It was only a couple of weeks ago that I read that the Government was doing a kind of deal with the Civil Service. Don’t go on strike over the redundancies and we won’t look at the pensions you guys get.
But it seems that that deal, if it ever was on the table, will have been kicked into the long grass following the publication today of a report which suggests that these pensions have been run like some sort of unstable Ponzi scheme... and it’s you and me that is doing the paying. Paying, which is going to, according to the report, “impoverish future generations”.
Governments of both colours have bought into the scheme, because they’ve been too scared to expose it, according to the Public Sector Pensions Commission.
For decades public sector pensions have been calculated by the state using artificially high rates of interest to estimate the present cost of a pension to be paid in decades to come. The higher the rate, the lower the present contributions needed to meet those future pension costs.
But the discrepancy in the manner of calculation (done by Civil Servants....hmmmm) has been massive, actually around 100%+. Contributions have been set at 20% of a worker’s salary when the real cost of the scheme is more than 40%.
Unlike other pensions which actually have to be funded by stock market or government bond investments, these pensions are simply paid, whether the money is there or not... and it is not.
So who picks up the bill for the difference? The tax payer. You and me. Emotively the Telegraph says that it is the “priva
te sector taxpayer who ultimately has to pay for everything that this bloated, inefficient state sector does” and elsewhere suggests, in tabloid style, that it is the “hard-working private sector taxpayer” that pays, as if the lazy ones were somehow exempt.... (Come on Telegraph, you can do better than that!)
However, in fairness, these pensions are an insult to hard working and lazy private sector workers who have found because of falling stock market and, of course Brown’s taxation of the private sector pension schemes, that they are left with little or no pension. People whose pensions were with rogue companies, staffed by either incompetents or thieves, like Equitable Life, have lost even more to stupidity of their directors.
Today’s report calls for sweeping changes to public sector pensions without delay, citing a debt of crippling proportions to come. So, as we are all in this together, it looks like changes will have to be made to millions of pensions (including those of MPs and ministers).
However, the only unions that have any strength at all today are the public sector unions and without the Civil Service the government will not be able to carry out any of its reforms...
No wonder governments since before the war have shied away from tackling this. Let’s hope Condem and Camerclegg will have the courage to go through with it.
But it seems that that deal, if it ever was on the table, will have been kicked into the long grass following the publication today of a report which suggests that these pensions have been run like some sort of unstable Ponzi scheme... and it’s you and me that is doing the paying. Paying, which is going to, according to the report, “impoverish future generations”.
Governments of both colours have bought into the scheme, because they’ve been too scared to expose it, according to the Public Sector Pensions Commission.
For decades public sector pensions have been calculated by the state using artificially high rates of interest to estimate the present cost of a pension to be paid in decades to come. The higher the rate, the lower the present contributions needed to meet those future pension costs.
But the discrepancy in the manner of calculation (done by Civil Servants....hmmmm) has been massive, actually around 100%+. Contributions have been set at 20% of a worker’s salary when the real cost of the scheme is more than 40%.
Unlike other pensions which actually have to be funded by stock market or government bond investments, these pensions are simply paid, whether the money is there or not... and it is not.
So who picks up the bill for the difference? The tax payer. You and me. Emotively the Telegraph says that it is the “priva
te sector taxpayer who ultimately has to pay for everything that this bloated, inefficient state sector does” and elsewhere suggests, in tabloid style, that it is the “hard-working private sector taxpayer” that pays, as if the lazy ones were somehow exempt.... (Come on Telegraph, you can do better than that!)However, in fairness, these pensions are an insult to hard working and lazy private sector workers who have found because of falling stock market and, of course Brown’s taxation of the private sector pension schemes, that they are left with little or no pension. People whose pensions were with rogue companies, staffed by either incompetents or thieves, like Equitable Life, have lost even more to stupidity of their directors.
Today’s report calls for sweeping changes to public sector pensions without delay, citing a debt of crippling proportions to come. So, as we are all in this together, it looks like changes will have to be made to millions of pensions (including those of MPs and ministers).
However, the only unions that have any strength at all today are the public sector unions and without the Civil Service the government will not be able to carry out any of its reforms...
No wonder governments since before the war have shied away from tackling this. Let’s hope Condem and Camerclegg will have the courage to go through with it.
This was another way of Brown clawing money from taxpayers Tris, without any embarrassment whatsoever. He used up the stolen pensions - no protest really - nobody took to the streets so thought he could get away with using our money to fund these grossly over-enhanced public pensions. All to please the unions who bleated 'our members can't afford to pay more SA'.
ReplyDeleteThis may be the telling point for Mr Camerclegg Subrosa.
ReplyDeleteNo one wants to see ordinary workers like the clerks and the likes suffer (although there are several in the Revenue that I would personally shoot)but we keep on being told we are all in this together, so everyone must share the pain for the few that make millions for themselves and billions for their companies. I know people, acquaintances, colleagues, who have done pretty much nothing for years and who will retire on 2/3 of their salary... at 60! That’s just not fair, and above all, we’ll need to find 10 new oil fields to fund it.
So, it's up to Camerclegg.
But I've already predicted civil unrest as the real pain bites this winter. Even the lazy Brits will almost undoubtedly kick off about having to pay for the errors of the bankers and the government.
If the public sector strike and take to the streets I wouldn't be in the least surprised.
What fun that will be if the public sector workers decide on civil disobedience. I so much enjoyed watching the hunting, shooting and fishing brigade getting a good clubbing form inspector Knacker over the fox hunting ban. How much more fun to see Sir Humphrey Appelby getting one too, when him and his ilk take to the streets over their grossly inflated pensions. Who says blood sports are dead in this great nation of ours: Britain, Britain, Britain, (Tom Baker voice over) and a rousing chorus of “hail to the chief” (oops wrong nation).
ReplyDeleteHum Munguin...
ReplyDeleteDid you take gin with your corn flakes again?
Sir Humphrey won't be on strike. Given the London police's policy with regards to people who protest he'll have servants to do that for him. What he will do is bend over backwards to ensure that government legislation falls down the back of desks... and without staff what can you do anyway?
Off to the club for an early snifter maybe?