Br Steel and the big Pension question
Discussion
FredClogs said:
I'm sure you can afford £20 a week to give to some corporation or other with a turnover of $107billion for nothing in return... Go ahead, put your money where you mouth is, better still why not give £20 a week to the Donkey sanctuary so the hard up execs and investment trusts behind Tata don't have to...
You fool.
I must be a fool because I can't see the answer to my question anywhere in your post. You fool.
Welshbeef said:
...
...if they sell the new employer will not take the hit....
If they sell, the liabilities of the company will be part of whatever deal is struck I would have thought. What the new owner does with them afterwards is another matter....if they sell the new employer will not take the hit....
FredClogs said:
Corporatism at its worst. Whilst the staff who dedicated a life for the likes of Tata and BHS are forced into poverty and tax payers forced to yet subsidise big businesses failure to live up to their contractual obligations.....
I have some sympathy with the general view you're expressing, but...- I'm not convinced "poverty" is a useful word to use
- I'm not convinced any financial woes of the employees would be able to be pegged solely down to this pension manoeuvre
- company law etc in this country has evolved over a very long period of time. While I can see your point about the parent company hardly being poor, if you start fiddling with company law without massive amounts of due care and attention you will be subjected to the laws of unintended consequences.
The very rules and structures that Tata is using here are likely to be of great benefit not just to mega-corps but also all the SME businesses out there.
Perhaps something more robust needs putting in place in terms of where liabilities such as the pension pot get held such that the company going tits up doesn't lead to problems, owners can't leech profit out unless liabilities such as pensions are 100% covered etc...but then I'm pretty sure rules and regulations already exist for this (hence the ability for the PPF to exist).
You may not like it wrt extremely large corporations, but you have to ask yourself whether the system works (with all prejudices aside) more or less for the full range of companies. It would be a mistake to "reboot" if that caused equal and opposite problems elsewhere.
Murph7355 said:
Welshbeef said:
...
...if they sell the new employer will not take the hit....
If they sell, the liabilities of the company will be part of whatever deal is struck I would have thought. What the new owner does with them afterwards is another matter....if they sell the new employer will not take the hit....
FredClogs said:
Corporatism at its worst. Whilst the staff who dedicated a life for the likes of Tata and BHS are forced into poverty and tax payers forced to yet subsidise big businesses failure to live up to their contractual obligations.....
I have some sympathy with the general view you're expressing, but...- I'm not convinced "poverty" is a useful word to use
- I'm not convinced any financial woes of the employees would be able to be pegged solely down to this pension manoeuvre
- company law etc in this country has evolved over a very long period of time. While I can see your point about the parent company hardly being poor, if you start fiddling with company law without massive amounts of due care and attention you will be subjected to the laws of unintended consequences.
The very rules and structures that Tata is using here are likely to be of great benefit not just to mega-corps but also all the SME businesses out there.
Perhaps something more robust needs putting in place in terms of where liabilities such as the pension pot get held such that the company going tits up doesn't lead to problems, owners can't leech profit out unless liabilities such as pensions are 100% covered etc...but then I'm pretty sure rules and regulations already exist for this (hence the ability for the PPF to exist).
You may not like it wrt extremely large corporations, but you have to ask yourself whether the system works (with all prejudices aside) more or less for the full range of companies. It would be a mistake to "reboot" if that caused equal and opposite problems elsewhere.
FredClogs said:
Oh, it's all about you and how successful you are now is it?
I'm so happy for you.
Viva la revolution.
I only opened this thread as I saw who started it and was scrolling through to find the bit where the wallet/willy waving comes out. Far too many on here these days doing that.I'm so happy for you.
Viva la revolution.
limpsfield said:
I only opened this thread as I saw who started it and was scrolling through to find the bit where the wallet/willy waving comes out. Far too many on here these days doing that.
The usual suspects, with seemingly zero knowledge about company law or pensions, trying to make a nonsensical point.Nothing to see here...
Foliage said:
I think they should be liable for the pensions...
I kind of do too. Especially those already retired. I don't really understand how DB schemes are allowed to not be fully funded for those already in retirement. That said if it were a foreign sub that had folded and UK employees were being asked to subsidise foreign retirees I'm not sure we'd all be so keen...fblm said:
I kind of do too. Especially those already retired. I don't really understand how DB schemes are allowed to not be fully funded for those already in retirement.
Do you mean 'fully funded' as in being able to buy in an annuity policy from a third party (insurer) to match the payments due to the employee?This would significantly reduce the assets available to non-pensioners, exacerbating their situation.
sidicks said:
fblm said:
I kind of do too. Especially those already retired. I don't really understand how DB schemes are allowed to not be fully funded for those already in retirement.
Do you mean 'fully funded' as in being able to buy in an annuity policy from a third party (insurer) to match the payments due to the employee?This would significantly reduce the assets available to non-pensioners, exacerbating their situation.
This may be a how long is a piece of string question but what is the minimum ratio of assets to liabilites a DB scheme is allowed? Ie if a scheme went into administration today (or whatever the technical term is) what is the maximum haircut everyone would have to take on their 'entitlement'?
fblm said:
Yes thats what I meant. I had always assumed thats how they worked TBH, obviously I was wrong. I appreciate that would mean less in the pot to compound investment gains for all members but then I assumed that was part of why these schemes are so expensive for employers. I'm not normaly one for hysterics but new money being used to pay out old investors does kind of look a little like another investment scheme we all know of.
This may be a how long is a piece of string question but what is the minimum ratio of assets to liabilites a DB scheme is allowed? Ie if a scheme went into administration today (or whatever the technical term is) what is the maximum haircut everyone would have to take on their 'entitlement'?
As I understand it 10% when the PPF takes over - basically all funds pay into an insurance premium so when one is in trouble they have it covered off. However all up they have a £400billion plus gap... The insurance provider has nowhere near that level. A bit like Fannie May and Freddie Mac they are the lenders of last resort but if all the banks went under/claimed against insurance policies it would be bust which is why the Fed bailed them out. So many people really don't realise how close the world was to the edge in 2008 Sept. You'd lose all your savings companies would fold as they couldn't pay suppliers and suppliers couldn't pay them and customers couldn't buy anything plus the cash reserves they had would be lost due to failed banks. This may be a how long is a piece of string question but what is the minimum ratio of assets to liabilites a DB scheme is allowed? Ie if a scheme went into administration today (or whatever the technical term is) what is the maximum haircut everyone would have to take on their 'entitlement'?
fblm said:
I kind of do too. Especially those already retired. I don't really understand how DB schemes are allowed to not be fully funded for those already in retirement. That said if it were a foreign sub that had folded and UK employees were being asked to subsidise foreign retirees I'm not sure we'd all be so keen...
That's the crux of it. We seem more than wanting foreign entities of Tata to bail out the UK yet would we do the same? Given in the UK we wouldn't bail out equitable life letting pensioners suffer many to death before hand outs confirms we wouldn't piss on them if they were on fire.
FredClogs said:
Corporatism at its worst. Whilst the staff who dedicated a life for the likes of Tata and BHS are forced into poverty and tax payers forced to yet subsidise big businesses failure to live up to their contractual obligations.
I've decided that I'm going to divest all the loss making parts of my life, my mortgage and shopping bills and petrol bill into my kids names and all the profit making bits of my life I'm going to incorporate off shore - does that seem reasonable to everyone?
We're quite quickly sleep walking into a neo feudal age... It can't happen, the matrix will reset.
I assume this is a tongue in cheek post, but I think it’s worth reminding people of what happened in feudalistic societies before the modern capitalist lifted the first world out of the industrial revolution and the worst of the unretrained free market:I've decided that I'm going to divest all the loss making parts of my life, my mortgage and shopping bills and petrol bill into my kids names and all the profit making bits of my life I'm going to incorporate off shore - does that seem reasonable to everyone?
We're quite quickly sleep walking into a neo feudal age... It can't happen, the matrix will reset.
- you were too ill to work - your family starved and died
- you were too old to work - your family starved and died
- there was no work in your area - your family uprooted and traveled along dangerous roads to find new work, or else they starved and died
- your feudal lord broke a contract with you - zero legal comeback (apart from starving and dying)
- “climate change” caused the harvest to fail - your livestock starved and died (followed by your family)
In a nutshell, it was not pleasant. People had multiple kids due to massive infant mortality rates, and the average age of death was, what, 50?
Yes, getting your pension terms shafted is no doubt a nasty feeling, but I still feel that a social democracy with a functioning commercial sector offers the highest benefit for all - rather than any of this “matrix reset” nonsense.
Welshbeef said:
However to even think you can retire on 2/3rds salary is a bit of a joke and it's time those in the public sector to start to understand how different it is in the real world defined contributions set up no safety net.
For the purposes of accuracy / balance, I started in local govt 15 years ago. If I built up 40 years service, I’d have retired on 50% pay max. Local govt is over 25% of all public spend, so I don’t recognise this 2/3rd figure, and don’t agree with it.Added years were given occasionally (mostly to senior management), but have been unheard of now for at least 6 years at my place. The final salary scheme has been watered down to career average, employee contribution rates increased, recent loss of NI contracting out rebate (OK small) and - most punitive of all, the cap on total exit benefits of £95k. This has been absorbed by the sector, where salaries of like for like professions are still way below the private sector.
I concede senior management have often exploited the scheme by engineering early retirement exits just after 50 (increased now to 55) which can cost the fund up to £250k (now of course capped at £95k for redundancy, lump sum and any pension strain). Worth pointing out our own pension scheme has outperformed investment managers for the last few years, and has low per-head admin costs.
My point: do we want a race to the bottom on our pension provision? Who do that help? Other than the “fox that lost its tail”. We need a sector that is realistic, affordable and fair.
I think auto-enrol has been good, and I think more private sector employees should be forced to take responsibility for their old-age.
Trying to stop the small percentage of high paid employees from exploiting their position is pretty pointless - they collectively have just too much experience of doing it, but more transparency should be built in.
Ian
Ian Geary said:
For the purposes of accuracy / balance, I started in local govt 15 years ago. If I built up 40 years service, I’d have retired on 50% pay max. Local govt is over 25% of all public spend, so I don’t recognise this 2/3rd figure, and don’t agree with it.
Prior to 2014, the LGPS scheme was a 1/60ths scheme with inflation increases post retirement - basically the most expensive DB scheme you can get. You not agreeing wth it doesn't mean it doesn't exist! Entitlement under the previous scheme is protected.Ian Geary said:
Added years were given occasionally (mostly to senior management), but have been unheard of now for at least 6 years at my place. The final salary scheme has been watered down to career average, employee contribution rates increased, recent loss of NI contracting out rebate (OK small) and - most punitive of all, the cap on total exit benefits of £95k. This has been absorbed by the sector, where salaries of like for like professions are still way below the private sector.
As explained on the LGPS website the career average (revalued carer average, which people conveniently forget) can provide higher benefits for some people, particularly given the higher (1/49th) accrual rate.You also fail to acknowledge that the pensions cap works to the benefit of public sector workers relative to the private sector as the true value of the inflation link is not taken into account properly.
Ian Geary said:
I concede senior management have often exploited the scheme by engineering early retirement exits just after 50 (increased now to 55) which can cost the fund up to £250k (now of course capped at £95k for redundancy, lump sum and any pension strain). Worth pointing out our own pension scheme has outperformed investment managers for the last few years, and has low per-head admin costs.
eh? Please explain - who manages the assets of the LGPS?Ian Geary said:
My point: do we want a race to the bottom on our pension provision? Who do that help? Other than the “fox that lost its tail”. We need a sector that is realistic, affordable and fair.
Your pension is only 'affordable' as someone else is paying for most of it!Ian Geary said:
For the purposes of accuracy / balance, I started in local govt 15 years ago. If I built up 40 years service, I’d have retired on 50% pay max. Local govt is over 25% of all public spend, so I don’t recognise this 2/3rd figure, and don’t agree with it.
Added years were given occasionally (mostly to senior management), but have been unheard of now for at least 6 years at my place. The final salary scheme has been watered down to career average, employee contribution rates increased, recent loss of NI contracting out rebate (OK small) and - most punitive of all, the cap on total exit benefits of £95k. This has been absorbed by the sector, where salaries of like for like professions are still way below the private sector.
I concede senior management have often exploited the scheme by engineering early retirement exits just after 50 (increased now to 55) which can cost the fund up to £250k (now of course capped at £95k for redundancy, lump sum and any pension strain). Worth pointing out our own pension scheme has outperformed investment managers for the last few years, and has low per-head admin costs.
My point: do we want a race to the bottom on our pension provision? Who do that help? Other than the “fox that lost its tail”. We need a sector that is realistic, affordable and fair.
I think auto-enrol has been good, and I think more private sector employees should be forced to take responsibility for their old-age.
Trying to stop the small percentage of high paid employees from exploiting their position is pretty pointless - they collectively have just too much experience of doing it, but more transparency should be built in.
Ian
Public / private sector pay levels for equivalent jobs currently favour the public sector http://www.telegraph.co.uk/finance/personalfinance...Added years were given occasionally (mostly to senior management), but have been unheard of now for at least 6 years at my place. The final salary scheme has been watered down to career average, employee contribution rates increased, recent loss of NI contracting out rebate (OK small) and - most punitive of all, the cap on total exit benefits of £95k. This has been absorbed by the sector, where salaries of like for like professions are still way below the private sector.
I concede senior management have often exploited the scheme by engineering early retirement exits just after 50 (increased now to 55) which can cost the fund up to £250k (now of course capped at £95k for redundancy, lump sum and any pension strain). Worth pointing out our own pension scheme has outperformed investment managers for the last few years, and has low per-head admin costs.
My point: do we want a race to the bottom on our pension provision? Who do that help? Other than the “fox that lost its tail”. We need a sector that is realistic, affordable and fair.
I think auto-enrol has been good, and I think more private sector employees should be forced to take responsibility for their old-age.
Trying to stop the small percentage of high paid employees from exploiting their position is pretty pointless - they collectively have just too much experience of doing it, but more transparency should be built in.
Ian
Still plenty of teachers, NHS staff and plod retiring in their fifties on generous pensions. Firefighters retiring even earlier.
Tesco have just changed the terms of their final salary scheme, some people have been in it for over thirty years, they have just stopped it, even though members have kicked up, the response is pretty much "we cant afford it tough" another interesting little twist that wasn't really drilled home when people started was that in this scheme your pension dies with you.
How come Tesco can crap on members of the scheme but Tata cant?
How come Tesco can crap on members of the scheme but Tata cant?
Adrian W said:
Tesco have just changed the terms of their final salary scheme, some people have been in it for over thirty years, they have just stopped it, even though members have kicked up, the response is pretty much "we cant afford it tough"
How come Tesco can crap on members of the scheme but Tata cant?
I don't think you understand what Tesco have proposed.How come Tesco can crap on members of the scheme but Tata cant?
They are replacing the current DB arrangement for a) new employees and b) future accrual for existing employees.
Benefits earned to date are protected.
Adrian W said:
another interesting little twist that wasn't really drilled home when people started was that in this scheme your pension dies with you
interesting twist? Please explain...!!Adrian W said:
Tesco have just changed the terms of their final salary scheme, some people have been in it for over thirty years, they have just stopped it, even though members have kicked up, the response is pretty much "we cant afford it tough"....
Unbelievable.Tesco was still running a DB scheme for new members???
sidicks said:
Adrian W said:
Tesco have just changed the terms of their final salary scheme, some people have been in it for over thirty years, they have just stopped it, even though members have kicked up, the response is pretty much "we cant afford it tough"
How come Tesco can crap on members of the scheme but Tata cant?
I don't think you understand what Tesco have proposed.How come Tesco can crap on members of the scheme but Tata cant?
They are replacing the current DB arrangement for a) new employees and b) future accrual for existing employees.
Benefits earned to date are protected.
Adrian W said:
another interesting little twist that wasn't really drilled home when people started was that in this scheme your pension dies with you
interesting twist? Please explain...!!Long term employees see this as Tesco doing a Maxwell
The twist is that unless you are married you cannot leave any part of your pension to your estate, all that is paid are contributions and interest, this was hardly a headline term and was never driven home, the only way around this is a deathbed marriage.
They also decided to pay all bonus in Shares in place of cash, but subsequently did a U-turn.
My point however was, how can Tesco change the scheme at will but Tata cant, Tesco must have more ex and current employees?
I know people with ten years to go who feel they have been conned and would have done better elsewhere
Edited by Adrian W on Tuesday 31st May 10:29
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