Public Sector Pensions - One argument does not fit all

We are going to hear so much about public sector pensions in the next few days and here are my thoughts for what it is worth.

Pensions affect every working person so it will be impossible to please everyone with a new policy.  Even one as simple as saying you just have to work longer.

What really gets me annoyed is when people go on about how good the pensions are in the public sector when what they really mean is how unbelievably BAD pensions are in the private sector.  I do not begrudge the public sector worker for receiving a decent pension.  Mind you there is a problem with this argument already in that some private sector pensions are brilliant, especially for top private sector bosses in their 50s who are basically paid in pension contributions as a way of keeping costs down and not paying tax.  Sir Fred good example.  Why still Sir...?  But for everyone not at the top it is pretty poor.

Poor Private Sector Pensions. 

Not compulsory
For a start they are not compulsory.  I know that sounds a bit draconian but in Australia they have a great system in that your contributions are compulsory as soon as you start work.  When you are in your 20s the last thing you want to do is save for a pension but ironically that is when saving has the biggest benefit! Compound interest etc.

If you work in a company of less than 5 people the company does not even have to have a pension scheme.  Hundreds of thousands of people have no pension at all. 

Not diversified enough
I am appalled when I hear that people who are nearing retirement are told that their pension is less because the stock market has taken a bashing.  Any person saving for retirement can take risks at the beginning but should not take risks at the end.  Some say it is their choice but I am not sure if they have been told of the risks.  They should have their funds diversified across all asset classes, property, gilts, shares, cash, commodities, etc.  I would not object to high managment fees if they actually managed them a bit better rather than just following indexes.

Not informed enough.
Are people aware that if you put in £10 the govenment puts in minimum £2.50. Yes it is a tax relief but all the same it should be compared to saving in an account which is after tax...  No wonder the higher rate tax payers use this relief to the max.  Lower income people dont really realise this I think.

The big one: 
The stock market has underperformed incredibly in the last 12 years!  in 1999/2000 the stock market peaked at 6750  err it is now at c.5200.  Meanwhile houses however have gone up 3 fold.  Pensions are not allowed to invest in the residential market....  People did anyway with buy to let and fed the feeding frenzy.  Who were the big winners?  People with several thousands of capital or family money who could get on this ladder and of course the banks who lent all the money.  Note lent.  Pension funds do not have to borrow money as they have the contributions to invest. People have forgotten that a share was called a share as the owner was meant to share in the success of the company.  So many companies just seem to try and get as big as possible and pay the top bosses as much as possible.  The M&A boom throughout the "nougties" mean fat fees for banks and private equity investors made a killing without paying much tax.

I am not going to go into the complexity of the public sector pensions as they are all quite different with some doing well and others not so well.  Some funded, some not.  Most public sector workers have been seriously underpaid over many years and some overpaid in more recent years.  Some public sector workers pay higher proportion of their salaries than others.  Finally some public sector workers can easily work later in life until 67 or so and some most definitely not. 

Three is not enough

The poor girl whose parents were killed by Pol Pot's regime in Cambodia said that 3 is not enough!  what was she was referring to?  Well it is the total number of people that are being charged in a cambodian court over the atrocities of the Khmer Rouge committed in the 1970s.  The film the Killing Fields brought the horror of the regime to our screens in the 1980s.  It was estimated that over 1 million people died of starvation and torture during the "Agrarian Revolution" that forced people from the cities into the countryside to serve the state.

It seems so many atrocities in the 20th Century on a massive scale such as the Holocaust, Ethnic Cleansing in former Yugoslavia, Rwandan Genocide, Mass starvation from ill conceived policies and wars go unpunished.  The Nuremburg trials following WW2 didn't really dish out justice and it doesnt look like Cambodia will get its justice either.

St Pauls Protest

I decided that it was time to go and see the protesters at St Pauls as I have a lot of sympathy with some of their gripes. 

What I agree with;

The need to address the increasing disparity between boardroom pay and workers.
The need to stop climate change and how it is impacting on the poorer countries
The corrupting power of money and the temptation of debt.  Usury used to be a sin!
The human race need more compassion and less greed.
The financial system should be serving the economy and not serving itself.

What I don't agree with;
Capitalism is evil and doesn't work.  It is the best of a bad bunch though.  Communism, anarchy, nationalism, facism, totalitarianism.  
Rule by consensus.

The border agency dispute

Isn't it odd that Brodie didn't get anything in writing from Teresa May when he decided to relax the border controls on entering the UK....

Something that affects the security of the realm seems to have been chatted about over the phone!!! 

New World Disorder

M5 Motorway Tragedy

Will the motorway tragedy of last week puncture the hopes of the petrolheads to increase the speed the limit?

Perhaps.  The faster you are going the more likely you are to get hurt in an accident.  It is pretty simple really.  The problem is that is speed actually causing more accidents?  Not sure.  The thing is that it is stupid driving that causes accidents.  Today I saw someone going too fast but it wasn't the speed that was the problem it was the fact he crossed 3 lanes without indicating and drove up the backside of the other cars...  I suppose it is a bit like the  old argument people have with violence on TV.  Bad drivers tend to go fast but going  fast doesn't make you a bad driver..

If we are to have a speed limit then it needs to be applied at the right times.  If it is dark, wet and foggy then a speed limit of 60mph is reasonable.  If it is early in the morning no one around in the summer with clear visibility then 90 not a problem. 

variable speed limits have really improved safety on the M25 so why not apply them on other motorways.  The signs can be powered by solar power and wind.