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30% pay rises for NHS workers.


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2 hours ago, scottbeard said:

+1 agree

Eh?  Not logical.  In a final salary scheme if salaries double FUTURE contributions double, but PAST AND FUTURE liabilities double.  Bad news for the pension scheme.

OK I now see we were discussing unfunded DB pensions.  Nothing changes eh?  Round and round we go.

The current pensions in payment don't double, they stay the same.  The contributions double but the pensions don't.  The effect of a instantaneous doubling of salaries would be very beneficial for the pension's balance of payments at that moment.  Double the money coming in, the same money going out.

As time passes and workers with double salary retire, that effect will be eroded and it will end up in the same position as before eventually.

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20 minutes ago, kzb said:

OK I now see we were discussing unfunded DB pensions.  Nothing changes eh?  Round and round we go.

The current pensions in payment don't double, they stay the same.  The contributions double but the pensions don't.  The effect of a instantaneous doubling of salaries would be very beneficial for the pension's balance of payments at that moment.  Double the money coming in, the same money going out.

As time passes and workers with double salary retire, that effect will be eroded and it will end up in the same position as before eventually.

Public sector DB pensions need to be funded by index linked Gilts.

This would cost at least ~50% of the salary.

To be fair to the employee and tax taxpayer they need to be paid for in the year the benefit accrues.

This would give a good idea of the true cost of public services.

 

 

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3 hours ago, spyguy said:

Public sector DB pensions need to be funded by index linked Gilts.

This would cost at least ~50% of the salary.

To be fair to the employee and tax taxpayer they need to be paid for in the year the benefit accrues.

This would give a good idea of the true cost of public services.

This wasn't what we were discussing.

Anyhow, is there any functional difference between the government issuing gilts and buying those gilts off itself compared to a promise to pay the same amount of pension ?

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11 minutes ago, kzb said:

This wasn't what we were discussing.

Anyhow, is there any functional difference between the government issuing gilts and buying those gilts off itself compared to a promise to pay the same amount of pension ?

Is there any functional difference from using private sector Annuities, which are based on Government gilts, and buying those gilts direct?

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37 minutes ago, kzb said:

This wasn't what we were discussing.

Anyhow, is there any functional difference between the government issuing gilts and buying those gilts off itself compared to a promise to pay the same amount of pension ?

Yes.

AS it stands public sector pensioners are given a promise which is backed by nothing.

Buying Gilts would give a truer cost of public sector jobs.

At the moment, most public sector pensions are being paid for by some magic higher earning future tax payer.,. which so far show no signs of turning up.

When a decision is made whether a service is better performed by UKGIOV or the private sector then pension cost - and the higher sick pay - needs to be factrored in.

 

 

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2 hours ago, msi said:

Is there any functional difference from using private sector Annuities, which are based on Government gilts, and buying those gilts direct?

Don't know but it sure sounds over complicated.

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1 hour ago, spyguy said:

Yes.

AS it stands public sector pensioners are given a promise which is backed by nothing.

Buying Gilts would give a truer cost of public sector jobs.

At the moment, most public sector pensions are being paid for by some magic higher earning future tax payer.,. which so far show no signs of turning up.

When a decision is made whether a service is better performed by UKGIOV or the private sector then pension cost - and the higher sick pay - needs to be factrored in.

 

The "unfunded" public sector pensions are supposed to be financed from contributions from the active workers in the same pension scheme.  Teachers in work pay the pensions of retired teachers.  Not the general taxpayer (although admittedly we have seen that when there is a shortfall the taxpayer has subsidised teachers pensions).

Index-linked gilts are a promise the government will pay you back plus inflation on a certain date.

Index-linked year of service pension entitlement is a promise the government will pay you back plus inflation on a certain date.  What is the difference?

I think what you are getting at is, each year the pension should invest a sum of money that will pay you your pension due for that year.  Yes maybe it should've been like that from the beginning.  Trouble is, the employer would now have to invest that sum, but also carry on paying the pensions-in-payment, i.e. it's about double the public spending until such time as the gilt-funded workers start to retire.  So it would be a difficult thing to do.

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The frightening thing is people are living much longer with many retired public sector workers drawing pensions for 40 yrs plus. The state pension also unfunded so either taxes will go up for next generation or we will borrow more until markets say enough is enough and the pound falls forcing interest rates up and taxes.

I feel sorry for the next generation who will also have global warming to deal with, this week a good indicator of where we are heading not looking forward to the thunderstorms and flooding this weekend.

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2 hours ago, coypondboy said:

The frightening thing is people are living much longer with many retired public sector workers drawing pensions for 40 yrs plus. The state pension also unfunded so either taxes will go up for next generation or we will borrow more until markets say enough is enough and the pound falls forcing interest rates up and taxes.

I feel sorry for the next generation who will also have global warming to deal with, this week a good indicator of where we are heading not looking forward to the thunderstorms and flooding this weekend.

Evidence please. Or have you made this up, like most things you post?

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3 hours ago, kzb said:

The "unfunded" public sector pensions are supposed to be financed from contributions from the active workers in the same pension scheme.  Teachers in work pay the pensions of retired teachers.  Not the general taxpayer (although admittedly we have seen that when there is a shortfall the taxpayer has subsidised teachers pensions).

Index-linked gilts are a promise the government will pay you back plus inflation on a certain date.

Index-linked year of service pension entitlement is a promise the government will pay you back plus inflation on a certain date.  What is the difference?

I think what you are getting at is, each year the pension should invest a sum of money that will pay you your pension due for that year.  Yes maybe it should've been like that from the beginning.  Trouble is, the employer would now have to invest that sum, but also carry on paying the pensions-in-payment, i.e. it's about double the public spending until such time as the gilt-funded workers start to retire.  So it would be a difficult thing to do.

You can have a pay go. But those are not what's promised.

Path would go up n down according to the balance between workers n retirees.

Public sector are index linked and offer spouse 50%

The BoE offers index linked pension. To remove all market risk, to endure tge pension is 100% funded they were putting t0% of salary in index linked bonds. This was back before zirp.

It's easy enough to work out the pension liability - most used to accrue at 1/40th. Life expectancy follows bell curve - 20 years at 65.

Heres the problem - 

file-20171123-18012-5q9bkl.jpg?ixlib=rb-

Life expectancy gas risen by 10 years since 1980.

In 1980 a life expectancy for a bloke was 70 - 5 years pension drawn, plus, say, another 10-15 50% for the spouse.

Doable on a 45-50 year contribution @ 10%.

Today, someone retiring at 65 has another 20 years of life.

Some of the life expectancy figures for public sector workers are a horrendous - for a pension actuary.

Fireman, police esp police women - retirement can last twice as long as working.

 

 

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On 09/04/2018 at 09:54, ccc said:

I would like the option to pay less tax and NI for purely emergency treatment. Then pay my own private insurance for non emergency stuff.

For non emergency stuff the NHS is pretty woeful in my experience.

Totally agree, it is so bad here.  I’ve looked after a relative for 20 years after a bodged surgery, complete nightmare experience.  The older nurses are great though, can find veins easy for tests etc.

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2 hours ago, spyguy said:

Life expectancy gas risen by 10 years since 1980.

In 1980 a life expectancy for a bloke was 70 - 5 years pension drawn, plus, say, another 10-15 50% for the spouse.

Doable on a 45-50 year contribution @ 10%.

Today, someone retiring at 65 has another 20 years of life.

Some of the life expectancy figures for public sector workers are a horrendous - for a pension actuary.

Fireman, police esp police women - retirement can last twice as long as working.

Do bear in mind a lot of the increase in life expectancy is down to lower infant mortality.

LIfe expectancy at age 65 has not increased as dramatically. about 6 years improvement for males and 4 years for females since 1980/82.  Also, the improvement is levelling off quite obviously since 2010.

https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/lifeexpectancies/bulletins/nationallifetablesunitedkingdom/2017to2019

On the 8% Triple Lock thread, we discussed how public sector pension schemes have increased employer contributions very significantly in recent years, for example they are paying 23.6% of salary for teachers pensions.  The employee contribution rates have also been increased as have the standard ages for payment.  They are now CARE schemes as opposed to final salary.

Good point about police ladies though.  Now that police work is mostly about social media, looking for people calling people names, I am sure that could be done by over-55 year olds.

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5 hours ago, kzb said:

Do bear in mind a lot of the increase in life expectancy is down to lower infant mortality.

LIfe expectancy at age 65 has not increased as dramatically. about 6 years improvement for males and 4 years for females since 1980/82.  Also, the improvement is levelling off quite obviously since 2010.

https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/lifeexpectancies/bulletins/nationallifetablesunitedkingdom/2017to2019

On the 8% Triple Lock thread, we discussed how public sector pension schemes have increased employer contributions very significantly in recent years, for example they are paying 23.6% of salary for teachers pensions.  The employee contribution rates have also been increased as have the standard ages for payment.  They are now CARE schemes as opposed to final salary.

Good point about police ladies though.  Now that police work is mostly about social media, looking for people calling people names, I am sure that could be done by over-55 year olds.

Not entirely  true on the drop of child deaths.

The rising slope from ~900s to 1940s is a rapid reduction in deaths of the under 5s (antibiotics, better pre natl care etc) and the end of WWs.

The rise from the mid mid 70s is the massive drop off of blokes doing heavy, manual dangerous work.  And stopping smoking.

There is a connection to life expectancy and wages n NHS n all that.

I found a great chart that showed deaths from infectious diseases.
Despite all the blather from Bevin, deaths fell off as antibiotics were rolled out, just before the NHS creates - and by created, I mean the NHS nationalised the ragbag collection of health providers - charities, nuns, company hospitals parish hospitals etc etc.

After sewage, fresh water, better housing, antibiotics, not smoking etc the effect of the NHS - and all other national health schemes - while not legible, is probably not a major cause in increased health and life expectancy.

One you get beyond the basics/low spend (better child birth), there is also no link between health spending and health outcomes.

 

 

 

 

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3 hours ago, spyguy said:

One you get beyond the basics/low spend (better child birth), there is also no link between health spending and health outcomes.

Yes there is, and it is an inverse correlation !  Largely because of USA being the highest spender with the lowest life expectancy.

As well as that, has anyone but me noticed the virtual closedown of NHS non-Covid work has resulted in the lowest death rates for non-Covid diseases in years?

*Before anyone starts these are "light hearted" observations for entertainment only.)

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16 hours ago, coypondboy said:

The frightening thing is people are living much longer with many retired public sector workers drawing pensions for 40 yrs plus. The state pension also unfunded so either taxes will go up for next generation or we will borrow more until markets say enough is enough and the pound falls forcing interest rates up and taxes.

I feel sorry for the next generation who will also have global warming to deal with, this week a good indicator of where we are heading not looking forward to the thunderstorms and flooding this weekend.

I doubt there are many who make it to 40 years plus.

In 1976 it was like this last week, but it went on for several weeks not just one week.  You had to own a RR or Daimler to have aircon.  True to form it ended in floods.  2018 was roughly the same, but the heat wave was earlier in the year and was over with by the time the school holidays started.

In the USA, the hottest decade was the 1930's, with the dustbowl and farmers abandoning their land.  High temperature records from the 1930's central USA still stand to this day.  I don't think we've seen an eco-catastrophe on that scale since. 

https://en.wikipedia.org/wiki/Dust_Bowl

 

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15 hours ago, kzb said:

Do bear in mind a lot of the increase in life expectancy is down to lower infant mortality.

LIfe expectancy at age 65 has not increased as dramatically. about 6 years improvement for males and 4 years for females since 1980/82.  Also, the improvement is levelling off quite obviously since 2010.

https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/lifeexpectancies/bulletins/nationallifetablesunitedkingdom/2017to2019

On the 8% Triple Lock thread, we discussed how public sector pension schemes have increased employer contributions very significantly in recent years, for example they are paying 23.6% of salary for teachers pensions.  The employee contribution rates have also been increased as have the standard ages for payment.  They are now CARE schemes as opposed to final salary.

Good point about police ladies though.  Now that police work is mostly about social media, looking for people calling people names, I am sure that could be done by over-55 year olds.

https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/lifeexpectancies/bulletins/pastandprojecteddatafromtheperiodandcohortlifetables/1981to2068

Figure 7.

This is the one thats made pension trustees shit their pants.

Now the revises one is show a drop off -and this is pre covid too.

And back to police ladies - and other female public sector workers - ta payers cant afford them = they live too long.

The only way to claw back the pension promises si to make public sector workers retire at state pension age.

Returing off workers due to 'ill health' is nuts - unless they put a 10 year max claim limited in.

 

 

 

 

 

 

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21 hours ago, coypondboy said:

The frightening thing is people are living much longer with many retired public sector workers drawing pensions for 40 yrs plus. The state pension also unfunded so either taxes will go up for next generation or we will borrow more until markets say enough is enough and the pound falls forcing interest rates up and taxes.

I feel sorry for the next generation who will also have global warming to deal with, this week a good indicator of where we are heading not looking forward to the thunderstorms and flooding this weekend.

I have to (constantly) listen to the ;stress' of being teachers.

Yet - if I can dig outthe TPS life epxtacny figures - th TPS figures dotn show that.

Heres the union, trying to spin by using life expectancy for the UK pop as a whole - 

https://www.nasuwt.org.uk/advice/pay-pensions/pensions/england/teachers-pension-age-and-life-expectancy.html

What you need to see if teachers lfie expectancy at 65.

Anecdotally, its somewhere where between 25-30 for female teachers - they just dont drop dead.

*ALL* the 90+ women I know are ex public sector.

 

 

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Maybe because they don't need to worry about their invested pension fund running out of cash if markets crash as they did pre-pandemic.  Can't get an annuity as too expensive so have to rely on the markets, luckily they rebounded but a warning that public sector pensions have no risk but most private sector schemes now stock mariket based so do.

 

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17 hours ago, coypondboy said:

Maybe because they don't need to worry about their invested pension fund running out of cash if markets crash as they did pre-pandemic.  Can't get an annuity as too expensive so have to rely on the markets, luckily they rebounded but a warning that public sector pensions have no risk but most private sector schemes now stock mariket based so do.

 

You lot on here need to make your minds up.   Many on here think they will pay into the state pension or an employer DB pension and get nothing, or very little, back when it comes to their turn.

What you say here, saying public sector pensions have no risk, logically means the state pension has no risk either.  That very much supports the value of increasing the state pension with the triple lock, because you yourselves will benefit from it.

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19 hours ago, spyguy said:

https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/lifeexpectancies/bulletins/pastandprojecteddatafromtheperiodandcohortlifetables/1981to2068

Figure 7.

This is the one thats made pension trustees shit their pants.

Now the revises one is show a drop off -and this is pre covid too.

And back to police ladies - and other female public sector workers - ta payers cant afford them = they live too long.

The only way to claw back the pension promises si to make public sector workers retire at state pension age.

Returing off workers due to 'ill health' is nuts - unless they put a 10 year max claim limited in.

I've not seen anyone "shitting their pants" anywhere, except on here and similar forums.  Certainly it is not reported on TV.  There are no Panorama programmes telling us about the forthcoming public sector pension catastrophe.

It should always be possible to adjust the parameters to make the "unfunded" pensions sustainable.  Adjust the contribution rates, the accrual rate, the earliest claim age as you say, and whatever other factors, as needed.

This lot on here will say it's not fair, the boomers got final salary and you are downgrading our pensions.  But I think that is a moot point, because if you are living longer, that is something.  Maybe they would opt for a shorter life and more monthly pension?  I don't think so.

As things are, public sector pensions are only payable in full from state retirement age.  If they claim their pension before that age, the pension is reduced accordingly, and it ought to be cost-neutral.  As you say though, there is likely a small minority who are claiming full pension from an early age due to ill-health, but have nothing much wrong with them.  I bet this is not as easy to accomplish as you imagine.

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On 22/07/2021 at 18:29, kzb said:

The "unfunded" public sector pensions are supposed to be financed from contributions from the active workers in the same pension scheme.  Teachers in work pay the pensions of retired teachers.  Not the general taxpayer (although admittedly we have seen that when there is a shortfall the taxpayer has subsidised teachers pensions).

Index-linked gilts are a promise the government will pay you back plus inflation on a certain date.

Index-linked year of service pension entitlement is a promise the government will pay you back plus inflation on a certain date.  What is the difference?

I think what you are getting at is, each year the pension should invest a sum of money that will pay you your pension due for that year.  Yes maybe it should've been like that from the beginning.  Trouble is, the employer would now have to invest that sum, but also carry on paying the pensions-in-payment, i.e. it's about double the public spending until such time as the gilt-funded workers start to retire.  So it would be a difficult thing to do.

How do taxpayer funded jobs "pay" for the retirees? It's just moving tax revenue around, all the money to pay for salaries, employer contributions, employee contributions comes from the taxpayer, there is no other source for it to come from.

Edited by Tiger131
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