Where are teachers going ?

Chaps

I can offer you you my take on this.

I left the Post Office in 2004 as a Purchasing Manager controlling a large dept with a massive expenditure. My final job was drafting a letter for a cabinet mininster defending a certain RM decision. It was stressful and I had to know public procurement rules backwards. I probably worked 55 hours a week and my mobile never stopped ringing.

However it was well paid and I now have a good index linked pension which is higher than most peoples salaries.

After leaving the Post Office I became a Procurement Consultant and I worked in the private sector in energy procurement, Formula 1 racing  and PFI.

The pay was even higher, my expense account more lavish but I had to get results, even if it meant working on Christmas day.  I also had to be prepared to close down departments by switching work somewhere else.  It was a totally different kind of job. In the public sector you really have to cover the departments arse and check and recheck that mistakes do not happen. You have to be far more political and I would also say far more intelligent to hold down a job. You had to be aware that one decision made in your dept could affect what happened in other depts, ministries and even other countries.

In the private sector, it is results that count but you have more freedom to achieve what is required.  However if you don't deliver, you get fired, it is as simple as that.

Working in the public sector is a long term job as it can take years to learn how to navigate the rules and hence a good pension is a realistic part of the long term package.

In the private sector, you tend to come and go but you do need to discipline yourself to make your own private pension arrangements as you don't stay long enough in one job..

Therefore public sector pensions tend to be regarded as part of the package whereas in the private sector it seems not to be the responsibility of the employer.

Regards

Mick

Mick

Firstly, good to have you posting again here. I have said before that whilst I dont always agree with you your contributions here are always welcome.

Generally I do agree with your last post though, but I think that culture has changed to a degree. Payment by results or performance pay etc are now far more part of the NHS culture. This has been very much the case for me where we have shifted hugely to outcome based payments making up GP income rather than just volume based or 'payments for process'. It is perhaps less true in hospital practice but still an element that has grown. As for 'perform or be fired', I would agree that is not really the culture, either for medical staff or managers. It definitely ought to be for the latter IMHO!

The Blair reforms (from which the current bill is a significant extension rather than a volte face) could be said to be an attempt to bring the NHS culture closer to that of the private sector. More flexible, more accountable, more cost efficient etc. That is of course a massive over-simplification of all it sets out to do but the principle is true I think.

Bruce

Tom, I absolutely consider that comparisons should be like for like and the comment re a surgeon v a barman is ludicrous.

Comparisons are difficult. But most of the websites that I have been pointed towards from this forum and most of those that I have searched for myself conclude that public sector wages and pensions and holidays etc are better than in the private sector. of course some of the websites might have an agenda eg Unison or the Telegraph.

Individual circumstances are of limited use. I worked for the government in my early days, then the private sector, then more recently the government again and I am about to return to the private sector yet again.

Based on my personal experience, the public sector pay, pensions, terns and conditions are substantially better than the private sector. But one swallow doesn't make a spring.

Cheers

Don

Mike

I'm afraid you are going to have to break your post down into paragraphs.

Cheers

Don

Mike

Unfortunately all your posts appear as a single paragraph. Very unreadable.

Look, I haven't used websites to draw comparisons. I have simply followed links posted by others who claim their link provide evidence that private sector pay (or whatever) is greater than public sector pay. And I have simply pointed out that the link does no such thing. Ok, I did post a number of

Based on the evidence that I have seen over the past few years , public sector workers are as well paid as those in the private sector. However,  the differences are modest in general and there are many abnomilies and areas where comparisons are virtually impossible.

The subject of pensions is different IMHO and in my experience. Most public sector workers have a final salary scheme pension based on 2/3 (assuming 40 years service). Most private sector workers have no such provision, at best some have a defined contribution scheme, but many have nothing. Very few have a final salary scheme.

Any final salary scheme (and CARE schemes) require the employer to keep the funds topped up and in today's economic situation,these topups are substantial. The private sector won't (or can't) pay them. The government can make these substabtial contributions, but only because it can draw on taxation. The vast majority of taxpayers are in the private sector, whether that tax is income tax or VAT or fuel tax or whatever. The private sector is therefore forced to pay for these government pensions.

I would welcome the private sector being forced to provide 2/3 final pensions. I said this earlier. This can only happen if the economy improves together with legislation. I made this point earlier. Nobody seemed to disagree, but nobody had any pragmatic solution.

I consider it grossly unfair that the private sector should be forced to fund public sector final salary scheme pensions. I speak as one who is able to enjoy a mixture. of both and I know which is more attractive to the pensioner.

Cheers

Don

Most PSW certainly don't get 2/3  pensions they 40/80 or 1/2 as it's known. Either that or some one owes me some money.

Has it always been grossly unfair or is it only recently? When the good times were rolling in the private sector public sector employees were pitied; now the boot is on the other foot the tune is changed - to mangle a few metaphors.

 *

Funny how you've changed the subject.

Public sector pensions today are better than private sector pensions. (Howard, it doesn't matter whether its half - as in your case, or 2/3 as in my case, they are better) 

The public sector can only sustain these pension arrangements at present because of government top up funding, paid as a result of taxation, not because of any superior commercially available investments. 

The biggest contributors to taxation are the private sector. 

Seems to me, and quite a few others, that the private sector is subsidising the public sector. 

No need to wind the clock back to the Stone Age, or the Bronze Age, or 10 years ago. or change the subject. 

Just as an illustration, Mrs D (who worked as a teacher in both the private and public sector) was able to turn a £100k public pension pot (a typical combination of government contributions, investment growth I presume and her own contributions), into a £9,600pa pension income (single life, inflation proofed). In my last public sector job I was able to turn £100k of CARE contributions (mine plus the government plus investment growth) into an £8,400pa pension - double life inflation proofed. Both these are recent figures ie this year. I have quoted them in terms of £100k pots to make comparisons simple - obviously the actual pots are different. If I could have obtained these sorts of figures from the private sector pension funds I have, I would (be able to) retire tomorrow. As it is, I am back in the private sector, virtually on a freelance basis without any perks - although I freely admit I enjoy what I do and I know a dozen other out-of-work instructors who would bite my hand off if I offered them my job. Now please point me to single-life/double-life, inflation proof private pensions that can be got at better than these rates and I will be very happy (seriously happy). 

Cheers 

Don

Posted from "word" but appeared as a single paragraph - Mike's disease is obiously infectious.

Tried again with paragraphs restored - see above

Cheers

Don

Oh dear Mike, you really are picking at straws

I have used the term "government" to cover the wide range of public sector employers. Local gov, national gov. gov departments, MOD, armed forces, police, teachers............you get the drift.

The only reason these organisations can continue to offer and pay for final salary schemes (defined benefits) is because they have access to funds raised by all forms of taxation, most of which comes from the private sector. These funds are used to top up the initial contibutions made by the employer and employees. These initial inputs wouldn't cover the defined benefit outgoings.

It used to be the same in some parts of the private sector, but longer life-expectancy, globalisation and the economic downturn has put an end to that. Hence my earlier comments suggesting that until the economy improves, or gov legislation is introduced, the private sector will no longer (be able to) provide defined benefit schemes.

It really isn't difficult to grasp.

I'm still waiting for suggestions as to quicker and better solutions.......

Cheers

Don

HI Big, you should find you get a lump sum on top of that

The 60th scheme (or 2/3) was updated by the 1/80th AND 3/80 lump sum scheme for many PubS workers

Broadly similar benefits given most people would opt to take tax free cash from their scheme anyway

So, someone with say 40 years accrual would get:

40/60 income, from which they could opt to draw part as a tax free lump sum, which would in effect be a quarter value, so pension would probably end up about 30/60 + lump sum i.e.  1/2 +LS

Or now,

40/80 pension income plus 3x40/80 lump sum i.e. 1/2 + L/S

Someone with just 20 years service for example would get half that clearly

Why on earth do you make that sort of presumption ?

Cheers

Don

Many things can be paid for. We rely on the gov to make the right choices when funds are less than demands.

The gov can pay the current SRP and the other benefits you mentioned and can see the widespread  benefits in so doing . Whether they will be able to continue these  payements at current level in future depends on the economy and what other priorities need funding/resource.

My point is that it is manefestly wrong (and unfair) to pay large pensions to c. 4 million public sector workers when these funds, (provided mainly by others) could be put to far better use elsewhere for the benefit of all.

Cheers

Don

Absolute size isn't alway important. Sometimes the widespread effect is disprortionately disaterous.

The Top-up is paid for by others and that is what provides the difference between defined contribution schemes and defined benefit schemes.

Cheers

Don 

What large pensions are these?

A few months ago when you raised this point we agreed, I think, that the average public sector pension was around £6000. All this talk of 1/2 or 2/3 penisons is quite a large and dishonest red herring.