Public Sector Pension Strikes – A JOKE !

Andy_L

Gracchus_Babeuf wrote: »

Very interesting point. Personallly I am puzzled as to why the government hasn't gone the whole way and introduced money puchase pensions for the whole public sector. The savings could then be invested in improving the state pension - this would be fairer to everybody. Why can't all those Oxbridge educated mandarins milling around the Chancellor grasp this simple concept?

2 main reasons
1. It increases the short/medium term costs as the contributions that are currently being used to pay pensions have to be invested instead & democracy is very poor at "short term pain for long term gain" trade offs

2. You would end up with the public sector pension funds being the biggest share holder in the country with a risk that that either distorts political dicision making and/or politicians try & use that sharholding to distort the economy for political/dogmatic reasons

CLAPTON

Gracchus_Babeuf wrote: »

Very interesting point. Personallly I am puzzled as to why the government hasn't gone the whole way and introduced money puchase pensions for the whole public sector. The savings could then be invested in improving the state pension - this would be fairer to everybody. Why can't all those Oxbridge educated mandarins milling around the Chancellor grasp this simple concept?

how would money purchase systems help the government?

It would be a massive cost and would destroy the economy as they would have to continue funding the present pensioners and put funds away for future pensioners too whereas now they are only funding the present lot.

Gracchus_Babeuf

Andy_L wrote: »

2 main reasons
1. It increases the short/medium term costs as the contributions that are currently being used to pay pensions have to be invested instead & democracy is very poor at "short term pain for long term gain" trade offs

Maybe, but the long term gains are substantial, and the social stability gains likewise, as people have greater certainty of security in old age. Naturally there would have to be cross-party agreement to rigidly ringfence state pension funds, but it can be done.

Andy_L wrote: »

2. You would end up with the public sector pension funds being the biggest share holder in the country with a risk that that either distorts political dicision making and/or politicians try & use that sharholding to distort the economy for political/dogmatic reasons

What distortion do you mean? Why should pension funds distort the economy? And the funds would not necessarily be invested in share only but in a wide basket of different vehicles.

dshart

Gracchus_Babeuf wrote: »

I agree 100%. If the government offered a basic state pension of £210 a week as opposed to £105, most people would not mind waiting until 67 to claim it, because then they could focus on saving enough money to cover them for the missing years between their chosen retirement age and the government one - and maybe have some funds left to supplement the state pension.

Although I agree with the idea to a certain extent of having more generous state pensions funded by higher taxes and less requirement for public or private sector pensions except for topping up retirement income. The problem I can see is there is a huge number of people who already work the system of benefits without ever paying anything into it and these people would again be the people to gain most from such a system and it would give them even less reason to do anything but live off the state from birth to death.

Gracchus_Babeuf

CLAPTON wrote: »

how would money purchase systems help the government?

It would be a massive cost and would destroy the economy as they would have to continue funding the present pensioners and put funds away for future pensioners too whereas now they are only funding the present lot.

What massive cost? If public sector workers were treated like private sector ones and the government contributed a fixed amount, e.g. 12% of salary, to their pension funds, it would mean that the investment risk of salary based pensions would no longer fall on government shoulders. And as for the state pension, people could be asked to pay higher NI contributions to receive a bigger state pension - seems fair to me.

Gracchus_Babeuf

dshart wrote: »

Although I agree with the idea to a certain extent of having more generous state pensions funded by higher taxes and less requirement for public or private sector pensions except for topping up retirement income. The problem I can see is there is a huge number of people who already work the system of benefits without ever paying anything into it and these people would again be the people to gain most from such a system and it would give them even less reason to do anything but live off the state from birth to death.

So you would prefer for unfortunate people to live in cardboard boxes on the streets? What would this solve? The issue is not people 'working the system' but to have a pensions system that provides for all and ensures that no pensioner lives in poverty. This is worth fighting for.

atush

worldwheeler wrote: »

This is surely, the banks lent to people who could not repay. The banks should have held responsibility, and the hit, for this practice. After all when you go to borrow the risk is on the lender as they are the financial experts. Or, lots of tyre fitters, shelf stackers, teachers, secretaries, ect walked into banks and bamboozled financial experts into leading them £400,000+ for a house. The 84% of RBS the tax payers own is purely the toxic assets that will not be recouped let alone pay any profit. This has been a massive theft from the people of lots and lots of countries of the world to the benefit of the people who run and control the entire system.

Research: where does money come from? who owns a country's central bank? what is fractional reserve banking? what, or who, controls the "business cycle"?

Well they did pay for it. The NR Bank went bust so the top guys had to leave, and the shareholders lost every penny. Some regular employees lost their jobs, some kept them and work there today. The new shareholders are the govt/taxpayers.

What you need to ask is who from the govt is looking over the board members shoulders to check they are making the right decisions? I know alot of the performace based incentives were to get the good part of NR in a saleable condition.

We still own the Bad Bank part of NR which I believe at this time is operating at a profit as those who own the assets are slowing paying off their loans.

dshart

Gracchus_Babeuf wrote: »

So you would prefer for unfortunate people to live in cardboard boxes on the streets? What would this solve? The issue is not people 'working the system' but to have a pensions system that provides for all and ensures that no pensioner lives in poverty. This is worth fighting for.

Part of the problem with a welfare state is that if the welfare conditions become too generous then it removes the incentive to work.

I have great sympathy for anyone who finds themselves out of work and has to live on the breadline and are desperately seeking any sort of employment but cannot find any. But we all know of too many people who have never done a days work in their lives and milk the system for every penny they can and live better than some hard working people.

The current state pension may be poor but it gives people the incentive to make provision for their own retirement, whether it be in a public sector, private sector or private pension scheme or any other investment vehicle that will provide additional income in their old age.

NAR

dshart wrote: »

Because that's the new retirement age. You could just as easily ask why should they live longer than was originally anticipated?

And remember they do not have to work the additional time, people can retire whenever they want it just means their pensions are adjusted accordingly or they may have to wait however many years to be able to take their pension.

Which is an IMPOSED change to their Contract of Service, which is why so many are on strike today!

CLAPTON

Gracchus_Babeuf wrote: »

What massive cost? If public sector workers were treated like private sector ones and the government contributed a fixed amount, e.g. 12% of salary, to their pension funds, it would mean that the investment risk of salary based pensions would no longer fall on government shoulders. And as for the state pension, people could be asked to pay higher NI contributions to receive a bigger state pension - seems fair to me.

currently, state sector workers (except local government) contribute their 6.5% pension contributions back to the state as do their 'employers' contribute their 12% back to the state.

this money is used for general government spending including current state pensioners

if instead, the state paid 6.5% plus 12% into pension funds then it would have a black whole in its finances which would need to be filled by extra taxation