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What staggers me is the constant lack of effective regulation. OK so as an IFA I have a bit of a personal and professional viewpoint/perspective that may be different to others, but here in the UK you have the Equitable life debacle where even now the Parliamentary Ombudsman states that consumers were failed by the Regulators.


And more recently the stunning failure of Northern Rock. There are other less well known regulatory failures - Split Caps for example, so the situations I outline are not isolated events.


Now we have the US regulator giving a license to a fraudulent organisation it had never even visited!!!!! Billions of $'s traded in a Pyramid selling scheme up in the stratosphere of Financial Trading.


Meanwhile in all that time, the people actually giving advice to the average person in the street in the, the IFA's, are told that regulation for them is an extraordinary plethora of dictates and rules that means that someone who just wants to save £100 a month gets a 14 page "suitability" report with so many "risk" warnings as to what could possibly happen that the whole thing tends to be a put off.


In contrast that same person could borrow thousands of pounds with virtually no "suitability" analysis whatsoever. Similarly people could save in Financially weak organisations like Equitable, Northern Rock etc. where the Regulators were turning a blind eye, a deaf ear or a stupefied brain to the implications and then the Regulators run around bleating when it all goes pear shaped.


Strange that savings in the UK has been almost regulated to extinction whereas up until recently credit was unregulated and you could borrow what you liked regardless of “suitability”. As an IFA I always thought it wrong that the Banks managed to convince the Regulators that a mortgage for thousands of £’s was not a Financial Product under the Financial Services Act 1998 whereas any savings vehicle (even a £5 a month plan) was. Belatedly, mortgage lending has come under the regulation of the FSA, but clearly if their assessment of Northern Rock is anything to go by, either the old boys network is still alive and well in Canary Warf or we have a regulator that does not know its a**e from its elbow.


And that despite the lessons that should have been learnt from The Equitable Life saga which are desperately trying to be published by the Parliamentary Ombudsman but which our wonderful government seems determined to stifle at every opportunity.


The truly awful lies taking part in parliament now by our elected representatives over the Equitable Life debacle is something I am amazed is not getting people more riled than they are? - But maybe everyone (including me I think) is just getting beaten down by the shear lies and spin from those in Government.


And I do not think there is much to choose from any of them. It seems to me there is far too much truth in the old joke “It matters not who you vote for, because sadly, the Government always gets in”




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The point about the failure of regulation is a good one but, at the same time, the people in charge of these banks and other organisations are supposed to be responsible people. If they could really be trusted then we wouldn't need regulation (as in if there were no criminals we wouldn't need police).


What I find strange is that public funding is supplied to the banks but the same failed top executives are left in charge and are still being paid the salaries and bonuses that they are only supposed to receive if they are successful.


In most jobs such incompetence/misbehaviour would result in demotion if not dismissal.


I don't know to what extent any top politicians are protecting their personal interests but their actions give rise to suspicion that such is the case. Perhaps that's the real tragedy - that their actions should even prompt such suspicions.



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I'm with Graham here. My first job when I left school in the 60s was with a High Street bank (Midland as was), and no-one had heard of regulation then. There was a general sense that bank people were MORE trustworthy than average, and anyone who did anything to undermine that was out on their ear pronto - no severance packages or unfair dismissal stuff!


Nowadays the impression most of us have (wrongly I'm sure) is that ANYONE who makes a living in "financial services" is a con-merchant with his/her snout deeply in the trough (and hand in our pocket)!


By the way, anyone here likely to invest money with a guy whose name sounds like "MADE-OFF"? *-)

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I guess it's a peculiar trait of human nature that no-one was complaining when the banks were delivering huge profits to their owners (the shareholders...and in reality that's you and me and everyone with an ISA, a pension scheme, savings account etc).


And those profits, and that lending, was driving the growth in the economy: spending, increases in property values, retail sales, emplyemnt growth and every other GDP-growth spin-off)



With high returns comes high risk.......




My take on this is that ultimately, it was not the "fault" of the banking/investment industries. They simply delivered what their owners and customers were asking for.



The fault lay and lies with the Government, though not with regard to lack of regulation, as the marketplace will always shift and cycle, and will recover in due course.

No, the core problem is less obvious but far more fundamental.


It is that the Government has over just the past decade been so incredibly profligate in its spending to grow the Public Sector, and has thus borrowed more money (on top of all the record tax receipts it has been raking in through the boom years) than in all the rest of our history COMBINED.


All this "National" debt is simply deferred taxation.


The built-up burden is now so great that it will take several whole generations of future tax-payers, at substantially increased rates of taxation, to gradually repay.

And this massive growth in the sixe of the Public Sector, now over 40% of ALL employees in Britain are emplyed in it. No longer in the wealth-creating private sector, but the wealth-draining Public Sector.


This burden on businesses will be enormously higher in all the years to come, strangling more and more of them, or forcing them to move their operations to other countries.

This is why capital is now gushing out of the UK into other less indebted and more efficient national economies, with the resultant collapse of sterling.


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With one bound he was (almost) free! 

Don't lets discuss the extraordinary incompetence and knavery of the financial services so called industry, that has collectively perpetrated a more successful destruction of the asset base of the developed world than the communists ever achieved, lets instead discuss how much the UK government has borrowed.  Oh, Brucey :-)

UK government debt is an undoubted problem, and its cost will fall on the UK public for years to come.  Amen.

However, the incredible chaos in the financial services sector has been created by those who work within it, and no-one else.  They have collectively behaved like complete and complacent fools, as their lemming instincts persuaded them to follow each other mutely over the brink.  For this idiocy, they have collected enormous salaries and bonuses, and few to date have been sacked, minus pension, bonus and severance, for their crass stupidity.  They do not posses a professional bone in their collective bodies, they do not use their own judgement, but just follow the herd while having the effrontery to seek to lecture those of us who harboured doubts, about our fuddy duddy, outmoded, outlook. 

Now it has all blown up in their faces (and ours), they seek to blame the regulators who failed to keep a sharp enough eye on their foolishness.  Who was it who lobbied tirelessly in UK and US to be free of restriction?  Who was it who claimed they could manage better under voluntary codes than under strict regulation?  Who was it who pleaded for "light touch" regulation?  Quite!

Now that they have done exactly what a little thought would have indicated, and many commentators actually forecast, they'd do, they're all sitting around wailing it wasn't our fault, it was the nasty regulators who didn't restrain us and protect us from ourselves.  Verily, words fail me!  But please don't lets discuss that.  Lets just focus on the far less destructive, in global terms, behaviour of the UK government.  Oh yes, and where is one supposed to assume their crackpot ideas came from?

Let's just remember this is the same crew (financial services) who want to get their hands on public sector pensions.  Not because public sector pensions cost any more overall, on a like for like basis, than private ones, but because they can then benefit from the fees involved while they plot their next assault on the world's asset base.  I should co-co!  Are we really so stupid as to buy that line from those with the biggest interest in the outcome.  I've seen cleverer scams on e-bay!

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It's a question of scale Brian.


The current difficulties of the commercial banks are headline news.


But the MUCH BIGGER and much more fundamental difficulties of the financial state of the UK as a whole due to PSBR debt are not so" sexy" to report on or analyse.

That doesn't make them any less.


Those who focus on the temporary loss of investor confidence in some banks, mainly through self-interest, really are ignoring the elephant in the room.

Which is going to trample them a helluva lot harder and for a helluva lot longer.


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At one time not all that long ago it was said that you never lose money in bricks and mortar or that banks never lost out.

It seems now that those sayings have gone by the board, if for example you had won 5 million on the national lottory where would you put your money? in a bank? what would happen if the bank went bust? you are only protected up to about 50 grand, I'm not saying a bank or banks will go bust but it is a possibility in this day and age.

Glad I aint got the added worries of having 5 mill in the bank, then again I suppose you could get a big tin box and stow your millions under the bed.

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Brian – we have had the discussion on public sector pensions and it seems that all but yourself except the fact that public sector pensions do cost far more than private sector pensions because there is no fund, it is paid for in the main out of taxes we all pay, both national and local taxes.


Ask your local authority (under the freedom of information act) how much as a percentage of your Council Tax goes on local services and how much goes on paying pensions in payment.


The percentage is staggering and some of us do object to paying more £’s a year into someone else’s pension pot than we can afford to pay into our own.


The issue of regulation is a thorny one. One that I believe you are totally wrong to label all in the Financial Services Industry as being complicit in some global scam. That is simply not the case.


My point is a simple one based upon years of watching the easily deceived regulating the clever dicks who went to the same schools and are part of the same old boys network.


As an IFA threatened by the then head of the FSA, Howard Davies with “regulatory oversight” if I dared to get my clients out of Equitable Life, I take issue with your assumption that all in Financial Services want lighter touch regulation. He said we had to “understand our responsibilities towards Equitable” !!!!!!!!!! – Clearly showing that he – as an ex Banker had no idea that we IFA’s have no responsibility to ANY Provider whatsoever. Our responsibility is to our clients and to our clients alone. It took a legal challenge to him setting out the UK law of agency for him to realise that. But what an amazing omission from the head of the most powerful regulator in the UK!


And what an amazing insight into how this regulator worked!! – It was supposed to protect the consumer but when it came down to it – what it actually tried to do was to protect a deeply flawed organisation that to this day seems to have been incestually “in-bed” with Government and regulator such that this Government is STILL blocking the Parliamentary Ombudsman’s report.


What most of us want is fair regulation across the board – and if we could have regulators that new what they were doing then that would obviously be a bonus. The Equitable Life scandal has been uncovered by the Parliamentary Ombudsman with as I understand it, a great deal of input by IFA’s and others in the industry who have worked tirelessly on behalf of their clients to get their cases heard.


Lighter touch we do not want, but you have to admit that the credit crunch has come about because of the total ineptitude of the regulators to regulate one of the main areas of finance – LENDING!


What they concentrated on was the oversight of supply – due no doubt by the excess’s of likes of the truly awful Allied Crowbar, Shabby Life and Guardian Royal Rip off. But these companies only stepped into the transfer frenzy opened up by the appalling deregulation of pensions by Maggie Thatcher’s Conservative government who ran GOVERNMENT adverts saying “Throw off the chains of your company pension scheme!”


What the banks did as “Lenders” was to manage to convince the regulators that they were not really in “Financial Services” as such and so they could have a “lighter touch” regulation under IMRO. That went on for years – up until just a few years ago in fact and in that time of virtually no regulation the banks moves into just about every aspect of financial services going such that by 2007, the banks as the 6 main high street outlets where providing the Financial Services Ombudsman with over 80% of all its complaints being aimed at the big banks and only 4 % last year from Ida’s. And that despite the fact that over 60% of all advice is from the IFA sector.


Work out the figures and order of magnitude for yourself.




All I am saying is that had we had effective regulation of the banking credit sector in the same way as we had regulation of the savings, investment, protection and pension sector, then we not be in the mess we are in now.


PLUS – it seems to me that whatever side of the pond you look at, the regulators are NOT able to regulate the more complex areas, preferring instead to make oodles of check list tick box jargon filled numpty nonsense oversight of “Reason Why letters” and more “Retail Distribution Reviews” than can ever be seen as sensible, because this gives the illusion of them actually doing something. Whereas the truth is that what they were actually doing, with Equitable Life and Northern Rock in particular was as excellent job of rearranging the deckchairs on those two Titanic’s at best - or at worst deliberatly turning a blind eye.


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I'm not going to argue about regulation of financial services Clive because I probably agree with you anyway :-)


However, regarding public sector pensions I would make the following points:

1) All of those pensions are contributory and the members of the schemes have paid or are paying into them at no less a percentage rate than they have been doing since they joined the scheme.

2) Where there is a shortfall in provision that is most likely to be due to the employing organisation taking a contribution holiday when times appeared good in order to reduce the amount they raised in taxes. Similar contribution holidays were also the cause of the shortfalls in the pension funds of Woolworths and other private sector companies.

3) The pension contribution of a local authority might look large in percentage terms when compared to the Council Tax but when one takes into account that Council Tax is only about 20% of the income of a local authority the real percentage is much lower.

4) Pension schemes (whether public or private sector) are part of the overall remuneration package of anyone in employment. Whilst public sector pension schemes have traditionally been attractive, that is balanced by the fact that earnings during employment have been lower than those in comparative private sector jobs.


I would also ask - if the terms & conditions offered to public sector employees are so vastly superior to those available in the private sector, why isn't everyone clamouring to take up every vacancy in the public sector?



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Over the years I've worked in both private and public sectors (and now in what's called the "voluntary sector," although my Boss doesn't ask for volunteers! :-D ).


At the level of the ordinary "PBI" I've really found very little difference in terms and conditions of employment. The big difference isn't between the private and public sectors, but between the top and the bottom of both (or sometimes all three, if you look at the directors of the big charities!).


What IS different about the pension arrangements is as Clive says, the way they're funded (or not). When Robert Maxwell spent the Mirror Group's pension fund (assuming that he'd get away with it somehow) he was universally condemned, but both State pensions and public sector occupational scams (sorry, SCHEMES) have been run that way since they began. The members pay in regularly (NI, Superann, or whatever), but the State takes their money as part of its overall income. No fund is ever built up, and the State blithely assumes (with no more reason than Maxwell) that it'll always be able to pay the pensions out of its ongoing revenue. The "pensions timebomb" was already causing panic long before the present crunch, but we've tended to forget that recently.


When we try to build a brave new world out of the financial wreckage, maybe fully-funded pensions - including State and public sector ones - should be part of the landscape (Oink, oink, flap, flap)!

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Good article from the Telegraph




Which mentions the "disgraceful" (I totally agree) tax raid on Private Pensions to the tune of £5Billion a year.


What many people fail to realise is just how disgraceful this tax is!


Because it was an idea thought up by Civil Servants and politicians who benefit from a pension scheme paid for out of the tax take NOW!


In other words - there is no fund for the Public Sector pensions (tho some have AVC "top-up" schemes that are funded) - This tax is disgraceful because it only taxes the chap with the Private pension or the lady in the company pension scheme, in other words schemes where you have to be prudent and actually SAVE for your retirement!


All the Public Sector worker has to do is to contribute 6% in most Public Sector schemes NHS, Local Gov and Teachers for example) however for the Civil Servants it is non contributory (but you can increase the spouses benefit by paying a bit more) and in return for this 6% the tax payer contributes a further 14% on average so that the public sector worker can enjoy an index linked pension and tax free lumpsum based upon a percentage of final salary at age 60.


In contrast the Private sector worker has there pension pot taxed to the tune of £5Billion a year and whatever income they get will be based upon the value of the pot and interest rates / annuity rates at the time of retirement. This £5Billion tax does not affect the Public Sector pensions because these are paid for out of Taxes. - OUT OF TAXES!!!


I am not sure the Public Sector workers truly appreciate the level of anger that is building up in the private sector who see there taxes increasing, their pension pots taxed as well and the Government telling them that they may have to carry on working until 70 or even later whilst the Private sector through the taxes its pays, including the tax on the pensions "pot" are paying for other workers to have a pension they could never possibly achieve!


And we cannot all become Public sector workers because someone somewhere has to make the profit to keep the whole thing going.


If you want to see the full wrath of what is building up on this - just Google "Public Sector Pension Timebomb".


Cameron knows it is a vote winner, but I doubt he and his party are trustworthy! - after all it was the Conservatives that opened the Pandora’s Box of Pension Transfers rather than simply update the pension rules to require an employer to maintain the value of a pension of someone who has left its employ. (Up until then they could "Freeze" it which meant exactly that! - no growth or inflation proofing)


It seems that all the Politicians can do of what ever colour is screw up. But for now they seem to be protecting their own.


The appalling debacle of their ignoring the Parliamentary Ombudsman’s report on the “Decade of Regulatory Failure” over Equitable Life is a stunning and sobering example of just how corrupt this Government has become.


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Just been reading a bit more about that nice Mr Made-Off (the $50BN scam guy), and it seems the system he was running worked exactly like a public sector or state pension scheme: as long as new people kept paying money in, he could keep paying "dividends" out to previous "investors," but as soon as the new money dried up, there was nothing there to pay anyone with.

In the case of pensions, of course, new money will never stop completely as the Govt can keep taking it off us, but as the ratio of wealth-generators to pensioners deteriorates the effect is the same.

And poor Mr Made-Off, like Robert Maxwell before him, is pilloried and branded a criminal for doing exactly what the Government has always done!

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May I just say as an ex employee of big bob that MGN where but a small part of his empire(but the one's who moaned the most), the unions at company I was with complained to the pensions authities about what was happening but where ignored, after all it was maggies era and unions where just there to be kicked it seems.
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CliveH - 2008-12-17 10:29 AM


If you want to see the full wrath of what is building up on this - just Google "Public Sector Pension Timebomb".




Just tried that Clive. First hit was the BNP web site. Not sure I always put full trust in what they have to say :-D


As a general point Here is the latest annual report for the Teesside Pension Fund, of which I am a member. I believe it shows that it isn't all public sector schemes which are in Timebomb mode :-D



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No - I am aware of that Graham - some newer employees in Local Government are restricted to a different pension scheme.


But the fact remains that true Public Service pensions are funded out of taxes and that means that if a Private pension fund is taxed then that Private scheme is funding not only its own members but others in receipt of Public Sector pensions as well.


The BNP will do anything to stir up anger and that is a worry. No doubt about it. And that is why we need to do something now to lance the boil.


Leave it too long and the BNP will be seen to be the only option.


When that happens I will be on the first flight/ferry out of here. But I do not want that to happen. So we have to do something now.


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Colin Makes a good point about the unions flagging up pension contribution irregularities re the MGN pension scheme.


The In-House AVC provider also flagged up that members of the Mirror Group Newspapers were having their contributions deducted from salary but that the scheme was not actually receiving these contributions and the response of the then regulator; the PIA (the precursor to the FSA) basically said "so what?"


Only after the event was it legislated that the regulator MUST act upon any report that a Provider is not getting the regular contributions to the scheme that it expects.


So to my mind this was/is another classic example of all the evidence being there, with people and organisations flagging up their concerns but the powers that be being totally inept at seeing what is going on.


It Beggars belief really.


And it is truly staggering that the same mistakes are being made time and time again.


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CliveH - 2008-12-17 10:23 PM


But the fact remains that true Public Service pensions are funded out of taxes and that means that if a Private pension fund is taxed then that Private scheme is funding not only its own members but others in receipt of Public Sector pensions as well.


Alright, let's accept that.


At the same time, contributions to pension schemes by private companies are funded from revenue - i.e. the income that they obtain from selling their goods and services from day to day. The company uses some of its income to fund its outgoings, which includes its pension scheme commitments, so its customers are funding that company's private scheme as well as any scheme that they belong to.


Whether we use barter or money we are all selling the skills which we possess and buying skills from other people which they possess and we don't - or choose not to use because we wish to use our time in other ways.


We have a public sector as well as a private sector as the latter, over the years, has proved itself incapable of voluntarily providing the level of certain services which are required by the society in which we choose to live.


People working in the public sector have as much right to be paid as those working in the private sector and vice versa. Those payments will consist of wages/salaries whilst working and pensions (for some) afterwards. The mix will have been arrived at by some form of bargaining between employer and employee and will change over time. That change will be driven by society as a whole. At any point in time, some people will have an advantage over others but, in the long run is there really much difference?





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But Graham


Is it right that one group of workers have their pension fund taxed whilst another group does not?


And is it right that the group who does not have their pension fund taxed are those who made the decision to tax the other groups pension, knowing it was a tax that would not effect them but would help secure there own pension in retirement?


Is it right that the group whose pension fund is not taxed can retire on a full index linked pension based upon a percentage of final salary with a guaranteed tax free cash lump sum also based upon final salary, whilst those whose pension fund is taxed to help provide that benefit for others have to depend upon the vagaries of the markets and interest rates in order to secure a pension. In other words, those that have their pension fund taxed have no such guaranteed income in retirement at all - Do you think that fair when what they have managed to save is taxed?


A person on £20,000 Final salary in a Public Sector scheme with 40 years service would get a pension of 40/80ths or £10,000 a year – index linked (plus £30,000 Tax free cash)


This £10,000 a year has to be funded out of taxes as there is no fund.


Contrast that to someone in the Private Sector who wants a £10,000 a year pension index linked and for the pension annuity alone the rate would be about 4%. Therefore the pension fund required by that individual would be £250,000.


But as this fund is taxed by Gordons first stealth tax each year this pension fund would have to be about 1% more so the fund would need to be £252,500. And this tax applied every year and so this person would have to pay more into his pension that before this tax applied.


But not the Public sector worker – at worst they just contribute a token 6% and for the Civil Servants – nothing at all.


All their pensions are paid for out of tax.


As Tony says so well! - It is exactly the same as the US Scam artist that took money in then paid it straight out. All is OK until something goes wrong and we all hit the buffers.


Well from where I am standing those buffers are damned close and coming up fast!




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Of course public sector pensions are paid for out of tax, that's where the public sector gets its income.


Private sector pensions are paid for out of company revenues because that's where they get their money from.


So, when we all pay our taxes some of that money goes to pay for pensions and when we all buy goods/services from the private sector some of that money also goes to pay for pensions.


It may well not be right that some funds are taxed but the way to correct any wrong is to remove it, not to drag everyone down by visiting the same wrong on them as well.



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Follow this link, download the Nuffield Foundation's, report, take one bag of ice, apply to head, and read.  http://tinyurl.com/6ep6jp

It has some very interesting facts and comments but, most importantly, it is the result of a detailed study, and not just the opinion of some newspaper's politically biased columnists.

My point about the difference between funded, and non funded, pensions seems well answered in the report. 

In any case, for there to be a fund, there must first be contributions.  In the private sector, those come in part from the employer, and in part from the employee.  If a non-contributory pension (but please read the report before responding, facts chaps, always facts!) is converted to contributory status, where are those contributions to come from?  If in the same manner as private, contributory, schemes, then is it not a racing certainty that the employees will have to be paid more to cover the new cost to them of their contributions?  And is it not also a racing certainty that the organisation's overall pay bill will increase, to the value of the new employer's contributions?  Even more exciting to contemplate, is the prospect of converting all existing members to a contributory basis. Can you imagine the hit on public finances of stumping up the correct, actuarially adjusted, "pot" for each member, so that their existing service is backed by a fund that can meet its liabilities?  Hmmmmmmmm.  Let's not go there, then! 

So, we keep the existing employees on their existing scheme, close it, and start a new scheme going forward.  Is this to be a final salary scheme, or a money purchase scheme?  I guess Clive will argue for money purchase, because that transfers the risk of shortfall to the individual.  This seems to have suited most of the companies who have hitched their waggons to that particular horse as well.  (In fact, public/private final salary schemes both provide pensions of a little above 20% of the member's final salary.  Surprisingly little difference there, in fact.)  Where the boot really pinches, is when we look at the pensions actually being provided by money purchase schemes, where the average payout is in the region of just 7% of final salary.  Why?  Because the companies duped their employees by scaling back their contributions to below the level they would have needed to maintain for a final salary scheme.  Thus, the pots were shrunk, and with the smaller pot, the payout.  Ordinary people are not going to spot this disgraceful sleight of hand, yet it is this "cheaper" type of pension that is now advocated for all employees. 

In truth, what is being said by the proponents of these "reforms", is that we (the folk in the street) simply can't expect to have reasonable pensions, because the cost to the proponents (who of course will have excellent pensions) is too high.  However, on the evidence of the report, contribution levels, and payouts, from both public and private final salary schemes are not, in fact, that different.  This seems to me to contradict the view that a decent pension is the unique privilege of the public sector, and that we simply can no longer afforded the cost of reasonable pensions in either sector.

This really is a nasty, mean-minded, vindictive, little campaign, shot through with self interest, designed mainly to transfer more funding to the financial services sector to manage ??, while reducing benefits to scheme members in the interests of profits now.  By the time the average contributing member realises they have been had, they will be struggling on a shadow of what they expected, and impotent to retaliate.

Final point.  Too much of the stock market is already in the hands of pension funds.  Convert the public sector to funded pensions and that percentage will rise.  In the absence of proper oversight and proper qualification (and we lack both), that will, in my opinion, be a recipe for corruption, manipulation, further obfuscation, and yet another manifestation of the selling of imaginary securities.  Fairy gold indeed!

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I am familiar with this report Brian – in particular the rather wishy washy “spin” on page 32 and 33 re Table 4 re the cost savings cited and them the rider slipped in on a subsequent paragraph ….” This means that the reforms may reduce the tax payers spending on pensions and other benefits by less than the fig’s in table 4 suggest”


And all this from a report that is written to help calm the anger felt by many on the disparate funding and taxation of the Public and Private Sector pensions!


Brain I am amazed you quote it because it does what I perceive to be your viewpoint no favours whatsoever!


A report that publishes a nice simple table saying what the savings will be from the reforms and then goes onto say that these savings may be fictional. Did Alistair Campbell write this?


Interestingly on page 33 it confirms that the current employer contribution (i.e. funding direct from the taxpayer) for the Public Sector pensions is 14% for the NHS and Teachers and 20% for Civil Servants. Compare that to most Private Sector schemes where the Employees contribution is simply matched by the employer up until a maximum of usually 6%.


So 14% and 20% from the “employer” in Public Sector Schemes is extraordinarily generous. Especially when it consider where the budgets these Public Sector “employers” actually come from.


The report also states that in pure monetary terms the Private Sector employers contribute £51Billion a year into pensions (all of which is subject to Gordon’s first Stealth tax) whereas Public Sector employers contribute £31Billion (non of which is subject to this Stealth tax).


BUT! Public Sector employees only represent about 20% of the work force and so to equal the funding within the Public Sector, the Private Sector would have to contribute £155Billion a year, or 3 times as much as they actually currently contribute.


AND! Then you have to realise that the Private Sector has to make a sufficient profit to not only contribute the £51 Billion it does at present, but enough profit to pay the tax so that it can supply the £31Billion paid into the Public Sector as well.


Then perhaps you can see to order of magnitude of the problem.


The comparative chart on page 43 says it all re the relative benefits of Public and Private sector pensions - the fact that the tax payer funds them both is inequitable is correctly termed a "timebomb"


Like I say – those buffers are coming up fast.


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