Rhetoric media on state gold plated pensions

jimi_man

JoeCrystal said:

jimi_man said:

That will change next year with the introduction of ETIAS. Also it's fair to say that the policy is more due to the intractability of the EU rather than the UK. We allow Europeans (in fact 39 other countries) to use our e-gates with no stamps required and have much more generous immigration rules - the same is not true of European countries. 

Yeah, I am painfully aware of that! I edited my comment to include that as well.

It will only worsen once they introduce biometric checks, which means they must collect your facial photo and fingerprints when entering the EU. It is okay if you are in the airport and doing it one by one, but if you got a whole coach or a family car in the ports, you would need to get everyone out and take their details which will delay the process—a photo of your face and four fingerprints as a minimum. 

And, of course, don't forget about getting ETIAS filled out with all that information you need to supply, from medical conditions to criminal records. If any EU country doesn't particularly like you, it will fail, and you will have a chance to appeal to the EU country directly even though you are entering a different EU country altogether. 

But hey, that what the people voted for. You can tell that I am still bitter!

Again, as I said the EU has been particularly petty and bloody minded in their approach to immigration, though I do get that this is contrary to what's reported in the media.

However in relation to biometrics, this is no different to most other countries in the world. I've been giving them for many years travelling outside of Europe. We demand biometrics (photos) for everyone entering the UK, irrespective of their nationality and fingerprints of many countries.

Tbh  the ETIAS isn't really any different to the ESTA scheme. 

As to the EU policy of a particular country rejecting you even though you want to visit another country, I'd say that this is very much an EU failing rather than a UK failing!

jimi_man

The gold plated pension aspect is rather difficult for me. On the one hand I can see the 'considerable' expense by the tax payer, in a time where a squeeze is coming. On the other hand I have been a recipient of a what would probably be termed reasonably gold plated pension. I've been in receipt of it since I retired (from that employment) when I was 51 and it's uncapped CPI. It's around £32k and I paid into it for 30 years. I do appreciate that it's pretty valuable, and at the moment I'm extremely thankful that it's uncapped. I have a Civil Service pension (Career Average) that's nowhere near as valuable, though that is also uncapped.

(One aspect that I hadn't considered is that with two years of these inflationary rises on both pensions, plus on my state pension when I get it, coupled with the freeze on tax thresholds, may push me into the 40% tax bracket slightly which I also appreciate is a rather niche problem.)

In principle I was in agreement with the public sector pension changes, though it could be seen as rather 'I'm alright Jack'.

I don't know what the answer is. 

zagfles

QrizB said:

zagfles said:

Re GBP, it's really the whole of Europe, the EUR has collapsed as much. GBP is higher against the EUR than it was 5 years ago.

But a lot lower than it was seven years ago. It's almost as though the UK did something immensely harmful in the spring of 2016 and had never recovered.

Well, indeed. But recent events have affected the EUR as much as GBP. At the moment the EUR has plummetted to parity with the USD, something not seen for 20 years.

zagfles

JoeCrystal said:

QrizB said:

But a lot lower than it was seven years ago. It's almost as though the UK did something immensely harmful in the spring of 2016 and had never recovered.

Ah yes, the greatest mistake that the "people" have ever made in this country, in my view. I fear it will only worsen in the coming years and decades. I still get annoyed having to ensure that my passport gets stamped when entering and leaving the countries. The last airport I went to was in Copenhagen earlier this year, and I was told I needed to ensure that my passport got stamped when leaving! I was thankful for a reminder since one can walk directly from the security area to the gate without going through passport control in that airport.  

You've always had to go through passport control when leaving a Schengen country for the UK, even when we were in the EU, the only difference is now they're stamping passports. I distinctly remember going through passport control at Copenhagen when flying to Manchester in 2019, because I was late and at risk of missing my flight, there was one person in front of me and they were taking what seemed like ages! Just made the flight.

All the Schengen airports I've flown from have a separate gate section for flights to non Schengen countries including the UK, and passport control to enter that section. Surely Schengen haven't (like the UK) stopped exit checks?

AlanP_2

SouthCoastBoy said:

I was attempting, and most probably failed, to illustrate that the private sector will have stricter criteria than the public sector when applying the carry over rules and the impact it has on productivity (which as a nation is very low), In my case I had until June 2021, and only allowed to carry 10 days over, in the example of the public sector worker I know, he could carry over days until June 2023. He is does not work in healthcare or any other frontline services, he has an office job at county hall.

So did I, and like many of my colleagues I was soon working all the hours in the day and weekends getting the initial vaccination centres setup with a couple of days notice from central government, setting up the process for key workers in care sector to book appointments, sourcing and distributing PPE to care homes, implementing the business loans and grants schemes as well as helping sheltering / vulnerable people to get medicines and food.

That's just some of the stuff I can recall off the top of my head. Others will have done other things as part of a massive effort by the public sector across all branches, roles and grades.

In the meantime the rest of the staff are covering for us as people still want to carry out BaU tasks with their councils etc.

No overtime for most of us, it was goodwill and desire to serve and help our local population.

Leave was a far off dream for that period.

Altior

jimi_man said:

The gold plated pension aspect is rather difficult for me. On the one hand I can see the 'considerable' expense by the tax payer, in a time where a squeeze is coming. On the other hand I have been a recipient of a what would probably be termed reasonably gold plated pension. I've been in receipt of it since I retired (from that employment) when I was 51 and it's uncapped CPI. It's around £32k and I paid into it for 30 years. I do appreciate that it's pretty valuable, and at the moment I'm extremely thankful that it's uncapped. I have a Civil Service pension (Career Average) that's nowhere near as valuable, though that is also uncapped.

(One aspect that I hadn't considered is that with two years of these inflationary rises on both pensions, plus on my state pension when I get it, coupled with the freeze on tax thresholds, may push me into the 40% tax bracket slightly which I also appreciate is a rather niche problem.)

In principle I was in agreement with the public sector pension changes, though it could be seen as rather 'I'm alright Jack'.

I don't know what the answer is. 

Well public sector pensions are a relic of a bygone era. Obviously many people expect to live well into their dotage nowadays, especially many civil service retirees, whom were button pushers (I am also a button pusher).

It has been far too slow, but changes have been made to state pension ages and gender alignment, which of course will inevitably be pushed further out.

The higher echelons of the public sector/establishment makes decisions about itself. They are all happy that the (bloated) HoL attendees get over £300 a day tax free for signing in, as to a man they all have designs on a seat on the gravy train. Turkeys don't vote for Xmas so it won't be changing in a big way any time soon. Akin to fat cats on boards, I'll scratch your back, you can scratch mine. 

As far as I can see, very little has been done to ensure public sector pensions reflect the reality of living in the 21st century.

There is no resentfulness or bitterness from me, I could get a job in the public sector and benefit from the pension arrangements. If all I cared about was enjoying a good pension and stopping work early in my life, that's probably what I would do. 

gm0

There are alternatives to the necessary ongoing slow strangulation of DB schemes and their replacement with the much less attractive individual DC. 

But the alternates are hard to get to and require serious politicians (both sides together) to take a very long term perspective and forgo the pleasures of artificial hyperbole over tiny policy difference meanwhile.  

Sell a better solution to us convincingly.  And implement competently. As with social care funding a studious commission may be needed first to give the issues a good airing and give the politicians something workable in aggregate to chew on. 
It's not a good subject to play soundbite pick n mix policy design on and hope to get something sane at the end. 

Are they even capable of complex decisions and tradeoffs ? Parliament's pitiful and shambolic performance 2016-19 says that they are not.  So all that follows here is likely a pipedream

Based on what we know from the last century.  A well designed employment linked pension saving scheme should capture its full future liabilities at the time the work associated is done.  Needs change. Profits change. Companies cease to be relevant and cease.  Public sector needs move on with technology and a changing society. Old jobs are reduced in number spending reprioritised to something more worthwhile for the future. Whither the buggy whip manufacturers now.  New jobs replace the lost employment.  With inputs fixed at the time there is no nasty smell from the long ago employment years hanging over future budgets. Nor a moral hazard for politiicans to appease client voter groups today issuing bills to our future children. Usually for favoured insider groups such as themselves (MPs), judges, senior doctors etc.  Old pensions contributions linked to employment should not spring a surprise on the future because of unrelated healthcare advances to longevity or other financial shocks. Adequacy of pensions saved alongside state pension is a welfare policy issue at the time (all the time). 

Just end remaining unfunded DB indexed accrual where the bill is PAYG on the way out and replace those pensions for new accrual.  Do it now - at the next employment contract review cycle.  The first rule of pulling bodies out which fell into a river successfully is to start by stopping pushing them in.

Is the future DC ? - There are better than individual DC models we could go for.  All have their advantages and drawbacks

You could solve or mitigate many of the problems with DC - an unknown death date (longevity risk), retirement date v markets  (sequence risk) (another thing you don't control from your age cohort), your smaller investment time scale and horizon.
And yet a national pooled DC scheme could still have the fundamentally great DC property of fixed at the time inputs. 

Outcomes would depend upon those inputs - contributions, transfers in.  And to heavily smoothed pooled investment returns as with national wealth funds (Norway oil etc). In this world DB is just gone.  Something inbetween but better than individual DC drawdown remains as the core national scheme.  Netherlands, Nordics and some others have individual parts. 

Transition

DB entitlement is one time converted into a pooled DC pot value and then thrives (or doesn't) with everybody else. 
DC pot value transfers in at pot value then behaves the same.
Transfer out is wrapped with disincentives to eliminate gaming of the ability to be out and in system.
Disincentives are gradually added to the residual old system or it is just starved by not uprating various thresholds.  Until it withers completely.

Compulsion

Politically those who would be raided the most to create cross subsidy within such a system vs pure individual DC would entirely rationally opt out if this possibility remains open. So it is politically extra tough to get to this as it likely involves effective compulsion like the USA health insurance extending coverage controversy. 

And if you don't compel.  Adverse selection makes the scheme less effective and ultimately less generous as the "to be raided" money stays away from death pooling and returns and sequence pooling.  Preferring to keep their returns and self insure their risks in their pool of one.  Modelling that financially would reveal how much it matters in aggregate. It may be more symbolic and political in importance i.e. that it be one scheme inclusive for all.  Not business as usual (current system) for an insider metropolitan elite professional and managerial group.  And a prole scheme over here to be setup and then raided and diminished as that same elite that doesn't use it may decide to do in future.  People are not attentive to pensions but not stupid enough to fall for that.

A national scheme with "group DC" with cohort (sequence) and deathpool (longevity) smoothing and some guaranteed income with some "with profits" investment return income on top.  Better properties than DC to the individual.  Known inputs.  Low management costs (big pool of money, investment and fund management delayered and competition for large pool with what remains).

Implementation

Pilot. Get employers on it. Bulk it up.  Get the public sector on it.  Stop accrual and run off unfunded DB.  Funded DB just needs running properly but fold it in anyway to make the single future scheme inclusive and society wide - horizontally fair. 
Start with MPs and Judges.  And doctors.  And senior civil servants. Then roll on down.  And incentivise employers and compel the mass of employer DC aboard.  Sequence implementation to taste and practicality. 

Side effect - it destroys a chunk of the retail financial services product mix and some advice around it.  So another win there bar their corporation and income tax take

Traps

Avoid any ongoing transitional rulesets that depend upon what you "used to be in".  The rules now are about the pot and its behaviour and the income you get from it. The investment return from pooled investments smoothed and applied to create income streams for all the different pots.  At most do a scheme specific one time calculation of the "pot" at transition.
Then you and everyone else is on the same bus.  No ex members of anything with special extra rules.  Bribe with a bit more of our money if you must.  Do it at the the time e.g. for GARs or certain DB scenarios

No backward looking gold plated index linked promises of any kind remain linked back to salary. Nobody is accruing in such a scheme.  Existing scheme promises are transferred in, or kept and run off (with a stingy approach taken thereafter to any future decisions around uprating).  Or migrated at a one time value sufficient to make that actuarially fair dealing at that date.  And that is it.  DC pots have a known value.

SIPPs disappear to a wealthy few international tax domiciles and are ultimately regulated away for others here who essentially have to use the national scheme for UK domiciled investments

Inheritance of private pensions disappears (or is aggressively tapered with age) within the scheme.  Like an annuity or marginally softened in the political horse trading.  Spouse rules (a single compromise version of transfer of entitlement within generation at first death) is needed.  As this varies now this can generate winners/losers and is an awkward corner of the design unless you level it up.

Such a Group DC / "Defined Ambition" scheme combines protection for the individual on retirement income for many risks with "known at the time" inputs for the employer (public or private).  The person in the street doesn't need to learn to run 40 years of drawdown portfolio investment.  And is thus an excellent combination for a pension scheme design

Costs are pushed down by managing large pooled investment (like a national wealth fund).

The conclusion of an earlier House of Lords study pack on this subject was that it was indeed possible to construct something from international examples better than what we currently have and are on course towards.
It was also close to impossible to get to it from here.

As it requires many things we don't have in place

Stable cross party political consensus on the need for and shape of "better" vs feeding preferred party voter constituencies a bone. They both do it. DB/DC ding dong to please "our voters" and divide and rule is more politically salient.

A crisis sufficient to enable compulsion to be realistically in play.  (Not yet).

Public acceptance of cross subsidy within the design (early death pays for late, lucky cohort pays some investment return withheld to unlucky (sequence) - (This is a possible to sell but a big communications job - some would understand the communitarian logic of it and agree with the risk pooling concepts. Others of a more libertarian persuasion would not be persuaded.  Representative democracy would need to sort that out.

Public trust in the government to establish and govern such a scheme without shady dealing (entirely absent)

Acceptance of loss of decent % of private pension inheritance (to get the longevity pooling)

Trust in the system and its governance that the funds are not raided and terms not be tweaked to suit a government of the days short term deficit needs or fashionable "investment" priorities (mislabelling partisan current spending ideas as "strategic investments" infrastructure or a magical industrial policy unlocking productivity.

Strong separation of funds and rules against all raids via independence of the structure within broad parameters set.  (A mountain to climb to create and sustain credibility of a truly independent scheme with government oversight run in a way that the government guarantee under it is never needed and what people get is not a short term political lever available to be pulled.

So in fact it looks like we are stuck with DC and the slow strangulation of remaining DB
And arguing about the winners and losers of it.

If interested the westminster libraries have the briefing packs on these various policy studies online

hyubh

Altior said:

Well public sector pensions are a relic of a bygone era. Obviously many people expect to live well into their dotage nowadays, especially many civil service retirees 

That's what higher NPAs are for though...?

It has been far too slow, but changes have been made to state pension ages and gender alignment, which of course will inevitably be pushed further out.

Public sector pension schemes, in general, didn't discriminate by sex in the first place - so Barber equalisation in the 90s wasn't a thing for them.

The higher echelons of the public sector/establishment makes decisions about itself.

Contemporary public sector schemes are biased towards the low paid members! CARE yet contribution rates banded by salary.

Altior

MPs are earning pension benefits worth more than £40,000 a year on top of their £82,000 salary.

Documents seen by The Times show that the cost of paying the benefits built up in their pension is equivalent to 53 per cent of their salary.

This means that while an MP’s salary is £81,932, the total pay and pension benefit is closer to £125,350. Like all public sector employees, MPs receive a guaranteed retirement income from a defined benefit pension scheme — a generous agreement that has all but disappeared from the private sector.

So they get a pension benefit that is equivalent to more than most peoples' entire salary. Do you envisage them voting to reverse this any time soon?

The gender point was to highlight the changes that have been made in legislation to reflect life as it is in the modern age. Not in direct reference to public sector pensions. Granted, there is a correlation as the future taxpayer is still in the tank for both. 

Employees within 10 years of receiving their civil service pension remained in their legacy scheme. The majority of these have a retirement age of 60 and, for long tenure employees, this may provide sufficient income for full retirement, if desired.

People on here will know more about the detail of civil service pensions than me, but I believe this means that there are still button pushers who can leave at age 60 on full whack, as of now. 

In my opinion they should all have migrated away from indefinite liabilities when the private sector realised it was an inevitability. Or receive lower salaries in exchange for the raft of other benefits that come with working for the state. There's some data in the news today that apparently shows the hard working GPs of this country won't be too concerned with any spike in their personal domestic fuel bills this winter!

Andy_L

Altior said:

jimi_man said:

The gold plated pension aspect is rather difficult for me. On the one hand I can see the 'considerable' expense by the tax payer, in a time where a squeeze is coming. On the other hand I have been a recipient of a what would probably be termed reasonably gold plated pension. I've been in receipt of it since I retired (from that employment) when I was 51 and it's uncapped CPI. It's around £32k and I paid into it for 30 years. I do appreciate that it's pretty valuable, and at the moment I'm extremely thankful that it's uncapped. I have a Civil Service pension (Career Average) that's nowhere near as valuable, though that is also uncapped.

(One aspect that I hadn't considered is that with two years of these inflationary rises on both pensions, plus on my state pension when I get it, coupled with the freeze on tax thresholds, may push me into the 40% tax bracket slightly which I also appreciate is a rather niche problem.)

In principle I was in agreement with the public sector pension changes, though it could be seen as rather 'I'm alright Jack'.

I don't know what the answer is. 

Well public sector pensions are a relic of a bygone era. Obviously many people expect to live well into their dotage nowadays, especially many civil service retirees, whom were button pushers (I am also a button pusher).

It has been far too slow, but changes have been made to state pension ages and gender alignment, which of course will inevitably be pushed further out.

The higher echelons of the public sector/establishment makes decisions about itself. They are all happy that the (bloated) HoL attendees get over £300 a day tax free for signing in, as to a man they all have designs on a seat on the gravy train. Turkeys don't vote for Xmas so it won't be changing in a big way any time soon. Akin to fat cats on boards, I'll scratch your back, you can scratch mine. 

As far as I can see, very little has been done to ensure public sector pensions reflect the reality of living in the 21st century.

There is no resentfulness or bitterness from me, I could get a job in the public sector and benefit from the pension arrangements. If all I cared about was enjoying a good pension and stopping work early in my life, that's probably what I would do. 

Would you rather pay them a salary & expenses instead?