In fairness, tax relief at the marginal rate means that us private sector folk only have to pay for 59% of our pensions whereas the public sector has to pay for 7.5% of its pensions (is that too simplistic?). Then, of course, private sector pensions will give you a pension entitlement at retirement based upon the value of your pension fund (mine is currently down 40.5% - so i’ve effectively had to fund 100% of the pension myself). Surely, in the interests of fairness something has to be done about the guaranteed public sector pensions and how they are funded?
No, it’s both too simplistic and false. I’m in the public sector (surprise, surprise). As a post-95 hire (I wager most now are), in addition to the “pension related levy” of somewhat over 7.5% in my case, I have also always paid something like 6.8% in contributory pension. I also pay PRSI at the A1 rate which includes payment for the state pension. That state pension will be “integrated” (i.e, subtracted) from my occupational pension. I also pay the same income taxes that those in the private sector like to tot up as somehow “paying for” my pension. I’d wager I pay well over 20% of my taxable income toward my pension.
There is no solid evidence that those contributions don’t fully pay for my pension, now that the so-called “pensions levy” is in place.
But you’ll never read about this in the Sunday Independent where they like to see public sector pensions as the gift that keeps on giving (to them).
As for the claim that I’m somehow more of a Vested Interest than anyone else posting on these matters:
This is a political question. The question is: who pays? Those in the private sector who advocate cutting the public sector expenditure (i.e. most of the posters on this site) are just as accurately described as “vested interests” by the same logic by which I am so accused for taking the opposite view. Their financial interest is in not seeing their taxes go up and so they advocate cutting the public sector.
I think many on low wages in the PS contribute more through the pension levy than they receive in pension benefits. But on average public sector pensions would be very expensive to purchase privately.
The fairest way to solve this would be through a complete reform of the pension levy which links the payment to the actual benefits received.
Will you not get tax relief on the 7.5%? Also there’s nothing wrong with looking after your vested interests. If private sector workers believe that they are payinbg too much of their taxes to the public sector they have every right to call a halt.
Heres an idea, if you want a pension then pay for it yourself. Now I know its probably a new idea and may be met with scepticism but once you start to do it then you might appreciate it more and the people who are currently having to fund the majority of your current PS pension will appreciate the fact that a bit of the load has been shifted off their shoulders to use a union term " as a brother worker an all that".