SOS IRELAND - Public Sector Pay Cuts!

There's a bit of mixing up between the first and second round of benchmarking.

The first round of benchmarking which was effectively a free for all did not consider pensions, or pretty much anything else such as job security. This was the round for which the economist Jim O'Leary quit the benchmarking body due presumably due it being a farce and for which they destroyed all the documents explaining the salary increases afterwards. (History will be unkind to this and the people involved)

The second round did consider pensions but even then only in an advantageous way for the public sector, i.e they only compared to private sector workers getting a pension and even then only to the more generous of the private sector schemes.
 
Sunny said:
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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Do you have links to this. I never really read about that. How much was in the pot before the "good years". Has none of the €20 billion come from the public sector employees?
 
Read the report for 2007. Or 3rd quarter 08 update, net assets dropped to 18bn due to state of the markets. The home page of the website tells me that the fund was set up in 2001. Took me all of 2 minutes.
 

Jaysus joejoe, are you Joe Duffy in disguise?
 
I'm thinking it would been easier just to have said that in the first place. anywayz....

So its not 20 billion but 18 billion, also its to pay for both public sector AND social welfare pension. But the fund started with 10 billion. So they saved, 8 billion. I'm not clear how much the fund earned itself vs the "Govt savings". Govt contributions in 2007 were 1.6 billion. The other years, I dunno. Maybe its somewhere else on that website or in the PDF's.
 
Very fair post.
 

€18 billion is the NAV of the fund not the nominal value but its not really the point.

There will nothing left in the pot for social welfare pensions because the bill for public sector pensions is rising at such a pace. While there is an argument over the true cost, it is estimated that the pension fund deficit for public sector workers is €75 billion.

http://www.finfacts.ie/irishfinancenews/article_1013333.shtml

No-one can argue that it is sustainable to continue with this.
 
Then what was all this about then?

Sunny said:
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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It all comes down to the poor financial planning and control by the Govt during the boom years. Its like they never expected the boom would eventually slow or stop. Like I said originally. They never planned for the rainny day. Or winter for that matter.

They are going to have to cut non essential services that where created in the boom years, and implement a pay cut, and change the way the pensions are funded. Also look for better value for money for existing services. I'll expect they make a mess of all that (par for the course at this point) and we can expect a lot of U-turns and industrial action of the next few years.

Of course when you've some of the best paid politicians in the world, (why is that) who won't take decent pay cuts themselves what hope is there. They need to lead by example. So far the example is do as I say not as I do, and look out for number one.
 

You said the Government didn't save anything during the good years. I was simply pointing out that they were saving 1% of GNP each year which is a significant sum. Unfortuantely this saving is more than eaten up by the ballooning public sector pension bill. I agree with all your points.
 
aircobra19 said:
Fair enuff...maybe I should have said didn't save enough...
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It's never enough! To be fair to them, they probably would have been criticised for putting money away instead of spending it on health, education infrasrtucture etc. The problem with it all is they completely forgot about the concept of value for money. They didn't achieve one bit of public sector reform despite throwing billions of euro into it in the form of higher wages. Benchmarking was a scam but to be fair was supposed to lead to changing work practices within the public sector in exchange for pay increases. Seven years later, they are still talking about the inflexibility in the system. Its a joke.
 

Great post. The irish govt made the problem worse by continually extending the section 23 / section 27 tax relief schemes beyond their quoted deadlines during the boom years.
 

It was the Govt failure not to make benchmarking effective. Just like creating the HSE achieved little. What ever way you look at these problems, its one Govt failure after another. I don't think you can be fair to them. If they'd actually spent it on health and education instead of wasting it, as you said failing to achieve value for money, at least there'd be something to show for it, instead of an army of over paid/well heeled crony advisors.
 
D8Lady said:
How much is factored in for the fact (up until now) that they will never lose their jobs?
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Perhaps the fact that public sector pensions (pre 1995 officers) are calculated on the basis of 50% of final salary max. and not 66% of final salary as pertains in a private sector pension, Defined Benefit?

Also, is the private sector pension not index linked? i.e. subject to national salary increases as per partnership?
 
Sunny said:
Only said that was the publicised justification for it! Already said it was a scam!
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You're right there! Actually, the "justification" for it as some sort of productivity bonus was discredited from the start. Remember Sen. Joe O'Toole's boast that it was an "ATM machine" for teachers?
 
Its a pity because on paper it looks useful. I guess all the vested interests never made it a runner.
 
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