London road closures - Thursday 30th June

raymondo60

Wrath Rob wrote:

People are living longer. The population is aging. To avoid a massive national pension deficit in 15-25 years time, which would cause a huge increase in the portion of tax spent on paying public sector pensions and hence lack of spending on services such as health, education, welfare etc, people need to take some personal responsibility which means either starting to make your own pension investments, increase current ones or work longer.

As above - we have to deal with what's actually happening in our society. The reality is that, when State Pensions were introduced in the 1920's, the ratio of taxpayers to recipients was 9 to 1 - that 's 9 workers to 1 pensioner. The ratio today is nearer 3 to 1 and is projected to go down to 2 to 1 by 2050. Those numbers are just not sustainable and no amount of srtiking, protesting or denying will help. We're all in this together - private and public sector workers. There has to be a solution or we'll all be living in Greece very soon!

W1

Headhuunter wrote:

I understand completely that people are living longer and essentially, retirement ages haven't been realigned in decades however I can understand their frustration. This re evaluation of public sector pensions seems borne of an economic catastrophe brought about by the private sector, notably banks, which has then obliged the public sector to step in to pick up the pieces. I work with bankers, I headhunt them day in and day out and although there have been massive headcount reductions in the investment banking sector since 2008, banks and bankers generally appear to have "got off lightly", whilst the public sector continues to pick up some of the slack. The best paid bankers now pay a bit more tax on the top level of pay, which they whinged long and hard about, threatening to move to Geneva or Asia etc etc, but otherwise, they're still paid well and continue to receive bonuses.

Although I agree that public sector pensions need some reviewing, I can understand where the anger comes from...

Is it though? Or is that what the media want people to believe?

We were due a massive recalibration of public sector expenditure and pensions. It had to happen at some stage. It may have been catalysed by the global eceonomic picture (which cannot be blamed solely on bankers - a significant proportion of the blame must go to those who borrow as much as those who recklessly lend. not to mention regulations AKA the public sector and government), but to say it was "caused" by bankers is misleading. Frankly the gravy train is over - it's easier to say that in a recession than during a boom. This was coming, and has been for years. The public sector need to realise that the taxpayer is not going to subsidise their retirement - and to demand so is certainly not "fair" (a word that is bandied about only by those who think they're being hard done by, when they often are not - see less hours, more time off, bigger pensions, better pay etc compared to the private sector - google is your friend).

t4tomo

when I started work, virtually every decent employer offered a defined benefit pension scheme. I don't think there is an employer left in the private sector who would offer a defined benefit scheme now to a new started, and most have phsed them out even to existing staff, its a defined contribution to a PPP or similar now.

A decade or so later the public sector is catching up with that reality check and suddenly the troops are revolting.

Whilst it might not be "fair", its reality, its happening and a day of protest will do nothing to stop it. If people leave in droves for the private sector, then they will have to increase pay / other benefits to compensate to attract and retain decent staff, but given the state of the economy, that won't happen in the short term.

Paul E

Sketchley wrote:

I can see one helicopter from here. Are the teachers revolting?

Some of the teachers at my schools were quite revolting, including one that looked like he never washed his hair or his clothes

W1

t4tomo wrote:

If people leave in droves for the private sector, .

They won't, because they know what a good deal they already have.....

HamishD

Whilst I certainly feel empathy for those striking,



That is all

Wrath Rob

All the financial crisis has done is to bring forwards the inevitable be a few years. This was always going to happen given the social factors. Personally I'd rather get this over with now and move on than delay the inevitable and have a worse situation a few years down the line

snailracer

W1 wrote:

t4tomo wrote:

If people leave in droves for the private sector, .

They won't, because they know what a good deal they already have.....

Well if that is true, those in the private sector who are complaining are free to try and get a cushy job in the public sector, no?

snailracer

t4tomo wrote:

when I started work, virtually every decent employer offered a defined benefit pension scheme. I don't think there is an employer left in the private sector who would offer a defined benefit scheme now to a new started, and most have phsed them out even to existing staff, its a defined contribution to a PPP or similar now.
...

Private sector defined contribution schemes are largely outsourced to private pension provider companies, who borrow the money you put in over your working life, invest it on your behalf and, when you retire, pay it back to you with the profits (less charges).

Public sector pensions do not operate like that – the government does not “invest” contributions from public sector employees or manage them throughout the employee’s working life, so trying to apply the same “investment” logic is completely invalid. The “affordability” of public sector pension depends entirely on government cashflow at the time the pension is paid, and no-one can predict government finances in the future.

Bottom line is, comparing public and private pension provision is misleading. It is akin to criticising footballers for not scoring enough goals, compared to cricketers scoring runs.

snailracer

Headhuunter wrote:

...
I understand completely that people are living longer and essentially, retirement ages haven't been realigned in decades however I can understand their frustration. This re evaluation of public sector pensions seems borne of an economic catastrophe brought about by the private sector, notably banks, which has then obliged the public sector to step in to pick up the pieces. I work with bankers, I headhunt them day in and day out and although there have been massive headcount reductions in the investment banking sector since 2008, banks and bankers generally appear to have "got off lightly", whilst the public sector continues to pick up some of the slack. The best paid bankers now pay a bit more tax on the top level of pay, which they whinged long and hard about, threatening to move to Geneva or Asia etc etc, but otherwise, they're still paid well and continue to receive bonuses.

Although I agree that public sector pensions need some reviewing, I can understand where the anger comes from...

So it appears private sector pensions are not keeping up with public sector ones. I would say that’s because private sector pensions are currently underperforming - hardly surprising given the same class of overpaid and unaccountable financial cowboys/pirates who screwed up the world economy remains strongly associated with the private pensions business.

t4tomo

snailracer wrote:

t4tomo wrote:

when I started work, virtually every decent employer offered a defined benefit pension scheme. I don't think there is an employer left in the private sector who would offer a defined benefit scheme now to a new started, and most have phsed them out even to existing staff, its a defined contribution to a PPP or similar now.
...

Private sector defined contribution schemes are largely outsourced to private pension provider companies, who borrow the money you put in over your working life, invest it on your behalf and, when you retire, pay it back to you with the profits (less charges).

Public sector pensions do not operate like that – the government does not “invest” contributions from public sector employees or manage them throughout the employee’s working life, so trying to apply the same “investment” logic is completely invalid. The “affordability” of public sector pension depends entirely on government cashflow at the time the pension is paid, and no-one can predict government finances in the future.

Bottom line is, comparing public and private pension provision is misleading. It is akin to criticising footballers for not scoring enough goals, compared to cricketers scoring runs.

there are a lot of similarities actually.

The private sector pension "crisis" was caused by underfunding by corporates of the pension scheme and unrealistic actuarial assumptions. Some corporates exacerbated this by borrowing money from the pension fund as well, and some didn't pay it back (see Bob Maxwell).

The State hasn't even bothered to have the pretence of a funded pension fund, instead treating it as part of general cashflow - no surprise its all gone tits up, if you spend what you were supposed to be investing & saving for the future.

The only way the State can get this back on track is by fundamnetal change to the defined contribution basis with each employee having their own pot, or by a sudden swing in demographics causing their to be less pensioners and more workers. Short of a plague or similar that ain't going to happen as people are living longer and longer.

W1

snailracer wrote:

W1 wrote:

t4tomo wrote:

If people leave in droves for the private sector, .

They won't, because they know what a good deal they already have.....

Well if that is true, those in the private sector who are complaining are free to try and get a cushy job in the public sector, no?

I'm sure a fair few of the members of the private sector who've been made redundant would happily do the jobs that these strikers seem unwilling to do, even with such good terms.

joelsim

Surely private pensions are cyclical. ie sometimes they do well and sometimes they don't. We just happen to be going through the latter at the moment, which is very bad luck for some but actually far less of an issue for the majority.

daviesee

Joelsim wrote:

Surely private pensions are cyclical. ie sometimes they do well and sometimes they don't. We just happen to be going through the latter at the moment, which is very bad luck for some but actually far less of an issue for the majority.

I think the point is that whereas a senior civil servant contributes around 2.5% to his pension, I contribute 100% into mine. I do get a tax break on it though but that is where the private sector sees the public sector as better off.

Specialized Needs

For those who are interested in a traffic update...

Whitehall and Westminster Bridge remain closed, but it looks very much like a clear up operation at present.

From where I am sitting I can see that traffic seems 'normal' flowing from Victoria Embankment (well, it is coming round onto Parliament Sq, anyhow) and seems to be OK to go up Victoria St and Millbank. There is a police cordon between Parliament Sq and Whitehall.

Millbank itself is fine.

Albert Embankment by Lambeth Palace is quite busy.

bails87

daviesee wrote:

Joelsim wrote:

Surely private pensions are cyclical. ie sometimes they do well and sometimes they don't. We just happen to be going through the latter at the moment, which is very bad luck for some but actually far less of an issue for the majority.

I think the point is that whereas a senior civil servant contributes around 2.5% to his pension, I contribute 100% into mine. I do get a tax break on it though but that is where the private sector sees the public sector as better off.

2.5% of his wages go into it? Or if he puts £2.50 in the pot the civil service puts £97.50 in for him?

Specialized Needs

Specialized Needs wrote:

Westminster Bridge remain closed

That said, I can see some cyclists going over southbound.

tgotb

Specialized Needs wrote:

Whitehall and Westminster Bridge remain closed, but it looks very much like a clear up operation at present.

Just as I predicted this morning; it's 4pm and the strikers have all gone home, thinking they've done a full day...

raymondo60

Getting ready to leave for home from Albert Embankment going south-west and it looks pretty clear - spot of rain though for a change!

Specialized Needs

Raymondo60 wrote:

Getting ready to leave for home from Albert Embankment going south-west and it looks pretty clear - spot of rain though for a change!

Hmm, Albert Embankment/Lambeth Bridge/Lambeth Road looks quite snarled, but seems OK SW towards Vauxhall.

daviesee

bails87 wrote:

daviesee wrote:

Joelsim wrote:

Surely private pensions are cyclical. ie sometimes they do well and sometimes they don't. We just happen to be going through the latter at the moment, which is very bad luck for some but actually far less of an issue for the majority.

I think the point is that whereas a senior civil servant contributes around 2.5% to his pension, I contribute 100% into mine. I do get a tax break on it though but that is where the private sector sees the public sector as better off.

2.5% of his wages go into it? Or if he puts £2.50 in the pot the civil service puts £97.50 in for him?

The way I read is that to get a final salary pension he contributes 1.5% to 3% of his current salary. Whatever is required to top this up is paid for by the tax payers. See below....
"Under the current schemes, civil servants pay 1.5% to 3.5%, nurses and teachers pay between 6% and 8% and the police pay up to 11%."

From here - http://www.guardian.co.uk/society/2010/ ... tributions

Note that public empoyees are not treated equally :evil:

MonkeyMonster

So blackfriars all the way north of the river on the racetrack is looking fine and dandy then?

snailracer

t4tomo wrote:

snailracer wrote:

…
Bottom line is, comparing public and private pension provision is misleading. It is akin to criticising footballers for not scoring enough goals, compared to cricketers scoring runs.

there are a lot of similarities actually.
The private sector pension "crisis" was caused by underfunding by corporates of the pension scheme and unrealistic actuarial assumptions. Some corporates exacerbated this by borrowing money from the pension fund as well, and some didn't pay it back (see Bob Maxwell).

The public sector should bear no responsibilty for these examples of private sector mismanagement.

t4tomo wrote:

…
The State hasn't even bothered to have the pretence of a funded pension fund, instead treating it as part of general cashflow - no surprise its all gone tits up, if you spend what you were supposed to be investing & saving for the future…

The pretense would be if the state claimed there was a pension “fund” containing an investment “pot” for every public sector pension – there isn’t and never has been. The state does not, and IMO should not, be “investing & saving for the future” in the purely financial sense you may be assuming – it does this indirectly, by managing the economy in the broadest sense and providing public services (education, hospitals, police, etc.) so that there is a population of productive workers and profitable companies to tax.

t4tomo wrote:

…The only way the State can get this back on track is by fundamnetal change to the defined contribution basis with each employee having their own pot...

Have you read the Hutton report on pensions, 2011? There were some recommendations for reform, but there was no gaping pensions "black hole" identified. The recommendations also included:

- "Pensions based on career average earnings will be fairer to the majority of members that do not have the high salary growth rewarded in final salary schemes". IOW, keeping Defined Benefits pensions!

- "Honouring, in full, the pension promises that have been earned by scheme members (their “accrued rights”) and maintaining the final salary link for past service for current members". Ditto.

t4tomo wrote:

… a sudden swing in demographics causing their to be less pensioners and more workers. Short of a plague or similar that ain't going to happen as people are living longer and longer.

No demographic apocalypse was predicted. Maybe that's something to do with the Tidal Wave of Obesity that's going to lay waste to the country.

snailracer

W1 wrote:

snailracer wrote:

W1 wrote:

t4tomo wrote:

If people leave in droves for the private sector, .

They won't, because they know what a good deal they already have.....

Well if that is true, those in the private sector who are complaining are free to try and get a cushy job in the public sector, no?

I'm sure a fair few of the members of the private sector who've been made redundant would happily do the jobs that these strikers seem unwilling to do, even with such good terms.

Well yes, even a lowly public sector salary would be more generous than the dole.
Perhaps these jobseekers would like to become investment bankers, instead - I heard they've got even better packages than teachers.

snailracer

<gloat>

Soooooo, I hope everyone watched the BBC News tonight. Not only are existing public sector pensions affordable, they are projected to become even more affordable in the future.

There was even a story about the rapidly rising birth rate, which further undermines the demographic timebomb argument used to attack public sector pensions.

Some of you folks should really try to stay better informed than David Cameron :P

</gloat>