Current contributions exceeding current benefits is not an indicator of long-term strength or sustainability of a DB scheme.
CityCyclingEdinburgh Forum » Debate!
Do we need a UCU strike thread?
(103 posts)-
Posted 4 years ago #
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"Is the welfare state a pyramid scheme? The current workers pay for the retired in a social contract, not a scam."
It is if the current workers don't have an expectation of similar levels of benefit when it comes their turn. Reduction of which has already happened several times and will continue to happen, whatever government is in charge.
Posted 4 years ago # -
People were conned into believing they could pay 6% of their salary into a pot for 40 years, then get 50% of their *final* salary back for the next 30 years
I'm a deferred member of the USS. Nobody conned me - I was delighted to join.
If you think a more advantageous arrangement is available to you you're free to contribute to that instead but I can't imagine what it would be.
And the retirement age is 65. The probability of me living to 95 is not very high.
Posted 4 years ago # -
Current contributions exceeding current benefits is not an indicator of long-term strength or sustainability of a DB scheme.
I was conceding that the USS isn't exclusively reliant on workers paying for retirees, it has significant investments too.
As to the measure of it's health, that is a key point of contention - there is not agreement with the published assessments, their methodology or assumptions.
Robert
Posted 4 years ago # -
"And the retirement age is 65"
It will be 67 when I've completed my 50 years service, and I'm not going to get the benefit I was promissed when I joined the scheme.
That said you're right we are much better off than many. One thing that suprised me when I was lucky enough to shift onto and academic related grade, was just how much better the pension arrangements are in USS when compared to the scheme arround 30% of staff are eligable to join. I didn't think twice about moving scheme.
(and it's always bothered me that arround 30% of staff have worse contractual, and pension arrangements than me, though some work has been done to allign contractual agreements )
Posted 4 years ago # -
@Roibeard:
Yes, I have a professional interest and followed the dispute for a while but haven’t seen much of recent developments.
Posted 4 years ago # -
If you think a more advantageous arrangement is available to you
The MRC DB scheme is far better than the USS scheme. they pay 6.5% rather than the 11.4% we're due to be moved on to and get 1/60th of each contributing year's salary on retirement, rather than 1/75th. (no 4/75th retirement bonus though)
The benefit of a DB scheme is the supposed absence of risk, but my calculations suggest that if the current combined contributions were put into a DC scheme the pension would be much better.
If there were consistent 3% returns post-inflation (a reasonable assumption). The resulting pension would be much better: after 30 years you'd end up with a 23% higher annual pension living off your 3%, with a giant pile of cash you could choose to burn instead of that/ responsibly skim off.
I suspect the university would (in theory) be happy to let you take the risk on that and get off their books, but UCU wouldn't.
USS also don't let you "cash out" into a different fund whilst you're still making contributions. And the cash out value has no direct link to the combined contributions.
So options: leave academia and hope the estimated cash out value is generous, or get a job directly employed by the MRC
Posted 4 years ago # -
my calculations suggest that if the current combined contributions were put into a DC scheme the pension would be much better
How would you take income from this notional money purchase scheme? Drawdown or annuity?
Posted 4 years ago # -
Hypothetically drawdown, just taking off the expected inflation adjusted interest for theoretically infinite retirement. (could also retire before the pension age then)
but you could also get a lower risk RPI/3% growth adjusted annuity at the same 65-70 retirement age as USS very easily too https://www.hl.co.uk/retirement/annuities/best-buy-rates
(/ do both)
Posted 4 years ago # -
In a previous existence I was involved in designing DC scheme outcome simulators. With a decent economic scenario generator (ie internally consistent simulator of future inflation, investment returns and bond yields far into the future), the range of possible outcomes for individuals' DC schemes even with eminently sensible portfolio allocations is massive (ie much larger than imagined probability of both the good(ish) outcome of hitting the government's Lifetime Allowance, and the 'receiving a pittance' outcome). How does one value/factor in the risk versus the contribution negotiation risk of a DB scheme, given the choice? I'd argue most people can't, probably, even experts in the field.
Posted 4 years ago # -
@MB: +1
Posted 4 years ago # -
@Murun Buchstansangur
I have also produced, adapted and tested a variety of pension calculators professionally. I've never yet come across one I'd take a blind bit of notice of.
Especially now that I've hit the age where my cohort has started dying.
Posted 4 years ago # -
The comparison with the MRC scheme is a bit irrelevant really, given that membership of the scheme is now incredibly restricted:
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With effect from 1 April 2018, only staff recruited to the following MRC institutes are eligible to join:
Cambridge (LMB)
London (LMS)
Oxford (Harwell)
Staff recruited to work at these supporting units
New NC3Rs---
Posted 4 years ago # -
@crowriver fair enough, I wrongly assumed it would apply to some of the stuff going on at little France.
The only non-subjective way to judge the value of the scheme would surely be to compare the value of it to an annuity at the point of retirement based on contributions. At that point it's better, 1/75*(1/0.356)=3.75% plus the 15% bonus, vs just a 3% annuity.
But the further away from retirement you are, the worse it becomes as you can't earn any interest on top of inflation on top of it. But there's obviously risk on top of that which is unquantifiable.
Posted 4 years ago # -
Presume some folk (a very few) at Little France might be part of MRC scheme. However more likely many will have the option to join the NHS Pension Scheme:
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The NHS Pension Scheme is a defined benefit public service pension scheme, which operates on a pay-as-you-go basis. A new reformed scheme was introduced on 1 April 2015 that calculates pension benefits based on career average earnings. Transitional arrangements permit individuals who on 1 April 2012 were within 10 years of normal pension age to continue participating in the old ‘final salary’ NHS Pension Scheme arrangements (the 1995 and 2008 sections).
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https://www.gov.uk/government/collections/nhs-pensions
EDIT: My bad, there is a separate Scottish NHS Pension Scheme, which looks very similar to the English one. Administered by the SPPA.
Details here:
https://pensions.gov.scot/nhs/your-membership/scheme-overview
Posted 4 years ago # -
We have 1 of 9 away it seems (unless they are ill). No banners outside out building yet, but we are quite far from the main campuses. There were a couple of people handing out leaflets last time, so imagine that will happen again this time.
Imagine there is more activity other places.
Did hear from some people that they felt the need to come in the back door, which is a shame.
Posted 4 years ago # -
Approximately one in nine attendees at the main Heriot-Watt picket arrived by bike this morning, one with a trailer.
Posted 4 years ago # -
I have a lecture up the Uni tomorrow night. If the building is picketed, I doubt it will be at that time, but if it is I will not go in. (No financial issue for me) but that is in my head the point of a picket line.
Now i am wondering about the derivation of Picket
quite possibly from Military Pickets who were sent out to watch for the enemy?
Posted 4 years ago # -
The pickets turned an Estates van away from Old College and it rebounded into the street in an unsafe way. Bloody eggheads.
Posted 4 years ago # -
CCE well represented at the rally in Bristo Square.
Posted 4 years ago # -
"...pickets turned an Estates van away... Bloody eggheads."
That really is terrible. Why on earth would someone try to stop someone else carrying out their day to day activities. You withold *your* labour, not everyone else's. I hope the incident has been recorded.
Posted 4 years ago # -
Baldcyclist - a picket line cannot prevent anyone from passing. Pickets can only seek to persuade people not to. The whole purpose of striking, and having a physical picket line, is to disrupt "business as usual".
Posted 4 years ago # -
If they're not willing to cross a picket line I doubt they're the type to tell tales either.
Posted 4 years ago # -
Posted 4 years ago #
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Could barely hear any of the speakers and totally chose the wrong bike for the job as my "good" bike is now absolutely filthy. Ah well, suppose I can't complain about not having time to clean it....
Posted 4 years ago # -
'Billy Brag - never cross a picket line'.
I'm not sure I see any similarity between some of the richest in our society trying to grab a few £s, when compared to some of the poorest in our society having their livelihoods removed at an industrial scale.
My heart doen't bleed when the rich feel hard done by.
(I've been both, I much prefer being rich*)
*I suspect many (even most) striking are richer than me.
Posted 4 years ago # -
@Baldcyclist
I don't think the pickets prevented the van entering Old College. I think the driver decided not to cross the picket line.
Since the disaster of the 3rd of May 1979 the percentage of UK GDP paid as wages and pensions has been steadily falling. The same goes for R&D spending. Wealth is being directed towards dividends, rents and asset prices. Trades union activity has been strongly curtailed over the same period and I don't think that's a coincidence.
The UK of GB&NI's retirement income systems are complex, scanty and risky. I wish our academics well in their (doubtless futile) attempt to protect their corner of it. Treating academics fairly is in no way incompatible with treating the poorest in society fairly. The thing we can't really afford is rich people.
Posted 4 years ago # -
Academics trying to protect their pension rights, which they thought were secure and will have formed the basis of many retirement plans, can hardly be described as "...some of the richest in our society trying to grab a few £s".
I will leave it to the resident CCE financial experts to debate how best to fund pensions, but I suspect that any money "saved" by offering academics poorer pensions is unlikely to make its way to the less well-off.
Posted 4 years ago # -
Shaming people for using their union membership to do exactly what unions exist for, i.e. provide members with collective bargaining power in negotiations with employers.
Interesting.
Posted 4 years ago # -
Actually you can scroll all the way up the page, I haven't tried to shame anyone. On the other hand some have tried to shame me with comments about thanking them for wage increases, and crossing picket lines, etc.
My view on pay is that we are a group of people who earn more money than 85% of our fellow citizens (by any measure rich, that's not shaming, just a fact), there are others more worthy of a few quid. I accept my not taking a bigger rise won't transfer it to others who are more deserving - maybe it's the estates folks who should be on strike!
^^This is why I'm not on strike.
I completely get the pension gripes, I share them. But hey the market. All pensions are being hit, we can pay more or take less, or work longer, or a bit of all. Or the system will fail. It's really our choice.
There has been some mention of use of ftc's which I do support. I battled for 3 years to get my staff off of rolling contracts. Really pissed me off very time I had to have another argument about that. If you want to pick a fight solely on that, I'm in. Or even better if you manage staff, don't accept that as a normallity, keep arguing when contracts are up for renewal, at the end of the day you check the FTC extension box!
Posted 4 years ago #
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