SOS IRELAND - Public Sector Pay Cuts!

pension is only one element of the public sector employee costs, what about the other costs, expenses and such like?

Joejoe
 
joejoe said:
pension is only one element of the public sector employee costs, what about the other costs, expenses and such like?

Joejoe
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For example? Can you be more specific?

I wonder what the cost is of all the increased T&S for travel due to the decentralised locations.

Reduce the services, and you'll reduce the wage bill. Thats the way its going.
 
You take a low paid public servant who received 50% of salary of 30k per annum = €15k. The COAP is 12k, so they pay 6.5% of their annual salary for 40 years i.e. 78k in total, in order to get only 3k net in return. They would need to live for 26 years post retirement for the government not to make a profit out of them. As life expectancy in this country is c.78 i.e. 12 years post retirement, the government is in profit out of these contributions.

Csirl,

a low paid public servant on 30k would not pay 6.5% on all salary.

How it works is as follows:

They pay class A PRSI, same as everybody else, and will get a OACP.

Then they pay a contribution towards their occupational pension, as follows:

1.5% of gross for lump-sum = 37.50 pm = 450 pa
5% of adjusted gross = (0.05)(30000-24000) = 25pm = 300pa

So they would pay 750pa towards their occupational pension.

Over 40 yrs they pay 30k.

Why they pay so little is due to the integration.

The benefits

Lump-sum = 45k.
Pension = (0.50)(6000) = 3000pa + 12k OACP = 15k

So they pay PRSI + 30k in pension contributions, and receive 45k + 15k pa.


Overall point: with an integrated pension, both your contribution and your benefit is reduced, due to the OACP
 
Protocol said:
You take a low paid public servant who received 50% of salary of 30k per annum = €15k. The COAP is 12k, so they pay 6.5% of their annual salary for 40 years i.e. 78k in total, in order to get only 3k net in return. They would need to live for 26 years post retirement for the government not to make a profit out of them. As life expectancy in this country is c.78 i.e. 12 years post retirement, the government is in profit out of these contributions.

Csirl,

a low paid public servant on 30k would not pay 6.5% on all salary.

How it works is as follows:

They pay class A PRSI, same as everybody else, and will get a OACP.

Then they pay a contribution towards their occupational pension, as follows:

1.5% of gross for lump-sum = 37.50 pm = 450 pa
5% of adjusted gross = (0.05)(30000-24000) = 25pm = 300pa

So they would pay 750pa towards their occupational pension.

Over 40 yrs they pay 30k.

Why they pay so little is due to the integration.

The benefits

Lump-sum = 45k.
Pension = (0.50)(6000) = 3000pa + 12k OACP = 15k

So they pay PRSI + 30k in pension contributions, and receive 45k + 15k pa.


Overall point: with an integrated pension, both your contribution and your benefit is reduced, due to the OACP
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Not true. Contributions arent reduced due to coordination. I remember this coming up before and asking a neighbour who is a civil servant (who also is an expert in public sector pensions having worked in this area). He showed me his payslip and the full % of the contribution was coming off gross salary.

Possible that contribtutions are reduced in some private sector coordinated pensions, but this is not a feature of the civil service scheme.
 
http://www.cspensions.gov.ie/SuperannuationHandbookandGuidanceDec20061.pdf

See section 10, page 30.


10.​
CONTRIBUTIONS Return to Contents page​


10.1 Officers appointed prior to 6 April 1995 do not pay explicit employee
contributions in respect of their main scheme benefits. Officers appointed on or after
that date pay the following contributions

(a)​
1.5% of gross remuneration (i.e. basic salary plus any pensionable
allowances)

(b) 3.5% of net remuneration (i.e. gross remuneration - as indicated at
(a) above – less twice the annual rate of the maximum Contributory State
Pension (CSP) currently payable by the Department of Social and Family
Affairs to a single person without dependants).

Part-time or worksharing staff pay contributions on a pro-rata basis. For a
member who works on a ½ time basis, the contribution at (b) above would be
calculated as follows:
(Gross notional full-time salary minus 2 x CSP) x 3.5% x 50%

10.2 All officers who are members of the Spouses’ and Children's Pension Scheme
pay contributions in respect of the benefits provided by that Scheme - see Section 16
below.​

 
Post 95 civil and public servants pay as follows:

1.5% of gross for lump sum

1.5% of gross for spouses and children

3.5% of net adjusted gross salary, i.e. salary - 2*OACP.



My sums earlier may not be 100% correct, but I stand by what I said:

Due to integration, you pay in less and receive less.
 
I just did an analysis of my payslip.

I used

1.5% of gross for lump sum
1.5% of gross for spouses and children

3.5% of gross-2*OACP

It worked out spot on, compared to my pension contribution of 268.39.
 
regarding t&s my department is already trying to limit the amount spend on this - by hodling more meetings by video conferencing so that no one needs to travel to them.
 
How much is factored in for the fact (up until now) that they will never lose their jobs?
 
D8Lady said:
How much is factored in for the fact (up until now) that they will never lose their jobs?
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Did you factor this in when you chose to work in the private sector? During the good years when private sector salaries exceeded public sector salaries? Or were you happy to take the benefits that the private sector (at that time) provided? I took the lower paid public service job and never heard a hoot from any friends about my job security back in those days.
 
Hi podge rodge,

Did you leave a higher paid private sector job to take a lower paid public sector job? Or are you just saying that you joined the public sector instead of going for a higher paid job in the private sector? Because I rather suspect that there is a perception of higher average private sector pay which was never actually true across the board, and possibly only true in a relatively restricted number of sectors.
 
Protocol said:
Post 95 civil and public servants pay as follows:

1.5% of gross for lump sum

1.5% of gross for spouses and children

3.5% of net adjusted gross salary, i.e. salary - 2*OACP.



My sums earlier may not be 100% correct, but I stand by what I said:

Due to integration, you pay in less and receive less.
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Ok, maybe neighbour didnt know as much as he claimed.

How would you factor that?
How would you factor the risk of losing your job?
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Didnt the benchmarking report cost this as a % of salary?
 
If thats true, why did benchmarking increase (in general) public sector wages? In theory another round of benchmarking now should reduce wages. Of course you'd have to reduce it like it was increases. A few % over many years. I suspect though, it will be like the reverse of banks being slow to drop mortgage rates but quick to apply increases. Increases in public sector pay were slow, probably most sectors not getting their full amount awarded yet. But they'll likely decrease the wages much faster. That said I think most public sector workers realise thats par for the course, and most, at least those at 50k+ will accept a cut. Those struggling on lesser wages won't be so happy. Benchmarking did factor pensions too. So that was something.

Theres an element of the hare and the tortoise here. People want the pros of being both and the cons of neither.

I never anaThe Govt has squandered the boom, failed to save for a rainy day and its now raining. The real problem is the decreasing tax take. Which is a catch 22 problem.
 
aircobra19 said:
I never anaThe Govt has squandered the boom, failed to save for a rainy day and its now raining. The real problem is the decreasing tax take. Which is a catch 22 problem.
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Well they have saved €20 billion but that has to pay for the ever increasing index linked public sector pension liability!
 
Well its the Govt own pension, so they have a vested interest in doing so.

Where did you get 20 billion figure from?

Why historically does the public sector have a govt funded pension anyway?
 
aircobra19 said:
Where did you get 20 billion figure from?

Why historically does the public sector have a govt funded pension anyway?
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I'm interested where that figure comes from too. Especially since the total public pay bill (for pay and pensions) for 2008 is €18.8bn, or in or about 40% of current public sending, i.e. not including the capital budget.

Who knows why, but my guess is that it's an employers pension, in much the same way as employers used to do in the private sector. The move to defined contribution pensions is a relatively recent phenomenon, and in much the same way as the state indemnifies itself for insurance, the state presumably decided to provide the pension itself rather than give it to a private company.
 
The State has saved €20 billion over the good years and has it sitting in the pension fund. I wasn't saying the State had a €20 billion pension bill per year.
 
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