Public Sector pensions

[StraferJack]

A brickie? Paying taxes all those years? ;-)

But your points are well made and I agree with them in large part. The first part of that last paragraph in particular - everything HAS changed. But I think we need to have a bigger conversation than "these pensions have gone the way of the dodo, so so do those"

Across all jobs, companies and governments (and by that I mean voters) are reacting to a changing world rather than looking to shape it. We are missing someone with a bigger vision. We will probably shoot that person with a bigger vision. Bad people will also see the gap in the market for that visionary person.

But whilst we can't go with the status quo, I'm inclined to sympathise with people who cling to what they have whilst (seemingly) other people splash the cash like there is no tomorrow

[david_carnell]

Ok. We are both in agreement that private pensions are a pretty poor deal. And I'm pleased you recognise the role the financial sector had to play in the failure of large numbers of private sector pensions. I'd likewise applaud the sentiment that large sections of society are either ignorant or apathetic to their long term financial futures. And I think that's something that determination could rectify.

And I agree that the scale of contribution for public sector workers is less than their private sector brethren. My small amount of financial acumen would tell me that the reason for this is two-fold but I suspect, and would be interested in other reasons. Firstly, scale. With millions of workers paying into central pools the scale of return on investments can obviously be higher. Secondly, profit. The public sector doesn't have shareholders demanding dividends. Money diverted by a private sector firm into a pension fund will, by necessity, take money away from the bottom line and affect share price.

But here we are talking about fundamental economic principles. The building blocks. Not something you can tinker with without the whole house of cards collapsing.

Your anecdote is also interesting for similar reasons. It highlights some truths but doesn't really give answers. Your self-employed brickie friend: his lack of saving (only a few grand over 40 years?!) could be a sign of penury or just of being a bit of a dolt when it came to saving for retirement. Such is the choice you make when becoming self employed. Then again, and without tarring all builders or attempting to insult your friend, I'm sure there were more than a few cash-in-hand jobs over those 40 years that escaped the attention of Her Majesty's tax inspectors. Swings and roundabouts.

The soldier/copper has clearly worked in two of the most demanding public sector roles which pretty much ensure burn-out by your mid-fifties and, rightly in my opinion, enforced retirement. I think he's lucky to get such a good deal but I don't begrudge it. However, your generation is one of the last to enjoy such high levels of pension. Final salary schemes are a thing of the past for new civil servants. As I've previously highlighted, changes in 2007 put our retirement in line with all other workers and contributions have increased.

I think these are significant enough to not endanger the economy or future government pay-outs. I don't believe that I should be penalised further because I've decided to work in the public sector. We are currently bearing a burden through redundancies and wage freezes (whilst inflation rockets, private sector pay has risen by 3% and general unemployment falls) and paying the price for an economic crisis we didn't create.

I repeat again that I don't think these battles are being fought by the government over fiscal necessity but instead through political zeal; to see a traditional enemy and thorn in the side of privatisation and outsourcing beaten into submission.

[david_carnell]

And I don't want to keep buggering on about the contempt this government (and wider Conservative Party) show for working people but two in a day is just too much. First we had the "let's allow people to opt out of the minimum wage" clap trap earlier and now this:

A Tory MP has sparked anger by suggesting that people with disabilities should be able to work for below the minimum wage in order to compete more effectively for jobs.

Philip Davies claimed people with disabilities or mental health problems were disadvantaged because they could not offer to accept lower wages.

It truly beggars belief.

I am in no way equating either of these standpoints with the mature debate Quids has posted in these halls, for the record.

I just wanted to point out where we are heading.

[StraferJack]

On the plus side, a MP (from any party) suggesting something is often a long way from becoming policy

and he was challenged by other Tory MPs on it...

So I'm not worried about that specifically - but there does seem a sense amongst the more extreme MP's that now is a good time to float all this bobbins, in the hope that some of it will stick

Floating AND sticking? It's clearly Friday

[david_carnell]

Oh, I'm well versed in arcane parliamentary procedure to know some random back bench amendment or early day motion has as much chance of becoming law as I do of becoming PM.

And I'm aware that amongst Labour MPs there are some proper nut-jobs as well (step forward Jeremy Corbyn, your time is up).

There is a nagging...."but" in there somewhere though.

[StraferJack]

I see he tweeted the following

"Left wing hysteria now dictates that you can't even repeat what people with learning disabilities tell you if it questions their shibboleths"

I like that.. You have to be left wing if you oppose him

[Undisputedtruth]

???? Wrote:

-------------------------------------------------------

> How long are the PS Unions and many, not all, PS

> Workers going to continue to defy economic reality

> and when it comes down to it principles of

> fairness for society as whole on this issue?

There is no fairness in society. Bankers continues to receive their inflated bonuses even though they caused the credit crunch. Suggestions about bonuses were subsidised by the British taxpayer. Tesco, Boots, Vodafone, Barclays and many others not wanting to pay their full taxes as patriotic British companies to the tune of ?25bn.

Where is the fairness in reducing the average public sector pension of ?4000 pa? Hardly enough to live on.

UDT

[Loz]

Undisputedtruth Wrote:

-------------------------------------------------------

> Tesco, Boots, Vodafone, Barclays and many others

> not wanting to pay their full taxes as patriotic

> British companies to the tune of ?25bn.

Ahh - the magic 'tax evasion' number. This seems to vary between a few billion to over a hundred billion a year, depending upon who is making it up at the time.

Between that and the amazing Robin Hood tax, they are touted to solve every financial problem going. What financial crisis? Huzzah!

[indiepanda]

StraferJack Wrote:

-------------------------------------------------------

> The actuaries in the private sector who for years, despite advances in medicine and living standards,

> continued to sanction old pensions levels up until relatively recently in the private sector need to

> be scrutinised. How did they maintain that it was doable for so long? And how did it it go almost

> overnight from ?yep? to ?no way jose?

Am not sure whether to be pleased that someone has heard of my profession or somewhat embarrassed at the context. Relieved at least that I can say am not in pensions so can't take the rap on this one.

In seriousness, I think the issue of private sector pensions being unaffordable on an ongoing basis is not something that has only just been recognised. There are very few final salary schemes that are open to new joiners and a number of those that are in existence have closed the scheme to future accruals and I wouldn't be at all surprised if many went the same way.

It wasn't just under-estimates of the future life expectancy increases that led to the death knell being sounded for private pension schemes, it was the payment holidays taken by companies in the late 1990s when many pensions schemes were showing healthy surpluses and the subsequent market crash when the dot-com bubble burst in the early noughties. Actuaries cannot be blamed for all of those issues.

Having said that, I suspect more bad news is still come on life expectancy. I have to admit if I were the type to set up my own life insurance company (I'm soooo not), I wouldn't touch annuities with a barge pole, far too risky.

As for the public sector pensions, I am largely in agreement with Quids. The retirement ages now were set at a time when life expectancy was much much lower and the cost of funding those pensions has been increasing dramatically over time.

It's not pure jealousy that makes me say I don't think it's fair that public sector workers should benefit from a generally more generous pension scheme linked to final salary or career average rather than having to run the risk of markets falling and life expectancy increasing reducing the value of our defined contribution pension savings like most of us in the private sector. It's a feeling that it is intrinsically unfair that I should have to pay more tax to fund those pensions. Sure, some public sector jobs are demanding and unpleasant - that's true of plenty of private sector jobs too. And private sector employers are not going to be willing to go back to the days of defined benefit pension schemes no matter how many unions get involved.

It's so easy for people to say "the government should pay for...." - but it's not the government, it's tax payers. And there is never going to be enough tax to pay for all the things everyone thinks "the government government should pay for..." and if cuts have to be made, I don't think this one is unreasonable.

I have to say that

[StraferJack]

I dont think "people" say 'the government should pay for...' anywhere near as much as private companies do

As for jealousy and pensions - I'm inclined to say we have generally listened to the financial soothsayers for too long and believed the promises. Even with the best of intentions on their part, they are a busted flush. All that expertise should be generating more answers. Its less to do with expertise and more to do with reading seaweed for the weather. So the model of pensions is being clinched tighter by public sector is it? Well it might be broken but show me what replaces it. My comrades in the private sector are rather gloomy about their prospects so I have sympathy with those in the public sector who still have a say in the matter

I'm not qualified to say what kind of system should replace current models but I'm open to ideas.

[indiepanda]

Well it's not an easy thing to fix.

The reality is most people have got fixed on the idea of being able to retire at a certain age rather than being able to enjoy a certain number of years of retirement, and with life expectancy increasing over time, there an increasing cost associate with that retirement age which to maintain the same level of income as before, means increasing costs that would have to come from somewhere, be it employers, individuals or out of taxation.

In many respects I don't think is an issue that can be solved in isolation. Many people are not in a position to save more for their retirement even at levels of income where they should be, because of excessive levels of personal debt, be that mortgage or other kinds of debt. And whilst some responsibility for some of that rests with the individuals, I think a fair amount of it rests with the government for being far too lax in regulation of banking. I can't help thinking if banks hadn't been allowed to lend such high income multiples and LTVs, house prices wouldn't have escalated as rapidly as they did. And the way in which companies are allowed to continue to push credit on people that really can't afford it is just wrong. I used to get at least one offer for a pre-approved credit card every week before I joined the mailing preference service and I only paid off the debt I ran up post graduation with profits from the sale of my first home.

We also seem to have a real issue with income inequality - for many low to middle income workers, real salaries have barely been increasing while those of the company boards and senior management have been racing away. Whilst they argue that those salaries are needed to attract the best talent, the ratio of top to bottom earners in UK and US companies is meant to be rather higher than other European and Far Eastern similar companies so am a little skeptical about that argument. Part of the issue is the owners of the company shares don't seem to be willing to do enough to challenge these massive pay packages, and in many cases, the owners with enough clout to make a difference are the pension funds.

It seems to me until such time as we can solve some of the other economic issues we face as a country it's hard to see how you can solve the pension issue by any other way that accepting many will retire later and potentially with a lower income.

And if all this wasn't enough, the EU have plans to increase the capital insurance companies have to hold on pension annuities, making them even more expensive than the rates others have quoted here. It is supposedly in the interests of the customer - making insurance companies more financially secure. Oh and then there is the ruling that insurance companies cannot charge different rates for men and women - not great news for men retiring from December 2012. Though I guess at least for women will stretch their usually smaller pension pots a little further.

[sagatelsagouni]

???? your not right in the head mate, you have been blowing far to many bubbles it's adled your brain.

" PS Workers going to continue to defy economic reality and when it comes down to it principles of fairness for society as whole on this issue? " who's economic reality ? your limited grasp maybe ? As for principles and fairness for society on a whole, thats what the modern unions are fighting for, you just don't get it.

Then wonder boy in his idignant rant goes onto answer his own bloody questions

" the vast majority of private sector employees (the majority of employees) who are on average wages, have massive job insecurity and inadequate private pension provision "

Yes well done, why do you think that is ? because they have not organised a union within their workplace and have been subject to private sector management creating dog eat dog workplace ethics, while their T+C's have been stripped away and turned into shareholder profit.

People like you ranting about union figure heads like Bob Crow, buying into conservative and liberal propaganda have been aiding the anti union messages turning young people of getting involved and re-directing the unions. Its bloody ridiculous.

Bob Crow as 1 example has 40000 members who vote democratically on ballots that are presented to them, do you really think he can control how these people vote? its a proposterous piece of right wing propaganda. And while you sit there mouthing off and doing the work for them, their mates in big business sit back and take the bloody money. your a fool and a claret one at that.

[DJKillaQueen]

That's a very good post indiepanda. The other thing that has changed in the past 50 years also is the flexibility of the workforce, with most jobs being on a contract to contract basis. Even if the government wanted to enforce a universal scheme on all workers (both private and public sector) it would be hard to do given how often the labour market is forced to change jobs.

Just to comment on the point in the previous post regarding the lack of union influence in the private sector. That too is partly a direct consequence of the changed labour market described above. I work in a freelance sector and am part of a uinion for my industry but that union has no power to call anyone to strike. Why? Because when you are a freelance worker, you will soon be out of a job and if you want another then you can't antagonise employers, esp if your industry is a small one. So freelance workers tend to be too afraid to strike.

[Otta]

People like you ranting about union figure heads like Bob Crow, buying into conservative and liberal propaganda have been aiding the anti union messages turning young people of getting involved and re-directing the unions. Its bloody ridiculous.

Actually, I think Bob Crow just being Bob Crow has fuelled more anti union feeling.

[Undisputedtruth]

I too like to echo sagatelsagouni's above post.

???? works in the banking industry where banks are usually far too removed from social justice. Remember banks were set up in the 17th century to finance the slave trade and the Bank of England was set up help fund military building. In recent times they have caused misery to millions of people around the world. Why would ???? come to a sensible and just conclusion?

UDT

[Otta]

Yeah. Quids is a lot like a slaver. As is everyone else who works in a bank.

[Huguenot]

It's a ridiculous assertion that someone working in a bank can't be trusted because 300 years ago the banks were involved in slavery and military spending.

That's embarrassingly silly.

Bob Crow's reputation at the RMT is such that it attracts militant yobs into its ranks who use threats and menaces to get their own way. The 'democratic endorsement' of this crowd is hardly worth the ballot papers they use.

[Undisputedtruth]

Huguenot Wrote:

-------------------------------------------------------

> That's embarrassingly silly.

Why, when you misconstrued my words?

Look what happened to the Labour party when they trusted the bankers.

[Loz]

Undisputedtruth Wrote:

-------------------------------------------------------

> Look what happened to the Labour party when they

> trusted the bankers.

They became electable?

[Undisputedtruth]

Loz Wrote:

-------------------------------------------------------

>

> They became electable?

Or rather it gave the Tories the opportunity to blame Labour for causing the deficit.

[????]

er, ????s doesn't and has never worked in the banking industry....prejudice and assumption from leftwingers shocker. One dimensional thinking about anyone who dares question the sacred cows of the left, no wonder reforms so impossible with such deeply entrenched small 'c' conservatism all over so called progrressive thinking. GET YER THINKING OUT OF ITS STRAITJACKET PEOPLE

[Undisputedtruth]

Sorry, I assumed you worked in the banking industry by the nature of your posts. Don't agree with the rest of your sentence though. It does confirm your prejudices.

[????]

Come on when was the last bit of radical or progressive thinking from the left? They've had an open goal for the past 4 years and still failed to provide much of an alternative. Genuienely how do we compete in a global eceonomy which is pulling millions out of global poverty but gradually eroding the wealth and priveliged poition that the west has enjoyed at the rest of the worlds expense for too many years? hint it doesn't involve maintaining uneconomivc benefits and agreements drawn up when things were very different. We'll go bust in the end unles we embrace the need for change....as progressive unions/workers in say car mannufacturing have realised, white collar middle class PS workers still seem to think there's a goose with golden eggs somehwere (or the money tree SJ)

[StraferJack]

OMG!!

I just realised. ???? is totally right

We have an ineffective left and the right/business are leading the way. And pulling everyone out of poverty

All that worrying over years and years and I needn't have bothered

Because it turns out

Everything

Is

Ok

Everything

Is

Sorted

(or nearly)

I've been a fool to myself

[StraferJack]

On the one hand, we hear the left have had an "open goal for 4 years" (why? because everyone else has been so wrong? By implication anyway)

But it turns out it's not REALLY an open goal because there is no alternative to current thinking according to ????

That open goal is a mirage. And they are fools, FOOLS I TELL YOU, to even aspire to anything else (however clumsily)