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St Article Says Civil Servants Can Retire At 50 To Get Cuts Through

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Looks like another raid on the general taxpayer's in the offing in order to 'quell civil service revolts against plans to axe 610,000 civil servant and council workers' e.g. public sector (PS) workers from the taxpayers payroll. The gov may offer PS workers over 50 full access to their final salary pension from the age of 50, such that a PS worker who's on £60k pa may retire on £40k pa from the age of 50. To qualify they must:

  • waive lump sum payment of 1 months pay per year worked
  • started working in PS before 2006

About 100,000 PS workers may qualify. I'm guessing that a shed load of 'em will be back in the PS as consultants within a couple of years, or will be undercutting private sector workers for work due to the 2 or 3k PM they'll have coming in.

One justification for the largess with taxpayers money is,according to a Cabinet Office spokesperson "This is to recognise the years of service they have given and the financial commitments they have to maintain" (that'll include huge mortgages and school fees I guess) and "The best employers in the public and private sector offer similar packages." (so they don't pick the terms offered to say, Tesco shelf stacker's, they pick those offered to say, bankers, and set the benchmark against them.

Still, it's only somebody else's (borrowed) money. And one assumes that the savings will be limited if they're drawing a full pension for the next 20 to 40 years.

Edit to add clarification

Edited by newbonic

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Reference??

It's on the front page of the Sunday Times, available from a newsagent near you. Although as it's now behind a paywall I can't link directly to it.

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Minimum age for early retirement is 55 now.

Although I've seen plenty of ex-public sector pension schemes members allowed a normal retirement age of 50 (unreduced!) as part of a redundancy package. No kidding. These were generally wound up in the early 90's though.

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Minimum age for early retirement is 55 now.

In the NHS scheme pre-2006 members retain 50 as their minimum retirement age, unless they have chosen to transfer to the 2006 scheme (MRA 55).

Generally, NHS scheme members who joined in 2006 or later have MRA 55.

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makes sense, i suppose, someone probably did an impact assessment and worked out that the cutbacks would make some of God's Chosen Generation [i.e. those currently in their 50s] worse off realised that this would never do. one thing we can all agree on is that generation slave must pick up the bill :huh:

but, well, this is the first i've heard of this, i certainly can't imagine 2/3rds salary being available to most civil servants over the age of 50... that would be a nonsense... a very high proportion of civil servants over about their late 30s are literally only in it because of the pension, if you offered people the chance to get it in full at, say, 51, there'd surely be a stampede, it'd only be the ones who still have very significant mortgage payments still to make [MEW-ers & second homers?] who'd say no?

Edited by the flying pig

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Looks like another raid on the general taxpayer's in the offing in order to 'quell civil service revolts against plans to axe 610,000 civil servant and council workers' e.g. public sector (PS) workers from the taxpayers payroll. The gov may offer PS workers over 50 full access to their final salary pension from the age of 50, such that a PS worker who's on £60k pa may retire on £40k pa from the age of 50. To qualify they must:

I suspect that there's a mis-understanding of the use of "full" here.

I suspect that it means "will receive the pension that they have so far qualified for, but without any deduction for early retirement"

And it doesn't mean:

"will receive the same pension that they would have received if they had made 10 years further contributions".

On this basis no-one retiring at 50 is going to receive a *full* pension becaue it will have been impossible for them to have worked the correct number of qualifying years and thus this scheme will cost nowhere near as much as you first think.

tim

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I suspect that there's a mis-understanding of the use of "full" here.

I suspect that it means "will receive the pension that they have so far qualified for, but without any deduction for early retirement"

And it doesn't mean:

"will receive the same pension that they would have received if they had made 10 years further contributions".

On this basis no-one retiring at 50 is going to receive a *full* pension becaue it will have been impossible for them to have worked the correct number of qualifying years and thus this scheme will cost nowhere near as much as you first think.

tim

I think that's probably right

Not much to go on here and I'm not a mega-expert but AFAIK most civil service pen pushers' pensions work on 60ths - a full [it's full in the sense that if you work more years your pension entitlement doesn't go up] pension is 40 years' worth of service, meaning that someone who works from 21 to 61 retires on a pension equal to 40/60 (i.e. two thirds) of his final salary... this story is probably saying that someone who is 51 can retire now on a pension of 30/60 (i.e. half) of his final salary... presumably this deal might be attractive because someone who stays longer risks seeing the pension becoming significantly less generous... but it's hardly a mega giveaway...

Edited by the flying pig

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I think that's probably right

Not much to go on here and I'm not a mega-expert but AFAIK most civil service pen pushers' pensions work on 60ths - a full [it's full in the sense that if you work more years your pension entitlement doesn't go up] pension is 40 years' worth of service, meaning that someone who works from 21 to 61 retires on a pension equal to 40/60 (i.e. two thirds) of his final salary... this story is probably saying that someone who is 51 can retire now on a pension of 30/60 (i.e. half) of his final salary... presumably this deal might be attractive because someone who stays longer risks seeing the pension becoming significantly less generous... but it's hardly a mega giveaway...

You are correct. I am a civil servant & have been for 8 years. It's a 60th. I have heard that CS who retire early due to sickness can get extra years added towards their pension. We're not talking mega bucks. Put it this way. I had a private sector job & the pension from that job will pay twice as much a year as my CS pension will. I do agree that conditions in the CS are generally easier than the private sector but pensions are nothing to write home about unless you reach the top echelons of the senior civil service.

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I suspect that there's a mis-understanding of the use of "full" here.

I suspect that it means "will receive the pension that they have so far qualified for, but without any deduction for early retirement"

And it doesn't mean:

"will receive the same pension that they would have received if they had made 10 years further contributions".

On this basis no-one retiring at 50 is going to receive a *full* pension becaue it will have been impossible for them to have worked the correct number of qualifying years and thus this scheme will cost nowhere near as much as you first think.

tim

also - CPI inflation adjustment will have a big enough effect over the pension's lifetime of 30 yrs or so

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Don't know about now but this did apply in the past, I have a relative who did exactly this.

a previous public sector pensions thread had someone sayign the following:

public sector pensions on their own, on the given contracts, are not so bad, the main problem is arbitrary early retirements given out, these can be very expensive

I suspect in the current climate, whatever happened in the past, these will not be fully paid up, the public sector unions just do not have the leverage

I have met a few and heard of a few people who retired in their mid 50s on a full public sector pension, and it gobsmacked me

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I think they'll start to tax the lump sum retirement payments.

The [apologies in advance - actual facts & understanding rather than Daily Mail ******** about to be used] £150 per week average public sector pension is hardly the gold-plated affair of popular myth but the fully tax free lump sum [which amounts to, well, i'm not sure, well over a year's gross pay for a lifer?] is a bit of a perk that probably does fairly often get spent on round-the-world cruises, large gifts to offspring ['get them on the ladder'], and so on that is ripe for cutting...

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The [apologies in advance - actual facts & understanding rather than Daily Mail ******** about to be used] £150 per week average public sector pension is hardly the gold-plated affair of popular myth

£7500 per year at current annuity rates tekan at 60 would require something in the region of £150k+ pension fund to pay for it

this is pretty good by most standards

however, you're right in that the bigger deals lie elsewhere

but the fully tax free lump sum [which amounts to, well, i'm not sure, well over a year's gross pay for a lifer?] is a bit of a perk that probably does fairly often get spent on round-the-world cruises, large gifts to offspring ['get them on the ladder'], and so on that is ripe for cutting...

indeed

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I think that's probably right

Not much to go on here and I'm not a mega-expert but AFAIK most civil service pen pushers' pensions work on 60ths - a full [it's full in the sense that if you work more years your pension entitlement doesn't go up] pension is 40 years' worth of service, meaning that someone who works from 21 to 61 retires on a pension equal to 40/60 (i.e. two thirds) of his final salary... this story is probably saying that someone who is 51 can retire now on a pension of 30/60 (i.e. half) of his final salary... presumably this deal might be attractive because someone who stays longer risks seeing the pension becoming significantly less generous... but it's hardly a mega giveaway...

Actually, its probably what a right thinking person would THINK was right.

BUT, think Fred Goodwin...they got shot of him good an proper...oh wait!...they didnt read all the small print properly and got royally shafted..

these w4nkers cant negotiate anything...not forgetting the management side are in effect negotating THEIR OWN emoluments.

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We have some friends in France with a gite business who also earned some money looking after a holiday home for a UK based civil servant. He sent me this last week

"our caretaking job has finished as she has accepted a huge pay out from the Civil Service and an enhanced pension!! Just does not seem right to us but good luck to them"

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£7500 per year at current annuity rates tekan at 60 would require something in the region of £150k+ pension fund to pay for it

this is pretty good by most standards

however, you're right in that the bigger deals lie elsewhere

indeed

A fairly large "+" if you want £7,500 per annum from an index linked pension @ 60.

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A fairly large "+" if you want £7,500 per annum from an index linked pension @ 60.

true, make that 180k+?. don't forget PS pensions are now CPI-linked

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We have some friends in France with a gite business who also earned some money looking after a holiday home for a UK based civil servant. He sent me this last week

"our caretaking job has finished as she has accepted a huge pay out from the Civil Service and an enhanced pension!! Just does not seem right to us but good luck to them"

how old is this civil servant?

Edited by Si1

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I don't know.

I didn't ask because I don't want to know. Once he used the word "enhanced" I thought I'd heard enough.

I had one of those moments few years ago over a pint with a former friend, council officer, son of another council officer, turned out borderline trotskyist

he said 'when my dad retired at 54' - it which point I spluttered up my beer knowing full well he had been PS

i objected to where does the money come from, and he said it came from the value the public services bring to the economy

Edited by Si1

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a PS worker who's on £60k pa may retire on £40k pa from the age of 50.

I really do wonder where these kind of numbers come from. £60k pa is a ridiculous example. To be on that kind of money you would have to be running a whole office or heading up a very important department.

My brother in law is head of the child services department for a London borough. He gets £70k. He's only one or two promotions away from being Chief Exec.

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I really do wonder where these kind of numbers come from. £60k pa is a ridiculous example. To be on that kind of money you would have to be running a whole office or heading up a very important department.

My brother in law is head of the child services department for a London borough. He gets £70k. He's only one or two promotions away from being Chief Exec.

really interestiung point - people I have met in education, NHS and perhaps DWP have been on easy-sounding promotion pathways to high salaries, even 60k tho is high for these, but, say, people in the council much much less evidence of this, and other govt depts like DEFRA AFAIK are again nothing like this

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I really do wonder where these kind of numbers come from. £60k pa is a ridiculous example. To be on that kind of money you would have to be running a whole office or heading up a very important department.

My brother in law is head of the child services department for a London borough. He gets £70k. He's only one or two promotions away from being Chief Exec.

that's kind of true but one has to bear in mind the differences between local government and central government.

e.g. from this site, as a random example, HMRC has seemingly i[if i'm reading it right] 3,483 people at the modestly-high-seniority grade 7 or 6 who are in a payscale of £47k to £74k [all long servers will be well above the bottom of that range], plus, I think, about a tenth as many 'senior civil servants' who will all be on circa £80k or more.

that said, they have hugely more staff in lower pay grades - 64,528 below grade 7 if I'm reading it right. the most that any of them could be on is, I'd say, about £45k [although I'm not an expert]. I don't fully understand but they have 7,774 'admin assistants' [payscale £14k to £19k] and the most common grade [28,000 staff] by a distance seems to be 'assistant officer', payscale £17k to £24k, closely followed by 'officer' [16,000 staff], payscale £23k to £30k

Edited by the flying pig

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I really do wonder where these kind of numbers come from. £60k pa is a ridiculous example. To be on that kind of money you would have to be running a whole office or heading up a very important department.

My brother in law is head of the child services department for a London borough. He gets £70k. He's only one or two promotions away from being Chief Exec.

Because if they used a figure of say £19k pa or so, the answer would be much more realistic & not have the shock value the poster wanted !! lol.

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that's kind of true but one has to bear in mind the differences between local government and central government.

e.g. from this site, as a random example, HMRC has seemingly i[if i'm reading it right] 3,483 people at the modestly-high-seniority grade 7 or 6 who are in a payscale of £47k to £74k [all long servers will be well above the bottom of that range], plus, I think, about a tenth as many 'senior civil servants' who will all be on circa £80k or more.

that said, they have hugely more staff in lower pay grades - 64,528 below grade 7 if I'm reading it right. the most that any of them could be on is, I'd say, about £45k [although I'm not an expert]. I don't fully understand but they have 7,774 'admin assistants' [payscale £14k to £19k] and the most common grade [28,000 staff] by a distance seems to be 'assistant officer', payscale £17k to £24k, closely followed by 'officer' [16,000 staff], payscale £23k to £30k

My wife works at HMRC and the promotion ranks are known as "bands". AFAIK 7 is the lowest band and 1 the highest. My wife is a 4 and her salary scale matches the 'officer' grade in your post. In her department a 3 is a Chartered Surveyor and a band 2 is in charge of the whole office. A band 1 would be someone in a top post at the regional headquarters.

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