Abuse of final salary pension schemes?

Tromking

hyubh wrote: »

Envy is an ugly thing. I thought you were back on an even keel, but no... no-nothing ranting returns. Goodbye, because I'm out.

Indeed.
Another thread that ends up being a proxy for a general whinge about PS pensions it seems.
This Government and previous ones have future proofed long term pension liabilities by ending final salary schemes and shifting those like me already on them onto a career average scheme until they finish, but they now have another problem of course with staff retention and are reluctant to pay pensionable allowances or even contemplate regional pay in hard to recruit areas of the country, probably in an effort to stop people like me with considerable 'banked' years in a final salary scheme from gaming the system and opting to work in the smoke for a year or so at the end of my career.
They've got themselves into a bit of high dudgeon really.

Parking_Trouble

Tromking wrote: »

Indeed.
Another thread that ends up being a proxy for a general whinge about PS pensions it seems.

Well looking at the thread it's about abuse of FS schemes.
Absolutely a chance to whinge about PS schemes and test whether people think there is abuse of those schemes.

Not just public sector I might add, I am in a bank scheme that was Final Salary.

BobQ

Parking_Trouble wrote: »

Classic case for having average salaries to reduce pressure.

But its precisely the reason CARE schemes were introduced.

Tarama

I am afraid I am flummoxed by this 'discussion, the direction of which I find rather odd. As someone who knows little about the financial underpinnings of USS I thought this thread would help with this - not so. Also I am a concerned member of USS and I do not recognize the majority of the 'points' here as part of my or my colleagues's experiences.

Thus could this thread perhaps begin to discuss the reasons for and USS's response to this news, instead perhaps?

Tammykitty

phillw wrote: »

Common accepted abuse.

It also effectively forced people to stay full time, where many people coming up to retirement would actually like to reduce hours.


There was positives and negatives to final salary schemes

Tromking

turnupforthebooks wrote: »

It's not envy. Why would any right-thinker be envious of deviousness of a kind similar to the thinking that many put behind putting in inflated insurance claims? I.e. it is supposedly victimless? No, not envy. It is indeed high dudgeon that posters like me are feeling i.e. its is anger and resentment we feel as straightforward taxpayers during our careers at having (it turns out) been taken for a ride by uncontrolled unscrupulous gamers calling themselves civil servants who consider their own ends to be greater than the country they purport to serve in their chosen careers. Brilliant. Because UK is painted as something better than that, but on the strength of this thread, it seems it never was, then perhaps the Greek way is almost respectable, and maybe even the average public servant in Venezuela is more honest than in UK?

Still think it's smacks of envy.
I don't see why you would expect a level of unselfishness from one set of workers, yet be relaxed about others. My employer happens to be tax payer funded and sets it remuneration at a level to attract people to carry out sometimes quite stressful tasks, my atittude to my remuneration is the same as everyone else, I'm not motivated by a sense of altruism just because I work for a public service!
You should be comforted however that thanks to PS pension reform, the 'loophole' you talk of has largely been closed now, although recruitment and retention has plummeted as result of that and extended wage restraint of course.

BobQ

turnupforthebooks wrote: »

No, you have not explored the sort of rinky-dinks that were collectively bargained right up until 2004 - the extremely loose regulation of private sector pension schemes and wind ups pervaded right through the 90s and beyond (to mid 2004 at least). I'd say it actually reached a crescendo in the early noughties not the opposite as you suggest.

This debate ignores the bigger picture.

It should not be about public versus private. It should be about the way employers have systematically reduced pensions for everyone. There are still some DB Pensions available to the wealthy and employees who are organised in trade unions have had more success in protecting pensions than those who are not.

As good as public sector pensions are at present they have progressively been attacked through reducing benefits and higher contribution rates. They will probably be reduced again by conversion to DC schemes and reduced employer contributions. Now I can see why those who have legal minimum DC schemes or are low paid self-employed without a pension have no sympathy with this situation but there is a bigger picture.

Ever since Thatcher's Government allowed private sector employers to underfund DB pensions they were in trouble, despite them previously being viable. As employers took holidays and it became all so easy to propagate the myth that they were unaffordable. DC schemes became "popular" not because of affordability but because it became cheaper for employers.

The following link is an excellent summary of the confidence trick inflicted on working people.

http://uk.businessinsider.com/defined-benefit-pension-transfer-wealth-from-workers-to-companies-2016-8

The issue is not DB vs DC but whether Governments are prepared to make employers fund DC schemes sufficiently to provide people with adequate security in retirement. Note in particular that:

"Companies pay five times more in dividends to shareholders than they make in pension investments"

Of course there is another pattern here. From the 1980s, people realised that they did not need trade unions to protect them from employers. They have now reaped what they sowed since those that have retained the better pensions for longer are those with higher trade union membership.

There is nothing inherently wrong with a DC pension that proper funding by employers and employees would not solve. Note that in Australia, the state operated pension scheme is DC and employers are required to contribute 9.5% to it and that is planned to rise. If UK employers were to contribute 9% and employees 9% then people would retire with much more pension.

The next con trick to be perpetrated is that the NHS is unaffordable. The issue is simply one of deciding as a nation that we want to fund it.

BobQ

Parking_Trouble wrote: »

I guess what used to be accepted practice, working within Final Salary scheme rules has been rife in the public sector for decades. .

How old does someone need to be before they should not be allowed to apply for a better job? Should we say that anyone reaching 50 should be banned from progressing?

BobQ

phillw wrote: »

Common accepted abuse.

How common was it though? This is just taking a few instances and claiming the practice was common. I agree it probably happened occasionally in some places but does it make it widespread.

As Parking Troubles says there is nothing wrong with someone applying for promotion now or then. Except now the potential benefits are less.

BobQ

Tarama wrote: »

I am afraid I am flummoxed by this 'discussion, the direction of which I find rather odd. As someone who knows little about the financial underpinnings of USS I thought this thread would help with this - not so. Also I am a concerned member of USS and I do not recognize the majority of the 'points' here as part of my or my colleagues's experiences.

Thus could this thread perhaps begin to discuss the reasons for and USS's response to this news, instead perhaps?

You are right. Problem is that the nature of the topic encourages people to have a go at public pensions and others to react.

Most of us do not know much about the USS other than it has a fund and that on the face of it the Trustees made some bad decisions. Ultimately I imagine that if things do not improve they will have to increase contributions.

What should not be allowed to happen is for the current generation of students to pay more in tuition fees to help the universities fund the shortfall.



https://www.ipe.com/countries/uk/uss-returns-cost-saving-overshadowed-by-deficit-increase/10020084.article