How are public service pensions paid?
- Thread starter Shawady
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Re: How are public pension paid?
Public Sector pensions are paid out of general taxation. Unlike the the Private Sector which operate on a funded basis, Public Sector pensions are a charge against overall taxation. The National Pension Reserve Fund is simple a Fund that is (was?) being accumulated as a way of part funding future Public Sector/ Social Welfare pension laibilities. That's why the new Pensions Levy (or in reality a pay cut) is being introduced for Public Servants. We need to reduce our Public Sector pay bill. Whilst private companies can do this by redundancies (as well as pay cuts, pay freeze's etc), the only way to achive savings in the Public Sector is through such a Levy (as Public Servants seemingly cannot be made redundant/sacked under any circumstances?).
Public Sector pensions are paid out of general taxation. Unlike the the Private Sector which operate on a funded basis, Public Sector pensions are a charge against overall taxation. The National Pension Reserve Fund is simple a Fund that is (was?) being accumulated as a way of part funding future Public Sector/ Social Welfare pension laibilities. That's why the new Pensions Levy (or in reality a pay cut) is being introduced for Public Servants. We need to reduce our Public Sector pay bill. Whilst private companies can do this by redundancies (as well as pay cuts, pay freeze's etc), the only way to achive savings in the Public Sector is through such a Levy (as Public Servants seemingly cannot be made redundant/sacked under any circumstances?).
Re: How are public pension paid?
@ Shawady: Conan's pretty much correct, but I make it even briefer -
1. Current.
2. They're not.
@ Conan: It's not correct to say "Public Servants seemingly cannot be made redundant/sacked under any circumstances". Permanent pensionable public servants can be made redundant or sacked, though it's generally a good deal more difficult than it is in other sectors. And as we are seeing at the moment, people on temporary contracts in the public service are - on quite a large scale, and probably particularly in the local authority sector - not having contracts renewed or facing redundancy.
@ Shawady: Conan's pretty much correct, but I make it even briefer -
1. Current.
2. They're not.
@ Conan: It's not correct to say "Public Servants seemingly cannot be made redundant/sacked under any circumstances". Permanent pensionable public servants can be made redundant or sacked, though it's generally a good deal more difficult than it is in other sectors. And as we are seeing at the moment, people on temporary contracts in the public service are - on quite a large scale, and probably particularly in the local authority sector - not having contracts renewed or facing redundancy.
Re: How are public pension paid?
Would it not have been better off for the government to reduce the gross pay by 7.5%? Then all future pensions would be 7.5% less.
Or should the government invest the contributions. I know stock markets are taking a hammering but I assume over a 40 year period, invested money will increase in value.
Basically is the government going about paying pensions in the wrong way?
Would it not have been better off for the government to reduce the gross pay by 7.5%? Then all future pensions would be 7.5% less.
Or should the government invest the contributions. I know stock markets are taking a hammering but I assume over a 40 year period, invested money will increase in value.
Basically is the government going about paying pensions in the wrong way?
L
lemur
Guest
Re: How are public pension paid?
The future public pension pay commitments were unpayable even before this meltdown. Whoever is negotiating these things in govt clearly have no math or accountancy literacy.
The future public pension pay commitments were unpayable even before this meltdown. Whoever is negotiating these things in govt clearly have no math or accountancy literacy.
Re: How are public pension paid?
Conan,
This is not correct. What you meant to say is Public Service Pensions are paid out of general taxation etc...
Several very large Public Sector Employers have funded DB schemes similar to those found in the Private Sector. ESB, Bord Gas, RTE etc.
Incidently I think that a compulsory pension levy should be applied to these pension schemes as well. The funds generated could go to distressed DB funds such as Waterford etc.
Some interesting examples of this type of Public Sector organisation include IFI Irish Fertilisers and Irish Shipping.
aj
Conan,
This is not correct. What you meant to say is Public Service Pensions are paid out of general taxation etc...
Several very large Public Sector Employers have funded DB schemes similar to those found in the Private Sector. ESB, Bord Gas, RTE etc.
Incidently I think that a compulsory pension levy should be applied to these pension schemes as well. The funds generated could go to distressed DB funds such as Waterford etc.
Some interesting examples of this type of Public Sector organisation include IFI Irish Fertilisers and Irish Shipping.
aj
Re: How are public pension paid?
ajapale's quite right, of course.
It would be most accurate to say that most public service pensions are paid on a pay as you go basis from current exchequer funds.
I think there are a few anomalies with the the public service, too - areas which have been absorbed into the public service in more recent years, and a few oddments which predate the State itself. Though perhaps they qualify as "sector" rather than "service" on the basis of their peculiarity... I'd have to research it to be sure.
ajapale's quite right, of course.
It would be most accurate to say that most public service pensions are paid on a pay as you go basis from current exchequer funds.
I think there are a few anomalies with the the public service, too - areas which have been absorbed into the public service in more recent years, and a few oddments which predate the State itself. Though perhaps they qualify as "sector" rather than "service" on the basis of their peculiarity... I'd have to research it to be sure.