributions from public sector pay.

It's not a strange thing to assert at all - what I was arguing against was the perception (mainly in newspapers such as the daily Torygraph) that there is a "Public sector pension." There isn't. As you correctly state, it's exactly the same for most of us as it is in the private sector.

I thought your logic was that because not all public sector pensions are the same there is not such a thing as a public sector pension. My point was that but the same logic there is no such thing as a private sector one either. Maybe what you meant was there was no such thing as a publicly funded public sector pension outside of the civil service: in which case see above.

But what people generally home in on is the civil service pension scheme which is non-contributory and based on a final salary, so costs the taxpayer fortunes - as opposed to the other 90+% of the public sector who fund their own pensions exactly as the private sector do.

This is almost completely wrong in every respect. The civil service is like most public sector pension schemes (depending on metric) in that it is contributory, is final salary and is not funded. Private sector schemes that were similar to the public sector ones have typically been closed and had reduced benefits precisely because these schemes are untenable with modern demographics.

However any 'reforms' from govenment are often applied blanket - so something that merely grazes their pensions often hits the rest of us a lot harder.
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I've worked in the public sector my whole life - and my final pension will be based on my contributions, and nothing else. Because I donate to a pension fund which is index-linked to the stock-market, exactly the same as your pension fund.

Either you have a final salary scheme and are benefiting just like the civil servants from being in a scheme that places a massive burden on future tax payers, or your scheme is actually funded and you will get what your share of the fund can provide at retirement (like private sector pensions). You're trying to claim yours is equitable and yet will be harmed by the government reigning in final salary schemes. You can't have it both ways sunbeam.

 

[kierendinno]

I agree its not about us but I can see it from the patient point of view too. It may have made your life easier in the ED but surely its a case of out of sight out of mind...... You are very lucky if it works in your busy hospital but I work in an equally busy acute hospital and the a+e has a very large geographic area to cover too. And all the medical admission units are is an extension of the a+e where the patients sit, still often on trolleys I might add, for as long as it takes to get a specialised bed. Like Phil mentioned, my hospital also does direct admissions bypassing a+e to some departments but I can't think why being moved from pillar to post would be considered and improvement on staying in one place? Whilst I agree some patients benefit from movement out of the main body of a+e, especially the frailer patients, there are plenty more who are mismanaged in these non-specialty areas instead in the name of target meeting and get lost in all the movement! How much time is wasted by staff running around the hospital trying to find a particular patient or use of extra staff portering and nurse escorts to allow these extra moves? Yes we have a centralised system of locating patients but its only as effective as the person who updates it (or doesn't). Bed managers in our face were bad enough but now we have "patient flow co-ordinators" to contend with, a job that that the first time I heard it I thought was the next generation of continence support nurses, and "site capacity facilitators". Another bunch of middle management jobs created by the Labour Government. Can't wait to see what the Condems change their titles to though......

Maybe your hospital is "better" than mine or maybe you only see the effect the 4hr rule had on your departmental turnaround and don't have to deal with the knock on effect further down the line?

Without wanting to go off topic too much, I'm not sure how not having the 4 hour target will affect us or patients at all. At NUH we have one of the biggest EDs in Europe. We have a 9 bedded Resus (the largest in the country I think), as well as around 26 cubicles for minors/majors, as well as a dedicated area for Nurse Paractitioners (who can see a variety of minor injuries) and a dedicated Children's ED, but on a busy day we can see 450-500 patients a day, and can have up to 100 patients in at any one time. Most shifts now we can be completely full with people on trolleys in the middle (a situation which is far from perfect). I can't imagine the backlog it'd create if we had people in ED for longer than 4 hours. Already we are stretched, and patient flow would, I think, be adversely affected, creating an even worse situation. We're getting more and more people through our doors each day. There has to be adequate systems in place to ensure patients don't suffer, and as long as the 4 hour target is managed and implemented effectively, it works. The only other thing I'd comment on regarding it having a knock-on effect for other wards/departments... Once your ward is full, that's it, you don't get anymore patients... Once all of EDs cubicles are full, can we turn people away? No, we have to accept anyone who walks through our doors, and the 4 hour taget helps to ensure we don't get bogged down with the sheer volume of patients we receive.

 

[worzel]

Looking into it a bit, 94% of public sector workers are in a final salary scheme. The average true equitable cost of these schemes would require contributions at 40%. Average pay in the public sector is actually higher than average pay in the private sector (even without costing in the extra benefit of final salary schemes and job security).

I've got nothing against paying public sector employees fairly. But I'm afraid many public sector workers are labouring under the double misconception that their pension is a little perk to part way make up for what they could have earned in the private sector. The pension is massive and should at least be recognized for what it is. And for the short time I worked in the public sector* I met many such self proclaimed saints of renumerative sacrifice who were basically unemployable outside of academia.

* for which even I accrued a few years service in a final salary scheme for about a 5% contribution level

 

[andywooler]

So that excludes the NHS, plice and fire departments, local governemnt and armed forces, who all have contributory pension schemes which they pay for throughout their working lives.

Whilst all of those people pay contributions, the schemes all have huge deficits and unless I'm mistaken, the members haven't been asked to make up that shortfall. The tax payer is making up that shortfall.

 

[tpcornet12]

Wasn't going to step into this discussion but thought I might add some ideas from Sandamali Zbyszewski writing for politics.co.uk

Average civil service pay is £22,850 a year, compared to £24,970 in the private sector, and 40.5% of civil servants - 210,000 people - are paid £20,000 or less.
Pensions in the civil service are far from generous and have been changed recently to a career average scheme.
The growing gap between public and private sector pensions is the fault of private sector employers retreating from decent pensions. The real divide is between executives in the boardroom securing for themselves large pensions with low retirement ages, and their workforces suffering repeated cuts.
It is counterproductive to degrade pensions because it will force more people into poverty and onto state benefits in their retirement * this is more costly and will have to be met by future taxpayers. This is the real pensions time-bomb.
Excluding the very highest earners, the average civil service pension is £4,200 a year.
More than 100,000 people receive a civil service pension of £2,000 or less a year.
Two and a half times as much public sector money is spent subsidising private sector pensions through tax relief than paying for public sector pensions * 60% of this goes to earners at the higher rate.

Source: http://www.politics.co.uk/opinion-f...er-briefing-public-pension-cuts-$21380123.htm

 

[marc71178]

Two and a half times as much public sector money is spent subsidising private sector pensions through tax relief than paying for public sector pensions

If there's approximately half a million civil servants then you'd expect more money to be spent subsidising private sector than public sector pensions, a lot more than 2 and a hlaf times in fact.

 

[Bayerd]

Wasn't going to step into this discussion but thought I might add some ideas from Sandamali Zbyszewski writing for politics.co.uk

Average civil service pay is £22,850 a year, compared to £24,970 in the private sector, and 40.5% of civil servants - 210,000 people - are paid £20,000 or less.
Pensions in the civil service are far from generous and have been changed recently to a career average scheme.
The growing gap between public and private sector pensions is the fault of private sector employers retreating from decent pensions. The real divide is between executives in the boardroom securing for themselves large pensions with low retirement ages, and their workforces suffering repeated cuts.
It is counterproductive to degrade pensions because it will force more people into poverty and onto state benefits in their retirement * this is more costly and will have to be met by future taxpayers. This is the real pensions time-bomb.
Excluding the very highest earners, the average civil service pension is £4,200 a year.
More than 100,000 people receive a civil service pension of £2,000 or less a year.
Two and a half times as much public sector money is spent subsidising private sector pensions through tax relief than paying for public sector pensions * 60% of this goes to earners at the higher rate.

Source: http://www.politics.co.uk/opinion-f...er-briefing-public-pension-cuts-$21380123.htm

Which I would guess is due to there being more workers in the private sector than the public sector as the contributory public sector schemes attract the same tax relief.

 

[andywooler]

Of course, not all high earners are Private sector.
http://www.guardian.co.uk/news/datablog/2010/may/31/senior-civil-servants-salaries-data

Can we also kill the - "average pensions is x" debate? In a final salary pension scheme, the resulting pension is directly linked to the number of years served and either final salary or somne kind of average. If you have a small defined benefits pension, it's because you a) didn't earn much or b) didn't have enough years service to get the maximum. This is the same for both private and public final salary pensions and is a fact, not an opinion.
The new government are also making a change to the relief available to high earners so have done something about that too.

Personally, I've never heard of Sandamali Zbyszewski and would rather listen to a pensions expert on this topic than a politician where I might hear facts rather than rhetoric.

 

[worzel]

Average civil service pay is £22,850 a year, compared to £24,970 in the private sector, and 40.5% of civil servants - 210,000 people - are paid £20,000 or less.

It would be interesting to see where those figures came from, whether they're medium or mean figures, whether they're counting part time pro rata, etc. and comparing like for like.

According to the ONS average public sector pay is 2k higher than average private sector pay. And that's not including the final salary schemes which most public sector employees have and most private sector employees don't. That equates to a 40% less contributions increase, on average. [ plus the extra so your 40% increase is after tax ]

Pensions in the civil service are far from generous and have been changed recently to a career average scheme.
The growing gap between public and private sector pensions is the fault of private sector employers retreating from decent pensions. The real divide is between executives in the boardroom securing for themselves large pensions with low retirement ages, and their workforces suffering repeated cuts.

That's all very well, but this person is failing to realize that these final salary schemes are simply unaffordable, that's why only the fat cats in the private sector get to keep them. As a nation we can't all expect to retire and carry on living on a decent salary for 10 to 30 years unless we radically decrease our consumption during our working years, which in itself will be very bad for the economy. The reality is we all simply need to work for longer as we're living for longer if we want to maintain our standards of living.

It is counterproductive to degrade pensions because it will force more people into poverty and onto state benefits in their retirement * this is more costly and will have to be met by future taxpayers. This is the real pensions time-bomb.

That's just illogical. The tax payer pays whether its benefits or pension. If someone will be worse off with benefits than with their final salary pension (or average salary pension) then the tax payer will pay less.

Excluding the very highest earners, the average civil service pension is £4,200 a year.

More than 100,000 people receive a civil service pension of £2,000 or less a year.

My public sector pension will be less than that, because I only spent a couple of years in the public sector. There are many like me bringing these averages down.

Two and a half times as much public sector money is spent subsidising private sector pensions through tax relief than paying for public sector pensions * 60% of this goes to earners at the higher rate.

Yeah, that is a good point. I don't see why people should get tax relief on pension contributions anyway. It is supposed to encourage people to save and therefore not be dependant on the state in retirement. But the people it mostly benefits are those who are unlikely to be poor in retirement anyway.

 

[worzel]

PS

My public sector pension will be less than that, because I only spent a couple of years in the public sector. There are many like me bringing these averages down.

Nevertheless, I'll still probably get more out of it than is equitable for the contributions I made.

Yeah, that is a good point. I don't see why people should get tax relief on pension contributions anyway. It is supposed to encourage people to save and therefore not be dependant on the state in retirement. But the people it mostly benefits are those who are unlikely to be poor in retirement anyway.

One crucial difference is that there is no future obligation to the tax payer for tax relief given on private sector pension contributions.

 

[still learnin]

According to this article published by Local Government Chronicle Local Government pensions are still linked to pensions! Did an earlier contributor to this thread intend to mislead?

A report on the Local Government Pension Scheme, (LGPS) published by the Audit Commission on 29 July, warned the scheme ‘can’t continue as it is’, following years of poor investment returns It added that recent reforms alone ‘will not guarantee long-term sustainability’. Suggested remedies include raising employee contributions so that costs to employers – many of whom currently pay into schemes around 20% of staff wages in addition to salaries – and taxpayers is eased, and urging town halls to undertake wage restraint so that pension payments are linked to lower salaries on retirement.

However, amid strong evidence that the final-salary linked LGPS acts as an attractive recruitment tool for local government, the report adds: ‘Employee contributions could be raised, but tapered to discourage members on lower salaries from opting out.’

Other potential cost-saving measures, the watchdog argues, could include increasing the ‘normal retirement age’ and ‘reducing the rate at which benefits are earned’. Eugene Sullivan, Audit Commission chief executive, said: ‘Local government employers already pay more into the LGPS than employee members. And without corrective action the gap will certainly widen.’

 

[worzel]

Local Government pensions are still linked to pensions!

Did an earlier contributor mistype? I can't get anything meaningful out of that at all.

Did an earlier contributor to this thread intend to mislead?

Maybe you could be more explicit with what you think was misleading.

 

[still learnin]

Yeah, sorry I was rushing at work. I should have said that I was under the impresion that somebody on this thread had earlier stated that local government pensions were reliant on the stock market and not linked to "salaries". Part of the article says -

However, amid strong evidence that the final-salary linked LGPS acts as an attractive recruitment tool for local government,

to me that indicates that, unlike private sector pensions, local government pensions are still linked to salaries. Sorry for the confusion!

 

[lynchie]

The government has apparently decided that one way of saving money is to take away the body that makes sure local councils aren't committing massive fraud (see Shirley Porter et. al) with tax payers' money, and replacing it with private firms that will keep shtum so that they get appointed year after year. I'm sure you'll join with the boards of PWC, Ernst & Young, KPMG and Deloitte in thanking the government for funnelling your money into their hands.

 

[andywooler]

The government has apparently decided that one way of saving money is to take away the body that makes sure local councils aren't committing massive fraud (see Shirley Porter et. al) with tax payers' money, and replacing it with private firms that will keep shtum so that they get appointed year after year. I'm sure you'll join with the boards of PWC, Ernst & Young, KPMG and Deloitte in thanking the government for funnelling your money into their hands.

Your opinion is I assume based on fact and experience of working in the private sector?

 

[still learnin]

This following highlights what consultants employed by the Local Government Association discovered (I can't imagine any benefit to the consultant employed in massaging the findings). The comparison might be between local government staff and companies like PWC, Ernst & Young, KPMG and Deloitte as quoted by lynchie above. Bit damning eh? I imagine that there will be a strong defence put up by those who feel misrepresented.

Quote -

Local government staff productivity lags far behind the private sector, indicating the potential for sizable cost savings without the need to axe services, consultants are poised to report.
A study by management consultants Knox D’Arcy based on daily ‘shadowing’ of senior staff within local government and private sector bodies - suggests the level of ‘active’ staff management by senior council officials is low, averaging just 3%.

As a consequence, the consultants claim that over two-thirds (68%) of the working day of junior staff in local government is ‘lost’, often through poor supervision.

Classic examples of ‘lost’ productivity included time staff spent chatting socially, time spent awaiting instructions from managers and time lost to late arrivals at work.

Councils’ 32% effective utilisation rate contrasts with 44% in the private sphere.

The consultants claim increasing local government productivity to private sector levels could allow a typical county council employing 30,000 people to cut their staff by 8,000 and still achieve similar outcomes.

(I'd best finish my lunch and get back to work!)

 

[lynchie]

A bit of a pointless comparison, as it made no effort to compare like-for-like jobs.

 

[geordiecolin]

Quote -

Local government staff productivity lags far behind the private sector, indicating the potential for sizable cost savings without the need to axe services, consultants are poised to report.
A study by management consultants Knox D’Arcy based on daily ‘shadowing’ of senior staff within local government and private sector bodies - suggests the level of ‘active’ staff management by senior council officials is low, averaging just 3%.

As a consequence, the consultants claim that over two-thirds (68%) of the working day of junior staff in local government is ‘lost’, often through poor supervision.

Classic examples of ‘lost’ productivity included time staff spent chatting socially, time spent awaiting instructions from managers and time lost to late arrivals at work.

Councils’ 32% effective utilisation rate contrasts with 44% in the private sphere.

The consultants claim increasing local government productivity to private sector levels could allow a typical county council employing 30,000 people to cut their staff by 8,000 and still achieve similar outcomes.

(I'd best finish my lunch and get back to work!)

Blimey, I wish I could "lose" 2/3 of my day. Not representative at all of my experience of local government.

This sweeping generalisation that all local government workers are workshy, lazy and incompetent really irritates me. I work in an office with professional people who are equally committed and passionate about what they do and work extremely hard, often working in excess of thir contracted hours in order to ensure that the service we provide is efficiently and effectively delivered. I would wager that my office is as busy and motivated as any equivalent in the private sector.

Without doubt, yes there are inefficiencies in local government (I see them everyday!) but to suggest that we all spend 2/3 of our days chatting is way way way off the mark.

 

[geordiecolin]

Also I would be very surprised if any council could cut its workforce by a 1/4 and still achieve the same level of service provision. Thats absolutely crackers.

 

[still learnin]

The report does seem a bit harsh!

I'm also surprised that the consultants believe that only 44% of time spent at work in the private sector is effective. I've worked for some major companies and have never had the impression that 56% of our time is spent in idle gossip or on personal business. These days I spend half my life working with local authorities around the country and my experience is more in line with what geordiecolin says as opposed to the leaked report.

You have to remember that some consultants make their living by confirming what their client already suspects in the form of a very expensive report!!