Support to raise retirement age

[boatyboy]

An interesting older document on the subject of retirement, selective quotes,  please read further should you want the fuller picture, using the link below. One wonders who originally thought up this plan ?

In July, 2000, the States approved Regulations which made changes to the pension conditions which apply to paramedic ambulance staff employed by the Health and Social Services Committee. This was part of a series of changes designed to develop the ambulance service into a professional, emergency service.

The effect of the changes was to place paramedic ambulance staff into category A of the pensions Regulations. This meant that they henceforth had a normal retirement age of 55 and optional retirement age of 50. (Previously the ages had been 65 and 60 respectively). Their pension calculation accrual rate was also improved - to 45ths (of salary for each year of service) for members of the ‘existing members’ scheme and 60ths for members of the ‘new members’ scheme.

It is now necessary to alter the pension conditions of the three civil service ambulance managers in order that proper succession planning can be made within the service. This is normal for the senior management grades within the emergency services, such as Police, Fire, Prison and Airport Fire and Rescue Services. This involves placing the three managers into category B of the pensions regulations. This means that officers will have a normal retirement age of 60 and optional retirement age of 55. Pension calculation accrual rate will also be improved - to 45th for members of the ‘existing members’ scheme and 60th for members of the ‘new members’ scheme.

The changes are parallel to changes made to other Regulations relating to the scheme. The changes will have the effect of improving the benefits for the Chief and Assistant Chief Ambulance Officers provided their basic salaries have been reduced by 4%.

Lodged au Greffe on 26th November 2002
by the Human Resources Committee

http://www.statesassembly.gov.je/documents/propositions/27735-37582.htm

[boatyboy]

I was reading an interesting post about Chris the new candidate, but I thought the thread would be better continued here. Hope thats ok Mods.

Jersey is small compared to England, on the BBC's Jeremy Vine show today, was the subjects of immigration, and migration. Englands' massive clumsy democratic Government is starting to form the opinion that there are enough people on their island. If they start measures to stop immigrants from non EU countries soon, then in 2050 there will not be 78.5 million people just a mere 65 million. They say England superstructure cannot take that many people. They are also questioning whether it’s a good idea to pay people to have children?

Also if you are new to PJ this may interest you.

http://planetjersey.co.uk/forum/index.php/topic,342.msg6984.html#msg6984

[Jason the Maverick]

One of my biggest gripes at the moment about living here and I have brought this up before, is that apart from a pension plan, young people are NOT being encouraged to save.  We have no version of an ISA.  Tax relief on endowments has been abolished and if people have no incentive to save it could cause future problems on the State.  In fact it will.  People should be given the incentive to at least put some money away tax free even away from a pension.  This issue has really been ignored lately.

[boatyboy]

I agree with you Jason, but when you are younger the money would probably be saved for a pension, but may find its way into the housing market becoming a deposit for a property. 

[Jason the Maverick]

The trouble is even if your money can be put into property now, you have to earn a lot of it.  Tax relief on mortgage interest is being stopped so buying a house or even a flat for a young person is a tough decision nowadays.

[danrok]

I agree with you Jason, but when you are younger the money would probably be saved for a pension, but may find its way into the housing market becoming a deposit for a property. 

Property is not much of an investment, unless you are a cash buyer, play for Man Utd., etc.

The interest paid out on a mortgage counters any rise in the value of the property.  If prices go down, then its a big loser.

In any case, if the property you have invested in, is your home, you're not going to be able to spend any of its value, unless you sell it. Then where do you live?

ISAs, on the other hand, allow you to access your money in the event of an emergency.

[boatyboy]

danrock. property is not an investment, I will have to disagree with you. providing a half decent property is purchased, and not a cheaply built one bed flat.

Property is and always will be a long term investment. Ten years would be a reasonable time. Also its good to know that you cannot be kicked out unless you default on the morgage, and will always have a roof over your head. It is very difficult to get on the ladder on an average wage though.

[boatyboy]

This item is about final salary pension funds, as operated by the States of Jersey.

Pension contributions are added to a fund that is then deposited and used to attract interest from financial institutions. We are all aware how badly the stock market and banks are doing which will have a negative effect upon all pension schemes.

Over to the Daily Mail Oct.9th 2008 extracts from page 9. Quote
By Edward Heathcote Amory …(brackets my words )

But even with a final salary pension, you have worries too. The first is that your employer will either close the scheme to new members, or shut it down entirely, so that you keep your current rights, but don’t acquire  any new ones. The stock market catastrophe makes it far more likely that the remaining final-salary schemes will be closed.

More worrying for the economy, however, is that if company (Government)
pension liabilities become to large, they will undermine otherwise healthy firms ( needing to tax more to keep them afloat)

Which brings us to back to the public sector pensions disgrace. As everyone who works in the private sector watches the comfortable retirement from which they had hoped disappear……like a mirage in the dessert, are they going to be prepared to pay for generous handouts , to their neighbours in the public sector.

Of course not. So the first job of an incoming government, as well as setting about rebuilding our private pension pile of rubble, is to call time on Britain’s ( Jersey‘s) pension apartheid.
Of course. there will be howls of rage from the unions. But there are hard times coming , and everyone will have to share the pain.

Extract from
Auditors General Chris Swinson report.

Pension schemes
64.
At the end of March 2008, I published three reports on various aspects of the pension
arrangements which are available to the States’ staff. In brief, I concluded that:
(1)
whilst the States’ pension schemes offer pension benefits that exceed those made
available in the Island’s private sector,
(1)
the PECRS might be terminated and replaced with a DC scheme, or

Page 19 of 50
(2)
the PECRS could be divided so that the existing terms would continue to be
available to employees for whom considerations of competition over recruitment
are material and other terms were available to employees for whom such
considerations are inappropriate.”

In voting, will your candidates be minded to look after the long term financial future of  you and your island home ? or will they just simply not have a clue.

Boatyboy.

[soon]

This is an extract from the link below. There is no guaranteed payment of the States employees pension scheme for those entering it post 1987. I don't know the situation pre-1987.

"The 1987 PECRS Law transferred the underlying risk of the Scheme to Scheme members, but allowed the employers to contribute to any deficiency should they choose to do. If the employers choose not to exercise this option then the position is that any deficiency, which is not carried forward to the next valuation, will have to be made good by members of the Scheme by –
 
            ·           increasing the contributions of current or future members;
 
            ·           reducing future pension increases; or
 
            ·           reducing benefits of current or future members."

http://www.statesassembly.je/documents/reports/18637-49249-2132006.htm

As far as I am aware the sort of changes that the Auditor General refers to have been lying in a senior States employee's pending tray for years. The link with the States cuts both ways - as it stands I believe the States can raid the pension fund

[The Rev Peter Sarkey]

I think people should retire when they want as long as a doctor says they are fit.

[Sarah Ferguson]

The C&AG does not recommend changes in the pension funds - the changes should come first from the general HR structure. 

Some time ago the concept of the pension fund being in a standalone trust was recoemmended but there has been indecision on this front.  At the moment the States has to make good any shortfall ( as calculated in the actuarial report). 

The C&AG does recommend that the pension scheme should not be unduly generous when compared with the equivalent pension funds in the UK.

[boatyboy]

Quote from Soon

The 1987 PECRS Law transferred the underlying risk of the Scheme to Scheme members,

Quote from Sarah.

At the moment the States has to make good any shortfall.

                                  ------------------------------
Two questions if I may Sarah.

1. When was the PECS law amended from the members risk to the taxpayers risk.

2. As a politician, do you feel the finally salary system is a fair system with the public purse guarantees ? unlike private pensions.

Thanks

Boatyboy

[soon]

At the moment the States has to make good any shortfall

So are you saying that the the Chief Minister's Statement in 2006 was wrong, or has been superseded?
http://www.statesassembly.je/documents/reports/18637-49249-2132006.htm

[danrok]

danrock. property is not an investment, I will have to disagree with you. providing a half decent property is purchased, and not a cheaply built one bed flat.

Property is and always will be a long term investment. Ten years would be a reasonable time. Also its good to know that you cannot be kicked out unless you default on the morgage, and will always have a roof over your head. It is very difficult to get on the ladder on an average wage though.

Perhaps you bought a house via a mortgage in the 1960s.  If so, I can see why you would think of that as an investment.  Houses have increased in value by 50 to 60 times, since then.  This will not be happening again.

Times have changed since then.  There is no guarantee that a property bought today will be worth more in 10 years time.  Just ask the banks - they are overrun with repossessed  houses which are effectively worthless, or are about to be overrun with even more.

[boatyboy]

In the late 90s danrock, interest rates rocketed to 15% and sadly many lost there homes being unable to afford the crazy rates.

The house market was flooded with properties as people defaulted. The big wheel of life clicked around and as you mentioned, times have changed nope not at all. Greedy banks played a new game  " called loads of money" once it all settled down off we go again. 110% morgages.

I have some answers, it is all Governments fault caused simple by not understanding the human being. Thats for another time. Give it another six months or year, buy in, sit on it. Property may even drop thirty per cent in value, family houses went up over 20% last year. So 8 years up two years down still a long term winner. Always will be with a growing population in a civilised country.