Monday, Jan 04, 2010
Crass cliche of the year awards
FT: Good year for management guff
A bit off-topic but a, like, reality check for the private-sector-is-beautiful boys here. See the link to the Gazprom song - it's a gas all right. A game of two halves.
Posted by letthemfall @ 10:28 AM (740 views) Add Comment
20 Comments
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1. flashman said...
The public sector is chock full of low-grade jobsworths. Millions of tales of profligacy and crappy service can’t be wrong. We’ve all got our own experiences. To deny this is lunacy.
The private sector is brimming with lazy incompetents and mindless pen pushers. Half the tradesmen in this country are dishonest tax dodgers and so are countless finance workers.
People are crap, so it is ridiculous to keep arguing about who is the worst. It’s boring and pointless. What’s the agenda?
2. techieman said...
happy new year flash! I think LTF is just trying to put some balance to this : http://www.housepricecrash.co.uk/newsblog/2010/01/blog-sounds-like-zimbabwe-27115.php.
However really i think you are right - we have dealt with this many times, and to be perfectly fair, although my experience of public sector employees suggests otherwise, i have softened my view to a more "we are all in this together" and there are good and bad in all walks of life, as you suggest, essentially because of the views put forward by LTF.
I think there is a political agenda where this is subtlety put forward by the press. I asked an open question on that thread re pensions because i would really be interested if my perception is right or if i am a victim of a subliminal press campaign!!!
I assume this is a fleeting visit Flash - hope you had a good festive season.
3. ant said...
This is a good song about Gazprom: http://www.youtube.com/watch?v=A7RD5ONjv8M (with subtitles). Hilarious. Enjoy.
4. flashman said...
HNY to you techie. I consider a balanced view to be one where both sides are considered equally by the person presenting the argument. My post @1 could therefore be considered to be balanced (if a little jaundiced). When a person only champions or ridicules one side, then balance is only created when another party takes an opposing and equally polarised stance (daggers drawn is not a very productive way of creating balance). There is nothing inherently wrong with one-sided arguments but the public versus private argument is plain silly, so I find it hard to respect a polarised view on the subject. The public and private sectors are staffed by large numbers of people and ultimately large numbers of people will behave in a similar manner. If one was staffed by Martians and the other from Venus then I could see a point to the argument. Of course I understand that a compulsion to frequently champion the public sector might be born out of an exasperation at the frequency of the ‘one-eyed’ pro private sector arguments.
5. techieman said...
I was just trying to explain why (i think) LTF posted this. Of course i could be wrong - and no doubt he will put me straight if I am - wont be the first time!
i do think we dealt with it though in the post i referred to anyway so it is all bit of a protest. I am not 100% sure if the argument is complete as is or if it forms part of free-market bashing.
I do think the bone of contention is pensions though, how generous (final salary / money pensions) and who pays for them.
6. letthemfall said...
Thanks for your support techieman.
I only posted this article because I thought it was funny, and I can't stand management cliches, or any other kind for that matter. I tend to stand up for the public sector because there is a coterie here who constantly attack it, but obviously from no real understanding or insight. I don't think one is intrinsically better than the other - it would make no sense to take that position - although for myself I have had more bad experiences with private than public in recent years (just wrung some compensation from a ftse100 company after months of faffing about). However, my feeling is that the public sector will become increasingly important in future if we are to become a fairer and healthier society in future.
As for whether the argument is pointless, I think probably all the arguments here are pretty pointless and a way of idling away time I should really spend doing other things.
7. techieman said...
... or even money purchase....(my view is that money purchase really is the only way to go). This is what i posted re the pensions to see what i mean:
"The only place where i think there is a justifiable argument is toward the top end of the public sector and then in terms of final salary pensions. I am personally aware of a council that upped their last three years salary so as to ensure the base of their final salary was inflated. Perhaps that doesn't happen any more, and perhaps pay is set by an independent body - how independent is anyone's guess.
Even though i think the council workers (at the top end) can be criticised for having too much drain on society via their pensions, so too could the higher paid workers in the private sector. However - bankers notwithstanding - there is an argument that they are having that paid for by the business themselves, rather than burdening those (council) tax payers.
i don't know if i am shooting from the hip, but does anyone know how much of council tax is used to fund these pensions... and what the trend has been??"
8. techieman said...
@ 6 - There you go Flash!! You have to give the accused the opportunity to defend themselves! Relative to pensions i had a bit of a shock when i spoke about a pension to my dads provider. As you know i think we are near the top of the retracement from the march lows, so i wanted - for him - to transfer to true cash. He had a with profits pension fund mostly but they now want to deduct about 25% of it for the Market Value Reduction!!
I naively thought that the value would be the bid price of the units - and that that would be sorted by the actuaries...... still seems if they get it wrong they can just redistribute the loss- so really what are they being paid for?? Really outrageous in my view, since there is no transparency, and obviously thats in the private sector!! :-).
9. flashman said...
I can see why people might criticise public sector pensions but in my opinion it is wrong-headed to do so. The average public sector pension is not really enough to live on. Rather than reducing public sector pensions down to an everyone else’s level, we should look for ways of bringing everyone else up. The pension fund industry is an outrageous source of thievery. I know literally hundreds of people who work in the pension industry, and with the exception of the more irascible sorts, they are usually incredulous that they get away with it. Put me in charge of regulation, and I would have it sorted out in two days. Anyone with a little bit of investment knowledge and a basic grasp of mathematics could see that the private pension fund system cannot work. I don't know how to look up previous posts but I have described the mechanics of this system before and discussed solutions
10. techieman said...
"The average public sector pension is not really enough to live on." Agreed which is why i referred to the top end guys only. I wonder how you would bring everybody else's up though, since it surely depends on returns and managers actually performing better than the market.
The public sector pension was based on lump sum of 3/80ths per year of service of "final" salary - "final" being last 3 years and a pension of 1/60th per year of service. So thats a 150% lump sum and a 2/3rds pension if you work "man and boy". Clearly if you are in a position where you can bump up your last 3 years salary you are quids in. Thats how it used to be and im not sure of thats changed???
Re fund managers, i have always been in favour of high performance related bonuses coupled to "average" salaries. In fact at one stage i was looking to create a hedge fund based on that form of charging.
11. techieman said...
sorry average of the last 3 years - not the last 3 years in the aggregate!!!
12. flashman said...
techieman: You might have missed my point. The pension fund management system cannot work no matter how you run it. Any sort of bonus deriving from the management of a pension fund is nonsensical. It is a given that sooner or later a managed pension fund will loose all or most of your money. A bonus payment can therefore only be made on the basis that your money wasn't lost THIS period, so ‘I'm going to subtract a bonus from your pot’. The payment of bonuses actually helps speed up the inevitable process of pension pot destruction
I manage my own pension. The emphasis is always on preserving and compounding my pot (as opposed to speculating). Most pension fund workers do the same. No point in being robbed by the bloke sitting next to you.
13. refusetobuy said...
Flashman, do you feel similarly about hedge fund managers?
i.e. are they a more extreme version of pension fund managers or do any/some/most deserve the 2% of assets + 20% of profits?
14. techieman said...
flash - fair enough. You are saying that the fund is always open, so even a % earned in one year on a profit in that year, because the fund isnt closed after that year, then the people left in will suffer more in the years when markets fall. I suppose the only way this could work would be to make a distribution at the end of each year, to a cash pot and then start again.
Yes a SIPP is sensible (i am surprised though because i thought you would have some kind of top hat final salary sheme) so that the performance of the market is irrelevant. (i.e. just rob the next prospective pensioner bloke, the company or the tax-payer).
15. flashman said...
refusetobuy: I don't have the same passion about hedge fund managers because in theory they are playing with money that comes from people/entities that can afford to lose it, or should know better. However, I do appreciate that this is an old fashioned concept and that hedge funds end up playing with pension money one way or another. Personally I wouldn't put a penny of my cash into a hedge fund. Paying 2% plus 20% (its a bit less these days) is madness and you will be very lucky if you can play the game for any ten-year period without having your trousers taken down.
16. flashman said...
techieman: " i thought you would have some kind of top hat final salary sheme"
I work for a relatively small outfit and have some equity in the place. We decided many years ago to go our own way with pensions (except for employees). I don't earn a bonus. It's really just a regular business with salary and some share of the profits for the owners. We derive nearly all our income from fees, so we thankfully don't suffer from the bonus culture of extracting giant wads of cash from investment activity that might go wrong in the future. It's all terribly unglamorous
17. techieman said...
blimey you said the "b" word - hope you get away with it!!! Have fun!
18. flashman said...
techieman: "I wonder how you would bring everybody else's up though, since it surely depends on returns and managers actually performing better than the market. "
It is mathematically impossible for 'managers' to consistently outperform the market, especially when fees, bonuses and market collapses are taken from the pot. A few might get lucky for a while but 'a few' is not good enough when we are talking about pensions. I would ban the private managed pension industry. A non profit government agency should run pensions and money should only be invested in a wide basket of coupon earning 'solid' instruments There will be occasional mishaps but the deductions will be drastically reduced and massive draw downs avoided. A government ‘contribution matching’ scheme should be put in place to encourage contributions because it is very much in their interest to have solvent pensioners. Compound interest over a large time frame can be quite magnificent (didn’t Einstein say that compound interest was one of the wonders of the world?).
19. techieman said...
Thanks for that Flash... if i didnt "know" you better i would say you were playing to the gallery!!
I am convinced!
Off out now.
20. letthemfall said...
techieman
I think the 2/3 final salary schemes do not make lump sum payments; those that do pay 1/2 final salary, provided you have 40 years contributions. But yes, a big salary, especially a big hike near retirement, pays handsomely, although schemes are now moving over to averaged salaries.
I too think the private pension industry is a racket - some of the fees charged are outrageous, the managers don't manage, and back in the 80s a lot of employers took payment holidays in the belief that markets would rise steeply forever.