How big should my pension pot be ?

marklv

Perfect_Choice wrote: »

“I totally reject your suggestion, as it is born of envy, not logic.”

Certainly not, I call it being fair, workers on both public and private sectors should have the same rights and benefits based on their income.

Perhaps I should use the word greed in response then for your view, if you want better, you work for it! I have too worked in public funded operations and now the private sector. That is irrelevant going forward as the work place is changing so rapidly, what matters is the future and it’s funding.

This thread discussion was on the limiting of who receive state pension to fund future costs for its provision. I have deliberately highlighted that there are other ways to fund future costs including the removal of final salary public pensions which is now well overdue.

Somebody who earns £40Kpa in a publically funded authority (or much higher, e.g. comprehensive school head teacher say) and somebody who earns the same in the private sector, should be under the same pension contribution model and if that means money purchase schemes for all to make it affordable then so be it.

That would be a fair model and should an equal footing wherever you work. I could understand the logic of a cap on who received a full state pension based on their annual pension if set high enough not to impact on saving for a pension in the first place by the masses, but in no way should others be left to take their “gold plated” final salary pensions while the rest of us take a risk on the market performance and our own investment decisions!

As regards rights for services for all like the NHS, then perhaps we should take that further on paying, so should those who incur illness due to their own fault pay for their treatment, so let’s start with drinkers, smokers, overweight people etc. However that would be biased towards the less well off wouldn’t it so we start to get down to the fundamental issue of what a basic right for all is whether it is a public service like the NHS or a state pension.

I understand where bendix is coming from, my opinion is to open up views on where funding needs to come from, not just capping who receives state pension, but changing the public pension provision as well for current workers to match those models which now apply for the vast majority of the private sector, certainly if staff are earning the same levels of income.

The problem is that many public sector jobs do not have private sector equivalents, so you are comparing apples with oranges. And if life in the public sector is as rosy as you claim, then why is it so difficult to find a NHS dentist these days? Do local authority accountants and lawyers receive any share options or bonuses? Of course not. The final salary pension is the one good benefit that public sector professionals receive; take that away and you remove the only pecuniary incentive to work in the public sector. In a civilised society the state sector needs to be valued as much as the commercial one - both need to coexist in harmony, not compete against each other. The ethos of the public sector is not to make profits but to provide a service to the public, so the type of person who is attracted by a public sector career is different from the one who aims for the commercial world. You need incentives for both of these types of individual, otherwise you will only see lazy and incompetent people working in the public sector. Do you really want to see that?

bendix

Sorry marklv, but hearing you defend public sector pensions schemes is like asking the Arsenal manager in to talk about Eduardo's diving fine.

Every single argument you can make can henceforward be rebuffed with: "Well, you would say that, wouldn't you?"

marklv

And one could say the same about those in the private sector who moan endlessly about public sector pensions. The argument goes round in circles.

bendix

On the contrary. I am firmly against final salary pensions. They have crippled private sector employers and they are crippling finances of the public sector.

I want to see public sector workers face the same financial realities as those in the private sector - everyone treated the same way.

I stand to gain nothing financially from my position. You, on the other hand, do.

marklv

Final salary pensions could have been sustainable had it not been for four things:

1) employers taking 'pension holidays' when the funds were (very temporarily) in surplus
2) government legislation to tax dividends in pension funds
3) new accounting rules forcing companies to declare pension deficits on the balance sheet
4) employers being allowed to place most pension funds in high-risk and unpredictable investments (e.g. stockmarket funds)

bendix

marklv wrote: »

Final salary pensions could have been sustainable had it not been for four things:

1) employers taking 'pension holidays' when the funds were (very temporarily) in surplus
2) government legislation to tax dividends in pension funds
3) new accounting rules forcing companies to declare pension deficits on the balance sheet
4) employers being allowed to place most pension funds in high-risk and unpredictable investments (e.g. stockmarket funds)

All of which are eminently sensible and financiall prudent moves.

The key one, of course, is number three. They are real liabilities; how on earth can they not be shown on the balance sheet?

As an argument for sustainability, these objections are pretty weak.

marklv

"As an argument for sustainability, these objections are pretty weak."

No, not weak at all. They are all practical and logical. If previous governments had bothered to police company pensions properly the current problems would never have arisen, but 'laissez faire' capitalism frowns on financial policing, doesn't it? I think this started off in the Thatcher era and only got worse, even with Blair - the liberal conservative pretending to be Labour.

"The key one, of course, is number three. They are real liabilities; how on earth can they not be shown on the balance sheet?"

I don't know the full details, and I am not an accountant, but I do know that sometime in the last few years the accounting rules changed with regard to pension liabilities, forcing companies to increase what they needed to set aside as security for these liabilities.

bendix

marklv wrote: »

I don't know the full details, and I am not an accountant, but I do know that sometime in the last few years the accounting rules changed with regard to pension liabilities, forcing companies to increase what they needed to set aside as security for these liabilities.

Perhaps because they are, in fact, real liabilities and should be accounted for.

Bringing them out to the open was the right thing to do, and rightly exposed how financially crippling they are to private sector employers. They are an anachronism forced onto companies by the union power of the 50s, 60s, and 70s, when the world was fundamentally different.

Of course, the public sector remains union-dominated and cloistered firmly in the 60s and 70s. And, naturally, they arent financially accountable because their resources can be topped up by the taxpayer.

Ergo, final salary pensions remain.

Anyway, I'm bored now. And, besides, I've got to go to do some work to earn some money to pay some taxes to pay for your pension.

A thanks would be nice.

marklv

"Perhaps because they are, in fact, real liabilities and should be accounted for.

Bringing them out to the open was the right thing to do, and rightly exposed how financially crippling they are to private sector employers. They are an anachronism forced onto companies by the union power of the 50s, 60s, and 70s, when the world was fundamentally different.
Perhaps because they are, in fact, real liabilities and should be accounted for."

Keep reading the Daily Mail - you're obviously totally brainwashed.

Trade unions existed to protect employees from abuse by ruthless employers - it's sad but true that this problem still hasn't gone away, even for white collar workers. What is different now is that people now are fundamentally more individualistic and selfish than in the post-war years when there was still a belief in a 'social contract' for the nation. This is why unions have largely died out in the private sector. Employees in the private sector have meekly accepted the destruction of their pension rights without so much as a whimper; at least in the old days there would have been strikes, but union membership is now so low in the private sector that nobody even cares any more. Well, in that case they deserve all they get.

novice-saver

I'll put the pop-corn down now, and add my 2p worth.

How about arguing that the private sector pensions have been destroyed (by a combination of !!!!-up and Gordon's greed), and the ensuing wreckage is going to be used to dismantle the unaffordable public sector pensions?

I can't see the private sector supporting a public sector with better benefits than they can afford for themselves.


P.S. the swear filter missing word is a male hen