Increased tax significantly on pensions over £25,000

There is little justification for paying pensions - especially that derived from the public purse to civil servants - over say £25,000pa.

Many civil servants have been well paid over their working life and will have lined their nest during their working life. Nearing retirement they will have less financial burdens such as mortgages.

...and yet, they will receive a generous lump sum, and then a generous pension until death. Yes, they will have made contributions from their salary through their working life based on salary at time, although the final pot of gold is based on final salary. The agreements made at time of contract need to be challenged and broken if necessary. Governments break agreements and change rules all the time.

The simple mathematics show allowing someone to work 30 years followed by retiring 30 years on a half salary pension is obviously ridiculous

......but those people, ie you lot, are making the decisions and this won't change. Not until the final penny has been screwed out of the Isle of Man Treasury reserves.

Why the contribution is important

This is important because it highlights one of the major drains on the economy of the Isle of Man.

So here it is, put it on the table, discuss it and worm out of it.

by AlbertR on April 09, 2017 at 12:08PM

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Comments

  • Posted by dpfellows April 09, 2017 at 13:39

    Albert whilst I believe PS Pensions are the elephant in the room I differ from you in how to deal with this. I have suggested:

    1. Follow Irish and USA precedent and introduce a sliding scale percentage reduction - protecting those on lower pensions.
    2. Limit the amount that can be taken as s tax free lump sum to £30,000.
    3. Align public sector statutory retirement age to that being recommended by them for receiving the State Pension.

    I would also suggest that politicians' contribution rate is very significantly below the contribution rate that would be charged in the private sector for a scheme with the benefits of the Tynwald Members Pension Scheme. That differential is costing taxpayers about 10-15% according to an actuarial contact.
  • Posted by Southsider April 10, 2017 at 12:01

    We have enough difficulty attracting for example Health Care Professionals as it is, great way to put even more off coming to work on the island coupled with the fact there is also the need to attract youngsters back to the island post university.

    And as for just tearing up contracts, it would make all government employer / employee Terms and Conditions invalid at one fell swoop which works both ways.
  • Posted by dpfellows April 10, 2017 at 15:45

    Of course they will be attracted to an Island experiencing cuts in public services to fund pensions out of general revenue because the Pension Reserve Fund has gone broke....these are not easy choices but continuing to subsidise literally unaffordable Pensions is not sound economics.
  • Posted by Joe1000 April 17, 2017 at 20:46

    If the government scheme was in the private sector, we would all be getting letters telling us that the fund did not have enough money to pay your full pension, so you would be getting a reduced pension. With it being in the public sector the tax payers have to stump up regardless.
    If you dont have the minimum funding in a private sector, you cannot give yearly increases, i bet that does not apply in the gov scheme
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