Poor, poor strikers go shopping

[doodab]

Why should'nt we be forced to bear the risks of investing in a pension? Who's responsibility is it?

I'm not saying we shouldn't, I'm simply pointing out that it's employers who have benefited from this transfer of risk and people have lost out as a result. Essentially it amounts to a reduction in remuneration.

[Mich the Tester]

Why should'nt we be forced to bear the risks of investing in a pension? Who's responsibility is it?

I think there's an issue here; yes, we all invest at our own risk, BUT, as with any product we buy, the investment needs to meet certain basic standards; we need that because we can't all be experts in the field of everything we buy. Some pension schemes here in NL, and probably in the UK too, have turned out to be complete and utter rip-offs (regardless of the returns), with very high 'administration' costs that were completely opaque for the consumer. So there's a shared responsibility; the consumer makes a choice based on the information they can reasonably be expected to have, the provider must give clear and truthful information, and the government's role is to ensure that business practices fall within the law (which must also be written properly) and to tackle those companies who are ripping people off.

[DodgyAgent]

I think there's an issue here; yes, we all invest at our own risk, BUT, as with any product we buy, the investment needs to meet certain basic standards; we need that because we can't all be experts in the field of everything we buy. Some pension schemes here in NL, and probably in the UK too, have turned out to be complete and utter rip-offs (regardless of the returns), with very high 'administration' costs that were completely opaque for the consumer. So there's a shared responsibility; the consumer makes a choice based on the information they can reasonably be expected to have, the provider must give clear and truthful information, and the government's role is to ensure that business practices fall within the law (which must also be written properly) and to tackle those companies who are ripping people off.

The industry has indeed been regulated and to be fair to various governments it is now relatively easy to get good advice on pensions. Some may argue that because commissions are low no one is selling them - however this is all about balance. The reality is that very few of us have pension provisions at all - certainly in the private sector so reasonably the government has a scheme whereby everyone is entitled to a state pension.

However this is a world apart from the sense of entitlement that public sector workers feel. For some reason they expect the private sector to pick up the tab and pay them pensions that are far better than the basic pension and far better than the pensions enjoyed by private sector workers. Without the private sector there would be no economy at all without the public sector the world would still go round. This is the wrong way round and what has happened is that we have a bloated public sector filled with people who believe that the rest of society owes them a living and yet produce or deliver nothing.

[doodab]

A bloated public sector filled with people who believe that the rest of society owes them a living and yet produce or deliver nothing.

You really believe this tired rhetoric don't you. Sure, there are a few bad apples, just as there are a "few" bad recruitment agents, but the majority of these people are hard working and dedicated and really not very well paid at all.

[DodgyAgent]

I'm not saying we shouldn't, I'm simply pointing out that it's employers who have benefited from this transfer of risk and people have lost out as a result. Essentially it amounts to a reduction in remuneration.

It seems to me that employers can no longer afford to deliver on pension commitments, as a result most schemes have reduced their payments. So what? that is the nature of business and the markets. If corporations decide to reduce their pension payments they run the risk of losing staff or failing to attract good people. Right now they can get the workers they want without paying so much in benefits.. that's the market- no employer has an obligation to pay anything more than the legal requirement of pensions. Likewise if an employer doesnt feel he is getting a good pension deal he can go and work for someone else.

[BlasterBates]

I'm not saying we shouldn't, I'm simply pointing out that it's employers who have benefited from this transfer of risk and people have lost out as a result. Essentially it amounts to a reduction in remuneration.

Pension reforms were necessary because:
a) people change jobs more requently
b) people retire earlier
c) people live longer
d) traditional final salary pension schemes had become unaffordable

Company pensions were always self-financing traditionally companies have never subsidised pension funds. Obviously as a benefit some companies will contribute to your pension, as was always the case.

There is no sensible alternative to the transfer of risk to individuals.

People in the public sector really need to get to grips with economic reality.

[DodgyAgent]

You really believe this tired rhetoric don't you. Sure, there are a few bad apples, just as there are a "few" bad recruitment agents, but the majority of these people are hard working and dedicated and really not very well paid at all.

It is tired rhetoric and you seem to skip coming up with any supportive, logical argument that suggests that public sector delivers its services efficiently. I would turn your statement around and say it contains a few good eggs.

Public sector workers take far more days off sick
Public sector workers work shorter hours
Kids coming out of public sector schools are far less likely to have achieved academic success than those educated in private schools
And the UK's border controls functioned better with volunteers than it did with regular staff.
People in the public sector cannot be sacked

I once interviewed 5 people from the public sector and hired one - big mistake. he was obsessed with his "entitlements" and had no idea of how to take responsibility for anything - he didnt last long.

[Mich the Tester]

People in the public sector cannot be sacked

Putting it quite extremely, but indeed, it's very difficult to get rid of poorly performing people in the public sector; that's not just a problem for the taxpayer, but also for those public sector people who DO perform well. Same here in NL; I've done gigs in government agencies, and found that while there are plenty of competent people, they tend to be absolutely resistant to change, refuse to carry out new tasks which aren't listed in their job description, and can get away with resisting change because they know they can't be fired. Different matter in business, where change is the order of the day, and if you don't accept that, you'll be out very quickly indeed.

[doodab]

It seems to me that employers can no longer afford to deliver on pension commitments, as a result most schemes have reduced their payments. So what? that is the nature of business and the markets. If corporations decide to reduce their pension payments they run the risk of losing staff or failing to attract good people. Right now they can get the workers they want without paying so much in benefits.. that's the market- no employer has an obligation to pay anything more than the legal requirement of pensions. Likewise if an employer doesnt feel he is getting a good pension deal he can go and work for someone else.

Pension reforms were necessary because:
a) people change jobs more requently
b) people retire earlier
c) people live longer
d) traditional final salary pension schemes had become unaffordable

Company pensions were always self-financing traditionally companies have never subsidised pension funds. Obviously as a benefit some companies will contribute to your pension, as was always the case.

There is no sensible alternative to the transfer of risk to individuals.

Both of you make the case that existing pension commitments are unaffordable. Assuming that is the case and it's not simply a question of seizing an opportunity to increase profit, how can companies afford to pay people enough that they can afford a decent pension? The answer of course is that they cannot, therefore the state (and therefore all taxpayers) will have to pick up the shortfall when people reach old age. You may object to the sensible option of investing now to provide a worthwhile pension for public sector workers, but the reality is that by allowing this to happen you're simply picking up the tab for both public and private sector later, without making any provision to do so.

The other side of the coin is that by reducing payments into pension funds you are, purely and simply, reducing investment in the future to increase returns on the investments of the past. These savings of billions of pounds are actually a reduction in investment of billions of pounds.

[DodgyAgent]

Both of you make the case that existing pension commitments are unaffordable. Assuming that is the case and it's not simply a question of seizing an opportunity to increase profit, how can companies afford to pay people enough that they can afford a decent pension? The answer of course is that they cannot, therefore the state (and therefore all taxpayers) will have to pick up the shortfall when people reach old age. You may object to the sensible option of investing now to provide a worthwhile pension for public sector workers, but the reality is that by allowing this to happen you're simply picking up the tab for both public and private sector later, without making any provision to do so.

The other side of the coin is that by reducing payments into pension funds you are, purely and simply, reducing investment in the future to increase returns on the investments of the past. These savings of billions of pounds are actually a reduction in investment of billions of pounds.

If the money is not there how on earth can it be paid? It is all very well to roll out the "profits of a company being maximised" as if it is a crime to make a profit, but you seem to ignore the fact that these profits are paid as dividends that go to pay pensions. Your attitude to profit is wrong the problem this country has is that there are too few people making profits and too many spending them. This has to change and it wont change whilst we are paying public sector worker entitlements.

If you are so wound up about feeding the entitlement of public sector workers why don't you write out a monthly cheque to Unison or whoever