Million euro early retirement pensions for civil servants on €60k p/a

[cyberianpan]

Many of those in the private sector could only dream at the millionaires in the civil service. For a civil servant on €60k p/a the latest "early retirement" deal offered to them ups the value of the overall pension package by €364,000 to €1,021,680.

Also this is the same government that "can't afford HSE job cut plan" as they hadn't enough redundancy money... proof, if ever more was needed of the State's funny accounting procedures (whereby current spending, not liabilities is what counts)

Sunday Times
Under the new scheme, public servants earning €60,000 a year will get an immediate tax-free lump sum of €6,750 and a pension of €22,500 a year if they retire at 50 after 30 years’ service. This will be topped up with another tax-free payment of €60,750 when they reach 60.
Private-sector employees would need €1,021,680 in their pensions to secure the same deal, according to Gilhawley’s calculations, reported in the May issue of Irish Broker, the magazine of the Irish Brokers Association (IBA).

cYp

[DCon]

disgraceful

[spidermom]

Many of those in the private sector could only dream at the millionaires in the civil service. For a civil servant on €60k p/a the latest "early retirement" deal offered to them ups the value of the overall pension package by €364,000 to €1,021,680.

Also this is the same government that "can't afford HSE job cut plan" as they hadn't enough redundancy money... proof, if ever more was needed of the State's funny accounting procedures (whereby current spending, not liabilities is what counts)



cYp

Posted before I got the chance...Ta

Robbing from Peter and then still having no money for those who Paul might look after!!!

A good few years off 50 (myself) and will not qualify anyway...should it last.....would wonder that only the best will go(they know they might pick up work in the future) and the dross will stay on!!!! and at what cost and at what overall benefit???

[DeGaulle 2.0]

Many of those in the private sector could only dream at the millionaires in the civil service. For a civil servant on €60k p/a the latest "early retirement" deal offered to them ups the value of the overall pension package by €364,000 to €1,021,680.

Also this is the same government that "can't afford HSE job cut plan" as they hadn't enough redundancy money... proof, if ever more was needed of the State's funny accounting procedures (whereby current spending, not liabilities is what counts)



cYp

The calculations quoted by the ST do not make sense.

If civil servants who retire at 50 get 22500 per annum and live on average until 90, then they will have received a total of 900000 + lump sum of 67500. To say that it needs over 1 million up front to pay for this is obviously wrong.

I don't think that the early retirement scheme is a good idea, but ...

[cyberianpan]

The calculations quoted by the ST do not make sense.

If civil servants who retire at 50 get 22500 per annum and live on average until 90, then they will have received a total of 900000 + lump sum of 67500. To say that it needs over 1 million up front to pay for this is obviously wrong.

I don't think that the early retirement scheme is a good idea, but ...

Actuarial calculations are tricky , also AFAIK these pensions are index linked ... so say 5% rise per year would account for the difference ?

cYp

[DeGaulle 2.0]

Actuarial calculations are tricky , also AFAIK these pensions are index linked ... so say 5% rise per year would account for the difference ?

cYp

If you have 1,000,000 in your pension fund starting off, then the fund should also increase by a few percent a year (hopefully). For examply, suppose the fund increased by 3% the first year - that's 30,000, more than the first year's pension to be paid out.

[cyberianpan]

If you have 1,000,000 in your pension fund starting off, then the fund should also increase by a few percent a year (hopefully). For examply, suppose the fund increased by 3% the first year - that's 30,000, more than the first year's pension to be paid out.

Indeed - I'd have to see details of the civil service increments (which I think beat inflation & thus investments) to be full convinced of their veracity. But googling Tony Gilhawley, the actuary who did the report, seems to show that he is well published in Ireland (thus not too likely to goof)

cYp

[The Emperor of Absurdia]

Get a grip - surely this article points to the simply awful commercial offerings of the pension sector. Give me a cool €1million and I'd retire in comfort today !

I have colleagues whose pension values have been halved in the past few years. If this is the investment model then I want out. I also see them doing their projections based on current interest rates (at an all time low - therefor rubbish multiplier) but advertised returns are based on expected market returns (any one remember 8%). Oh and what about the impending inflation ? I loved the recent intervention whereby annuities could be bought via NTMA with nil fees while the efficient market charged 10%. What a rip off. Here's an idea why not let the NTMA buy all annuities.

Does anyone think €22K pa is life in luxury. Meanwhile the guys sponsoring this kind of crap are strolling out with multi million cash pensions after only a few years. I just did a quick excel where I had 1million at a constant 3% return paying myself a 40K p.a. updated by 2% P.a. This lasted 30 years which is about twice what was suggested earlier.

Seriously, how easy is it to spin p.ie'rs

[Dios]

Get a grip - surely this article points to the simply awful commercial offerings of the pension sector.

The commercial offerings represent the real world value of pensions. The public sector pensions represent a fantasy world built on the back of taxpayers.

[odie1kanobe]

The calculations quoted by the ST do not make sense.

If civil servants who retire at 50 get 22500 per annum and live on average until 90, then they will have received a total of 900000 + lump sum of 67500. To say that it needs over 1 million up front to pay for this is obviously wrong.

Nope the figures are correct as the statement is a Private sector employee would need the equilvalent of this to get the same benefit.

To buy an Annuity to give you this it is suggested would cost 1 Million and that is what they are basing the calculations on.