Pensions?

[CliveH]

Hi Graham

 

"Pensions and salary are part of a whole package so if you want the same pensions in both public and private sectors lets please also have the same level of salaries in both."

 

Agreed - the public sector salaries are NOT that far behind the public sector and you neatly ignore the job security and other benefit packag items that the public sector enjoy.

 

Private sector salaries WERE higher because the individual had to buy the DISB, the income protection, the ill health benefits etc etc on the open market and these things cost.

 

Yes I agree that we all make choices but I was not quoting you out of context - sorry Graham but i think it is you that are doing that.

 

The fact is that as regards the funding of pensions, up until Gordons stealth tax on pensions we had a level playing field. After the tax was introduced we did not.

 

The decision was not mine or anyone elses in the private sector - the decision was made by the public sector. That fact that the public sector chose an obscure way of selectively taxing funded pensions so that they were not affected is what stinks.

 

And like I say - Gordon hoped that the effects would not be seen for some time but thanks to FoI requests the affect on the private sector pensions is seen to be dire.

[GypsyTom]

CliveH - I won't do a 'Quote' post as it would be a foot long but will deal with just a couple of points.

Your example of using a salary sacrifice states that I would not have to pay employee's N.I. contribution but as a higher-rate taxpayer you will be aware that that does not apply as normal N.I. stops when you reach the higher rate.

Secondly, I didn't make it clear but I would have thought it obvious that I would never pay myself £1000 and then have to invest the net amount and go through some convoluted paperwork to get my tax back.

What I did and would do is pay the pension contribution from the company in the first place so the entire £1000 goes into the pot with no N.I. due from employer or employee. In my post I don't think that I said that I would pay the money to myself. I did give an example of what happens if I draw the money as salary and the put it into some other investment vehicle.

As a matter of interest I ended up with a large pot, which I took just recently at 60 with a GAR of 9.7% but that was just good luck thirty years ago!

Every single penny that was paid into the fund was by a company contribution. I'm not daft you know! :-D

I'm sorry if I missed a reference by you to higher-rate tax-payers being slightly different from others but I obviously did.

Edited to say: The cost of taking money from a pension fund at an early age is that you will have to pay the tax back! You cannot get tax relief by putting money into a pension fund and then withdraw it five years later say, without a penalty! It's this penalty that would put off someone from raiding their pension fund. Is this not the case?

[CliveH]

"If I am a director of a limited company, which I own, and I have a spare £1000 to pay myself, I will receive only £523.04 in my pay packet. I'm referring of course, as you've no doubt already inferred, to the fact that I'm a higher-rate tax-payer.”

 

I quote "......in my pay packet"

 

and

 

"entire £1000 goes into the pot with no N.I. due from employer or employee"

 

which is exactly what I said!

 

"I did give an example of what happens if I draw the money as salary and the put it into some other investment vehicle."

 

If you did I missed it and still am missing it!! 8-)

 

"60 with a GAR of 9.7%"

 

Good for you! - but most GAR's are single life with no escalation - not what everyone wants. But if you have one - good to have the option.

 

"The cost of taking money from a pension fund at an early age is that you will have to pay the tax back! You cannot get tax relief by putting money into a pension fund and then withdraw it five years later say, without a penalty! It's this penalty that would put off someone from raiding their pension fund. Is this not the case?"

 

No it isn't. Company pension schemes will allow you to take the net contributions out if you leave the scheme within 2 years - not 5.

 

But if you want to borrow £50K from your own pension fund to buy a property to run your business from then you have to have £100K in the "pot". But other than that you can put the £100K K into day and apart from the administrative time of maybe 5 working days, your pension fund can write a cheque for the property the very next day!

 

Your pension fund then owns the property and you own the pension.

 

 

[GJH]

CliveH - 2010-03-16 12:39 PM

 

Hi Graham

 

"Pensions and salary are part of a whole package so if you want the same pensions in both public and private sectors lets please also have the same level of salaries in both."

 

Agreed - the public sector salaries are NOT that far behind the public sector and you neatly ignore the job security and other benefit packag items that the public sector enjoy.

In my first post I did actually say "there are also things like level of payment whilst in employment, holiday entitlement etc to consider." I used "etc" to avoid spelling out all other factors as I thought it would be self-evident (which your comment confirms).

 

Private sector salaries WERE higher because the individual had to buy the DISB, the income protection, the ill health benefits etc etc on the open market and these things cost.

 

Yes I agree that we all make choices but I was not quoting you out of context - sorry Graham but i think it is you that are doing that.

 

The fact is that as regards the funding of pensions, up until Gordons stealth tax on pensions we had a level playing field. After the tax was introduced we did not.

 

The decision was not mine or anyone elses in the private sector - the decision was made by the public sector. That fact that the public sector chose an obscure way of selectively taxing funded pensions so that they were not affected is what stinks.

 

And like I say - Gordon hoped that the effects would not be seen for some time but thanks to FoI requests the affect on the private sector pensions is seen to be dire.

So things have changed. Well, what a surprise! Come on, we are both old enough to know that things change all the time - and they don't affect everyone in the same way and often enough are unfair to one set of people compared to another.

 

I can remember "suffering" from public sector pay restrictions whilst seeing private sector pay rise by more. Unfair? It seemed so at the time.

 

I, like many others with savings and no debt, am suffering as a result of greed in the privately run financial sector resulting in low interest rates (which are an advantage to many of those whose high debt came about because of their greed). Unfair? It definitely looks that way to me.

 

The public sector will soon be seeing massive pay restraint, freezes on recruitment and redundancy - and all to pay for the deficit which came about as a result of greed in the privately run financial sector. That will be at a time (which has been with us for some time now) when their workload is increasing as a result of the same greed.

 

The point is that it's swings and roundabouts and the whole picture has to be looked at, not just one factor.

 

People who, in the 1980s and 1990s, chose the opposite course to me and moved to the private sector, because they thought they would get more out of it, may well now be finding that the advantage they went for was short term only. That is not my fault and is no basis for dragging me and other public sector pensioners down to their level simply because that single factor is "not fair", not unless all the other unequal factors are balanced at the same time.

 

Graham

[CliveH]

Tom - meant to add that employers NIC has no upper limit.

 

So what I said was correct re the employers saving and possible reinvestmet into pension

[CliveH]

So on that basis

 

"That is not my fault and is no basis for dragging me and other public sector pensioners down to their level simply because that single factor is "not fair", not unless all the other unequal factors are balanced at the same time."

 

Are you say that it is fair to penalise one group of pension investors but not another, who just happen to belong to the group that makes the rules?

 

[Guest Tracker]

GJH - 2010-03-16 1:51 PM

 

The public sector will soon be seeing massive pay restraint, freezes on recruitment and redundancy - and all to pay for the deficit which came about as a result of greed in the privately run financial sector.

 

Graham

 

 

Whether or not the public sector enjoys the restraints Graham mentions depend on a number of things not least of which is the power of the unions and the weakness of successive governments in curbing them.

 

The size of the civil service and government involvement in all of our lives stems from a control freak government intent of creating a huge public sector to control us all which also had the effect of making the unemployment figures look a lot better than they should be looking!

 

Too many people not doing wealth creating work has been the downfall of our economy as much as the debt fed boom times.

 

Not to mention of course that who else but civil servants will decide what jobs are lost and where and when and also what pension 'rationalisation' - if any - takes place - turkeys and Christmas again?

[GJH]

CliveH - 2010-03-16 2:00 PM

 

So on that basis

 

"That is not my fault and is no basis for dragging me and other public sector pensioners down to their level simply because that single factor is "not fair", not unless all the other unequal factors are balanced at the same time."

 

Are you say that it is fair to penalise one group of pension investors but not another, who just happen to belong to the group that makes the rules?

No. I am saying that it not right to drag one group down just because, at a particular moment in time, they are doing better than another group as regards one of many factors. If one inequality is to be balanced then all other inequalities need to be balanced at the same time.

 

Graham

[GypsyTom]

For Clive H

I admit to being out of touch but I still don't understand something. 

If my firm puts £10,000 into a pension for me are you saying that in two years I can draw out £10,000 whatever my age?

Now you did say that you can draw out the net contribution. What do you mean by that?

If you are only allowed to draw out the £10000 less the tax that you would have paid then this is the point that I was making about people being reluctant to raid their pension pot as there is a penalty to pay. Drawing it out you may only get £6000 but if you leave it in it remains at £10000.

If I can draw out the entire £10000, tax-free, I'd like to know why my expensive accountant hasn't told me about this amazing loophole!

[GJH]

Tracker - 2010-03-16 2:01 PM

 

Whether or not the public sector enjoys the restraints Graham mentions depend on a number of things not least of which is the power of the unions and the weakness of successive governments in curbing them.

 

The size of the civil service and government involvement in all of our lives stems from a control freak government intent of creating a huge public sector to control us all which also had the effect of making the unemployment figures look a lot better than they should be looking!

There is certainly some truth in that but possibly more in lack of efficiency. Someone mentioned bloat earlier in the thread and much of that is due to the fact that different elements of (politically driven) legislation preclude efficiency by artificially maintaining separate departments/sections.

 

Too many people not doing wealth creating work has been the downfall of our economy as much as the debt fed boom times.

Big subject - with several conflicting theories :-) I do recall, though, proving in a thread last year that I created wealth as a software developer in local government :-D

 

Not to mention of course that who else but civil servants will decide what jobs are lost and where and when and also what pension 'rationalisation' - if any - takes place - turkeys and Christmas again?

In the public sector it can't be any other than civil servants/local government officers (and their political masters) who make the decision. More likely the political masters, in the same way as they decide to save banks and car manufacturers and let places like Teesside Cast Products go to the wall.

 

Graham

[CliveH]

Quite so!

 

I just fail to see how anyone - yourself included can possibly defend a group of rule makers who deliberatly set out to design a tax that affects everyone else but themselves.

 

If you are talking about the "many factors" we are not just talking of one. The Public Sector enjoys a great many benefits, including generous sick pay, ill health retirement benefits, spouses and children pensions if you die before retirement, and of course the Final Salary index linked pension and tax free cash lump sum.

 

All benefits that can be bought by individuals in the private sector - not provided as part of the terms and conditions for a Civil Servant.

 

Methinks those that protest how hard done by the public sector is protest a tad too much! Even if the salaries were a bit lower in the past to compensate - they are not now!

 

So exactly why should I have my pension fund taxed when the public sector does not?

 

Still waiting for an answer on that

 

Lots of beating about the bush and talk of "many factors" but the fact remains that the tax is a stealth tax that affects all but those that make the rules.

 

 

[Big Momma]

CliveH - 2010-03-16 12:39 PM

 

 

you neatly ignore the job security and other benefit packag items that the public sector enjoy.

 

 

What job security, you seen the number of reduncies going on at the moment in the Civil Service ? The PCS Union have just had their members out on strike because the Government are amending the Civil Service Compensation Scheme, basically getting rid of people on the cheap ! And to what other benefit packages do you refer ? pray do tell as I may be missing out on something here (lol)

[CliveH]

Hi Tom - upper case again for ease - not shouting!!

 

“I admit to being out of touch but I still don't understand something.

 

If my firm puts £10,000 into a pension for me are you saying that in two years I can draw out £10,000 whatever my age?”

 

NO – I NEVER SAID THAT – PLEASE READ WHAT I SAID.

 

“Now you did say that you can draw out the net contribution. What do you mean by that?”

 

IN THE FIRST TWO YEARS OF BEING A MEMBER OF AN OCCUPATIONAL SCHEME IF YOU LEAVE THE SCHEME YOU CAN ASK FOR AND GET YOUR NET CONTRIBUTIONS BACK. SO IF YOU HAD CONTRIBUTED £1000 AS THE TOTAL GROSS CONTRIBUTIONS YOU COULD GET A FEFUND OF £800. THIS APPLIES WHATEVER YOUR AGE.

 

“If you are only allowed to draw out the £10000 less the tax that you would have paid then this is the point that I was making about people being reluctant to raid their pension pot as there is a penalty to pay. Drawing it out you may only get £6000 but if you leave it in it remains at £10000.”

 

I THINK YOU NEED TO READ AROUND THE SUBJECT A BIT MORE TOM. BECAUSE WHAT YOU SAY HERE MAKES NO SENSE AT ALL!

 

YOU CANNOT DRAW OUT MONEY FROM YOUR PENSION LIKE YOU INFER. HAVE TO SAY I HAVE NO IDEA WHAT YOU ARE ON ABOUT HERE. AFTER A-DAY ON THE 6TH APRIL 2006 ALL NEW SCHEMES ALLOW 25% TAX FREE CASH TO BE TAKEN FROM A SCHEME AFTER AGE 50. FROM APRIL 6TH THIS YEAR THAT CHANGES TO AGE 55

 

SOME SCHEMES (s32’s, CIMPS, COMPS, SSAS’s EPP’S AND MOST OTHER OCCUPATIONAL SCHEMES) THAT HAVE NOT ADOPTED POST A-DAY RULES CAN STILL APPLY THE 3n/80TH OF FINAL SALARY TAX FREE CASH CALCULATION -WHERE n = THE NUMBER OF YEARS SERVICE.

 

SO WITH SOMNE SCHEMES, WHERE A GUY HAS A PENSION POT OF £50,000, AND A FINAL SALARY OF £40,000 AND 30 YEARS SERVICE THEN THE TAX FREE CASH WILL BE :-

 

3 X 30 / 80 = 1.125

 

So tax free cash is 1.125 times final salary = 1.125 x £40,000 = £45,000

 

Or 90% in this case. - So like I say – taking advice on pensions really is a rather good idea and a bad idea is assuming one knows all the answers and reading what you want to see – not what is actually there.

 

 

 

SO, - GOING BACK AND EXPANDING ON MY EXAMPLE, IF A COMPANY DIRECTOR CONTRIBUTS £100,000 INTO A PENSION (VIA SALARY SACRIFICE, PERSONAL CONTRIBUTIONS WHATEVER) THEN THE RULES ALLOW THE PENSION PLAN TO BUY A PROPERTY UP TO THE VALUE OF 50% OF THE SUM HELD WITHIN THE PENSION.

 

SO THE DIRECTOR COULD PAY A NET CONTRIBUTION OF £60,000, WHICH BECOMES A GROSS CONTRIBUTION OF £100,000, WHICH DRIVES OUT THE ABILITY OF THE PENSION SCHEME TO PURCHASE A COMMERCIAL PROPERTY TO THE VALUE OF £50,000.

 

“If I can draw out the entire £10000, tax-free, I'd like to know why my expensive accountant hasn't told me about this amazing loophole!”

 

TWO REASONS TOM. ACCOUNTANTS ARE NOT FINANCIAL ADVISERS AND CAN ONLY TELL YOU WHAT YOUR TAX LAIBILITY IS AFTER YOU HAVE DONE WHAT YOU HAVE DONE. A PENSION SPECIALIST IFA, CAN HELP A CLIENT PLAN TO BE MORE TAX EFFICIENT.

 

SO SORRY TO SAY THIS TOM, BUT THE SECOND AND MAIN REASON NO ONE HAS TOLD YOU IS BECAUSE WHAT YOU ARE READING INTO WHAT I SAY IS NOT WHAT IS ACTUALLY WRITTEN.

 

WHERE HAVE I EVER WRITTEN THAT ANYONE CAN DRAW OUT “the entire £10,000, tax free”?

 

No idea how you came to that conclusion without reading what is not there mate!

 

Sorry but no other way to say it.

 

[GJH]

CliveH - 2010-03-16 3:32 PM

(snip)All benefits that can be bought by individuals in the private sector - not provided as part of the terms and conditions for a Civil Servant.

 

As pointed out by someone earlier in this thread, civil service pensions - like my local government one - are contributory. That means that we pay towards them. Just because they are not purchased from a third party doesn't mean they are free.

 

So exactly why should I have my pension fund taxed when the public sector does not?

 

Still waiting for an answer on that

For the same reason that I received a smaller salary in local government than I should have had I been doing the same job in the private sector - because that is the way it is at the moment. As I pointed out earlier, things change all the time and sometimes the effect is unequal.

 

Lots of beating about the bush and talk of "many factors" but the fact remains that the tax is a stealth tax that affects all but those that make the rules.

Rulemakers in this one case, yes - but, again as pointed our earlier, the people who made the rules which led to final salary schemes being scrapped in many companies were the companies themselves, nothing to do with the civil service.

 

If public sector jobs are so much better than those in the private sector then why aren't people deserting the private sector and laying siege to town halls and government offices in search of jobs?

 

Graham

[Big Momma]

GJH - 2010-03-16 4:25 PM

 

 

If public sector jobs are so much better than those in the private sector then why aren't people deserting the private sector and laying siege to town halls and government offices in search of jobs?

 

Graham

 

Because at the end of the Financial Year when the Private Sector add up their profits they then pay their employees a nice bonus on top of their salary. Can't recall when a public sector worker got an annual bonus *-)

[CliveH]

Sorry Graham but you are fooling yourself if you think that the requirement for funded pensions to pay £5Billion to £8Billion tax out of their funds had no effect on the Trustees of those schemes seeking to change them from Final Salary (Defined benefit) to Defined Contribution schemes.

 

It is telling that despite all the reports in the media that Private Sector Final Salary pensions are currently £100 Billion in deficit:-

 

http://www.pensions.co.uk/news/2009/Dec/100-billion-pound-debt-for-final-salary-pension-schemes.html

 

- no mention is made by those in the Civil Service Final Salary pension scheme that their pension scheme is not, nor can it ever be in deficit.

 

Because whatever the liability, the tax payer picks up the tab.

 

One way that the tab was picked up was by the civil servants organising an annual tax raid on the funds held within Private sector pensions both Defined contribution and Defined benefit.

 

As I keep saying - this raid was unexpected and created a huge discrepancy between public and private sector pension provision. A discrepancy set up by those that make the rules and enjoy a guaranteed pension that is entirely funded out of the tax take.

 

No need for them to worry about deficits. The good old tax payer will always stump up because the Civil Servants lay down the rules that tell the tax payers what taxes they WILL pay!

 

Hardly equitable tho' is it?

 

[GypsyTom]

Now you are really confusing me.

I said:

Money locked in a pension is much harder to access and the cost is too great for any sensible person, so they tend to leave it there. 

Your reply was:

 

NOT REALLY TO THE FIRST POINT AND “WHAT COST” ARE YOU TALKING ABOUT RE THE SECOND POINT? 

I thought that was obvious. If you or your employer puts £1000 into a pension fund then it's £1000.

But if you draw it out early you have a tax penalty to pay. The point that I was making here is that this will surely discourage people from raiding their pension pot!

I said this:

"The cost of taking money from a pension fund at an early age is that you will have to pay the tax back! You cannot get tax relief by putting money into a pension fund and then withdraw it five years later say, without a penalty! It's this penalty that would put off someone from raiding their pension fund. Is this not the case?" 

You replied:

 

No it isn't. Company pension schemes will allow you to take the net contributions out if you leave the scheme within 2 years - not 5. 

That's my point I think - the net contributions! So if you or a company puts £1000 into a pension fund for you (gross) and you draw it out two years later you don't get the £1000, you get £1000 less tax so that's the penalty surely!

I go back to one of the main advantages of having a pension, which is that there is a discouragement from raiding it, because it remains at a gross figure if you leave it in the fund.

If however, you shun a pension and invest in ISAs or whatever and you run into a lean period, the temptation to draw from what is supposed to be your old age security, is greater. If you've £10,000 in an ISA, you'll get £10,000, but if you've put £10,000 gross in a pension and draw it early, you won't get £10,000.

[CliveH]

 

No Tom it is not a penalty.

 

If you earn £100 and you pay basic rate tax then you pay £80 into a pension fund as your net contribution. The tax man says, "OK - you give up receiving £80 of your net salary because you want to save it for your retirement income therefore we will not charge you income tax and so will give you the £20 back so you can invest the full £100 gross into your pension."

 

In the UK the rules state that if you join a company and their pension scheme but you leave within the first two years then you can either leave the full pension in the pension scheme or you can if you wish ask for and get the salary that you contributed into the scheme. If you do this, then income tax is charged on that salary rebated out of the pension scheme in the same way as it would be charged on any income you earn.

 

The 20% is not a penalty; it is just the tax all basic rate taxpayers have to pay. If that person then joined the pension scheme of their new employer then they could take the net amount rebated to them from their old employers scheme and by placing it in the new companies pension scheme reclaim the tax they just paid!

 

As such this is a clear demonstration that this is not a "penalty" - it is simply a function of the tax rules.

 

Again - sorry Tom - but you started talking as tho I had originally said that a person could withdraw "£10,000 out of a pension within the first 5 years"

 

I did not know then and I do not know now, how you could possible read that into what I actually said because you then go onto say in your last post:-

 

"That's my point I think - the net contributions! So if you or a company puts £1000 into a pension fund for you (gross) and you draw it out two years later you don't get the £1000, you get £1000 less tax so that's the penalty surely!"

 

And as I have explained - it is not a penalty - just a function of the tax rules - and please do not forget that my "No it isn't" response was only partly to do with this point. The other part was to correct your statement that the time period was 5 years when this rebate of contributions only applies for the first two years of employment.

 

As for your last paragraph:=

 

"If however, you shun a pension and invest in ISAs or whatever and you run into a lean period, the temptation to draw from what is supposed to be your old age security is greater. If you've £10,000 in an ISA, you'll get £10,000, but if you've put £10,000 gross in a pension and draw it early, you won't get £10,000."

 

Yes the temptation to access the ISA is there - but some can handle it and some can not. If you lose your job and keeping your family home together requires capital, believe me there are many out their that are glad to have funds in ISA's that they can dip into to pay the mortgage in bad times.

 

Fat lot of good having £'thousands locked away in a pension fund and you and your family lose your home!!

 

But this is what financial planning is all about. There are no hard and fast rules and pensions are good for some but believe me they are no financial panacea.

 

As for your last sentence:-

 

"If you've £10,000 in an ISA, you'll get £10,000, but if you've put £10,000 gross in a pension and draw it early, you won't get £10,000."

 

Seems like you are trying to advocate the better value of ISA's to me!!

 

Especially as with an ISA you can take your income tax free whereas you will pay tax on the income from a pension annuity.

 

Plus the fact that if you (and your spouse in a joint life annuity) die after setting up your annuity in the early years, your £10,000 is used to pay the annuity of those who live longer than you. People who you have never met and do not know.

 

So if you think pensions somehow guarantee the value of the fund - they don't!

 

In contrast if you die early with an ISA, at least the fund is then distributed to who you WANT it to go to.

 

A lot of people prefer that.

 

 

 

 

 

[GJH]

CliveH - 2010-03-16 4:52 PM

 

Sorry Graham but you are fooling yourself if you think that the requirement for funded pensions to pay £5Billion to £8Billion tax out of their funds had no effect on the Trustees of those schemes seeking to change them from Final Salary (Defined benefit) to Defined Contribution schemes.

 

It is telling that despite all the reports in the media that Private Sector Final Salary pensions are currently £100 Billion in deficit:-

 

http://www.pensions.co.uk/news/2009/Dec/100-billion-pound-debt-for-final-salary-pension-schemes.html

 

- no mention is made by those in the Civil Service Final Salary pension scheme that their pension scheme is not, nor can it ever be in deficit.

 

Because whatever the liability, the tax payer picks up the tab.

 

One way that the tab was picked up was by the civil servants organising an annual tax raid on the funds held within Private sector pensions both Defined contribution and Defined benefit.

 

As I keep saying - this raid was unexpected and created a huge discrepancy between public and private sector pension provision. A discrepancy set up by those that make the rules and enjoy a guaranteed pension that is entirely funded out of the tax take.

 

No need for them to worry about deficits. The good old tax payer will always stump up because the Civil Servants lay down the rules that tell the tax payers what taxes they WILL pay!

 

Hardly equitable tho' is it?

Of course, private sector pension deficits are nothing to do with boosting profits by cutting costs and nothing to do with contribution holidays when times were good are they? :-)

 

No, it isn't equitable but it is only one of many unequal factors.

 

As I said before, it is not right to drag one group down just because, at a particular moment in time, they are doing better than another group as regards one of many factors. If you apply the approach you advocate to other matters it is easier to see the flaws.

 

Take, for instance, the problem of height barriers. Because motorhome owners were suffering and others were not then the solution would be to close all car parks - which would benefit nobody and cause many a great deal of hardship.

 

The way to address problems of inequity is to remove the problem, not visit it on everyone.

 

Graham

[CliveH]

Hi Big Momma

 

Private sector bonuses - banking certainly (lol) (lol) - tho that is hardly a laughing matter in my book :-S

 

As for Public Sector bonuses????? ;-

 

 

 

"Anger at £130m civil service bonuses

 

By Craig Woodhouse, Press Association

 

The Independent – 23rd December 2009

 

Opposition parties demanded reform of Whitehall's bonus culture today after research revealed civil servants shared payouts of almost £130m last year.

 

The Tories said bonuses should be paid to civil servants who save taxpayers money, while the Liberal Democrats described the figures as "insensitive" and said Government workers should not be immune from the effects of the recession.

 

Full article here:-

 

http://www.independent.co.uk/news/uk/politics/anger-at-pound130m-civil-service-bonuses-1848988.html

 

 

 

[CliveH]

Graham !

 

PLEASE PLEASE PLEASE actually read what you say and then have the good grace to apply it to the situation in hand!

 

You say:-

 

"As I said before, it is not right to drag one group down just because, at a particular moment in time, they are doing better than another group as regards one of many factors. If you apply the approach you advocate to other matters it is easier to see the flaws."

 

I TOTALLY !@&*)+~#'ING AGREE!!!

 

It is NOT right to drag one group down because at a particular moment in time, they are doing better than another group!

 

But that is exactly what the Civil Service rule makers did when they set up a tax that was selective to only the private sector!

 

How can you write that in defence of what happened when it was exactly that negative selection against the private sector pensions that caused the ruddy issue in the first place!!

 

This really is pot calling kettle black!

 

Can you not see this????

 

 

[GJH]

CliveH - 2010-03-16 6:19 PM

 

Graham !

 

PLEASE PLEASE PLEASE actually read what you say and then have the good grace to apply it to the situation in hand!

I always read what I say before posting - even remember to spell check it most of the time :-)

 

You say:-

 

"As I said before, it is not right to drag one group down just because, at a particular moment in time, they are doing better than another group as regards one of many factors. If you apply the approach you advocate to other matters it is easier to see the flaws."

 

I TOTALLY !@&*)+~#'ING AGREE!!!

 

It is NOT right to drag one group down because at a particular moment in time, they are doing better than another group!

Hmm. That seems to be rather different from your earlier post where you said "So exactly why should I have my pension fund taxed when the public sector does not? " Rightly or wrongly, I read that as saying that the public sector should be taxed more so that they suffer the same as the private sector.

 

But that is exactly what the Civil Service rule makers did when they set up a tax that was selective to only the private sector!

 

How can you write that in defence of what happened when it was exactly that negative selection against the private sector pensions that caused the ruddy issue in the first place!!

 

This really is pot calling kettle black!

 

Can you not see this????

 

I've been looking back through this thread trying to find a reference to the tax change but can't find one. Doing some Googling all I can come up with is the abolition of Advance Capital Tax (ACT). Depending on whose view one reads that is either a stealth tax introduced by Brown or a continuation by Brown of a policy started by Lamont in 1993.

 

Either way, whoever came up with it (be they politicians or civil servants) it would appear to be politically acceptable (i.e. not a problem) to both Tories and Labour (when they form the government, rather than opposition, at least). If, however, one does deem it to be a problem then the question is how does one deal with it?

1) Introduce a measure which would hit public sector pensions (akin to closing the car parks) or

2) Reinstate ACT so that the private and public sectors are equal (akin to removing the height barriers).

I would always advocate the latter approach. That is not the same as defending the creation of the problem and I can't see anywhere in my previous postings where I have mounted such a defence.

 

Graham

[Big Momma]

CliveH - 2010-03-16 6:10 PM

 

Hi Big Momma

 

Private sector bonuses - banking certainly (lol) (lol) - tho that is hardly a laughing matter in my book :-S

 

As for Public Sector bonuses????? ;-

 

 

 

"Anger at £130m civil service bonuses

 

By Craig Woodhouse, Press Association

 

The Independent – 23rd December 2009

 

Opposition parties demanded reform of Whitehall's bonus culture today after research revealed civil servants shared payouts of almost £130m last year.

 

The Tories said bonuses should be paid to civil servants who save taxpayers money, while the Liberal Democrats described the figures as "insensitive" and said Government workers should not be immune from the effects of the recession.

 

Full article here:-

 

http://www.independent.co.uk/news/uk/politics/anger-at-pound130m-civil-service-bonuses-1848988.html

 

 

 

Did the article say just how many 'civil servants' are anticipated to receive this bonus ? Not very many I would suggest and those that do will be hand selected and in a very selective job band so not fair to put all civil servants under this banner :-S

[Guest Tracker]

Big Momma - 2010-03-16 7:34 PM

Did the article say just how many 'civil servants' are anticipated to receive this bonus ? Not very many I would suggest and those that do will be hand selected and in a very selective job band so not fair to put all civil servants under this banner :-S

 

Probably the same ones who will decide the future size and pay and benefits structure of the civil service - back to turkeys and Christmas again!

[CliveH]

 

Hi Graham

 

"Hmm. That seems to be rather different from your earlier post where you said "So exactly why should I have my pension fund taxed when the public sector does not? " Rightly or wrongly, I read that as saying that the public sector should be taxed more so that they suffer the same as the private sector. "

 

No I have never said that - you (and most other Civil Servants always assume the only way to solve a problem is to tax everything!!!

(lol)

 

No what I want is for the tax raid on funded pensions to stop because it IS SELCTIVE! - I would find a tax reduction on Tax Free Cash or some kind of limit to higher rate tax relief on ALL pensions - both Private AND Public sector to be the only way forward.

 

And yes you are correct in the audit trail of this pernicious tax. Tho' what Lamont did was for a good reason but like all such disasters the road is paved with good intentions. What was happening during Lamonts time was incredible growth within investments and pensions. A real boom time.

 

This had the unfortunate effect of making some companies vulnerable to aggressive takeovers where the company is broken up and sold off in bits but the pension fund is left as a huge profit.

 

Now Lamont in his wisdom decided that the way to tackle this was to tax the excess funds in pensions (this is where I hold head in hands, put head between knees and hop about like a frog al la Basil Fawlty) - and it worked of course - the assets were taken by the tax man so that when the downturn came there was the start of the pension deficit culture.

 

Then when things got a little better again, Gordon was in charge and his Civil Servants convinced him that the past raid on pensions was so good, that he should make it and annual event!

 

So - looks like we are in agreement ;-

 

" I would always advocate the latter approach. That is not the same as defending the creation of the problem and I can't see anywhere in my previous postings where I have mounted such a defence. "

 

I did infer from your words that you were basically saying "so what" and am delighted if once again we find that in reality we think pretty much the same but from a differing viewpoint :-D