Public Sector Pensions Are Affordable And Set The Standard For Others

[Guest absolutezero]

Sorry to correct you Injin.

A thief steals and knows he is doing wrong - they can be forgiven.

Mass murderers and evil dictators steal but think they are doing good - they can only be eradicted.

So now public sector workers are likened to mass murdererd and evil dictators!?

Priceless!

The internet really is full of unhinged loons.

[IMHAL]

Once again. Envy. It's pointless arguing because you will never change your mind so you respond with veiled insults.

Aww didums - workin too hard now - boo hoo. Best get back to your nice cosy office, hat stand and minion of staple clerks that you command. Don't want our GDP falling any more now do we. Twit.

[Guest absolutezero]

So are you for or against Cameron's plan to make public sector pensions defined contribution?

Neutral.

I'll wait and see exactly what's proposed before jumping about screaming, if indeed I scream at all.

[FreeTrader]

Once again. Envy. It's pointless arguing because you will never change your mind so you respond with veiled insults.

Ignore the posts that you feel don't address the point. You're offering a moral and emotional argument against ones based on a reasoning of financial affordability.

I haven't seen you yet put up any numbers or analysis to defend your case that the current contractual public pension regime can be adequately funded. How about refuting the document by Neil Record I posted earlier?

The basis of your defence is simply that critics of the present situation are jealous of the status quo. You keep putting up straw men against posters who have made no comment on the worth and value of public sector employees, or the morality of the contractual obligations.

You have a belief that arguments against the funding adequacy of such pensions are based on envy.

And your career is based on the promotion of the scientific method to your students?

[IMHAL]

So now public sector workers are likened to mass murdererd and evil dictators!?

Priceless!

The internet really is full of unhinged loons.

Read then comprehend - theres a moral in der somewhere.

Edited July 31, 2009 by IMHAL

[Guest absolutezero]

Aww didums - workin too hard now - boo hoo. Best get back to your nice cosy office, hat stand and minion of staple clerks that you command. Don't want our GDP falling any more now do we. Twit.

If that's your view of the public sector you're the twit!

See those chavs in the street causing havoc. Try teaching them in a non-cosy non-office with no staple clerks to help.

[Guest anorthosite]

So now public sector workers are likened to mass murdererd and evil dictators!?

Priceless!

The internet really is full of unhinged loons.

No, just HPC

[Guest absolutezero]

You have a belief that arguments against the funding adequacy of such pensions are based on envy.

And your career is based on the promotion of the scientific method to your students?

1-2% of GDP is hardly "unaffordable".

It's a job. Not a career.

[Injin]

Hitler invaded Poland.

If it really was an imaginary dividing line, WW2 would never have happened.

Just because you don't believe something doesn't mean it's false.

Countries exist.

That piece of land is the United Kingdom. 21 miles away it is France. Keep walking and you reach Belgium.

There's no big line drawn on the floor but you enter someone else's territory and that is what we refer to as a country.

It only exists inside their heads.

That loonies will attack you for not following their delusions doesn't make said delusions real.

Got any actual proof?

[Si1]

fair enough:

(1) indeed I do mean general taxation. If money were taxed from the economy to be invested in a pension fund over 30 years, then this pension fund would, after charges, perform worse than the conomy in which it is invested - left in enterprise and industry. Uniqeuly, the public sector CAN use general taxation, so it is an efficient way of taking an income from the economy most efficiently - defer the taxes till when actually needed. Of course this needs to be managed so not to be too great a proportion.

(2) 7-8% is FTSE index equity-performance. True it is high risk, but remember, for public sector pensions these have very long term obligations, so this risk is spread, and the FTSE average return does indeed represent (I think) real growth of capital and income of the economy. If taxation is deferred then I would personally assign this growth to the money 'left in the economy'for later taxation to actually pay the pensons. Again, providing the amount is not too great. It would be unreasonable for an individual to assume such growth. But we are not talking about an individual, the benefits of scale are real here. We should not hold this against public servants, for all my arguments with them!

indeed, Wayo, if I run 7.5% growth rate instead of your 5% net of costs very crudely, then they more than half pay for themselves, as compared to your estimation of a quarter

also, the 'intrinsic' insurance built into the system is partly financial- and time-scale, and partly the capacity for the govt to cut benefits by hook or by crook where they cannot be afforded.

on that basis the money can be largely clawed back - but some of it is indeed deserved and earned. I do hope that if the tories DO implement a money-purchase defined-contribution scheme for the public sector, that it gets very low charges on the scheme for members, and preferential income/annuity rates at maturity. For all my bluster, I do value the public sector and feel that tho costs need managing, some perks - and thanks, and help - should still be in order for what they do.

Edited July 31, 2009 by Si1

[IMHAL]

If that's your view of the public sector you're the twit!

See those chavs in the street causing havoc. Try teaching them in a non-cosy non-office with no staple clerks to help.

My wife is a teacher - even she knows that state pensions are unaffordable and that salaries have crept up too high in recent years.

How? she sees the 'common' man working and he earns less, has job insecurity, worse working conditions and will never afford the pension that she has - thats how.

Now defend your position that public sector pensions are affordable!!!

[Wayo]

fair enough:

(1) indeed I do mean general taxation. If money were taxed from the economy to be invested in a pension fund over 30 years, then this pension fund would, after charges, perform worse than the conomy in which it is invested - left in enterprise and industry. Uniqeuly, the public sector CAN use general taxation, so it is an efficient way of taking an income from the economy most efficiently - defer the taxes till when actually needed. Of course this needs to be managed so not to be too great a proportion.

(2) 7-8% is FTSE index equity-performance. True it is high risk, but remember, for public sector pensions these have very long term obligations, so this risk is spread, and the FTSE average return does indeed represent (I think) real growth of capital and income of the economy. If taxation is deferred then I would personally assign this growth to the money 'left in the economy'for later taxation to actually pay the pensons. Again, providing the amount is not too great. It would be unreasonable for an individual to assume such growth. But we are not talking about an individual, the benefits of scale are real here. We should not hold this against public servants, for all my arguments with them!

Then you indulge in weasel words....

Pensions paid from taxation are unfunded. You cannot continue to raise taxation to pay for the public sector until the ever increasing pension liabilities are met in the distant future. A scheme reliant on future pensioners paying for current pensions is a pyramid scheme. The only way to properly fund your retirement is for you and your employer to put enough money in the fund in the first place, equitably a 50/50 split. That means at least 10-12% of your pay for each year of benefits, preferably with an upper cap beyond which salary there will be no further employer contributions. It is already far beyond being manageable in the way you describe.

Taxpayers will not continue to stand for this - it is the whole essence of the argument. Nobody has a choice over taxation, it is legalised theft of property sanctioned by imprisonment yet people like yourself describe it like some bottomless slush fund with no regard to the affairs of those that pay for it. There will come the time when you exceed the consent of the electorate. Perhaps when the public sector cuts come we will see some rebalancing from pensions back into services. It is 8 years since we managed to balance a budget in the UK.

[Guest absolutezero]

It only exists inside their heads.

That loonies will attack you for not following their delusions doesn't make said delusions real.

Got any actual proof?

Yes. Several million deaths between 1939 and 1945.

Got any "disproof"?

The only one deluded is you, Injin.

If I pointed out a tree, would you argue the tree doesn't exist and it's just a collection of photosynthetic cells, and what I call a tree is a delusion?

[Guest absolutezero]

My wife is a teacher - even she knows that state pensions are unaffordable and that salaries have crept up too high in recent years.

How? she sees the 'common' man working and he earns less, has job insecurity, worse working conditions and will never afford the pension that she has - thats how.

Now defend your position that public sector pensions are affordable!!!

Then I suggest your wife resigns immediately and gets a job in the private sector.

They are not, I repeat, NOT unaffordable at 1-2% of GDP.

It's not that her deal is good (because it really isn't THAT good), it's just that people are shat upon by their rich employers.

[Injin]

Yes. Several million deaths between 1939 and 1945.

Got any "disproof"?

So all relgious wars comprise a definitive proof for god, do they?

The only one deluded is you, Injin.

If I pointed out a tree, would you argue the tree doesn't exist and it's just a collection of photosynthetic cells, and what I call a tree is a delusion?

That's a lto fo work to justify being a thief. Why not just not steal?

[Si1]

Then you indulge in weasel words....

Pensions paid from taxation are unfunded. You cannot continue to raise taxation to pay for the public sector until the ever increasing pension liabilities are met in the distant future. A scheme reliant on future pensioners paying for current pensions is a pyramid scheme. The only way to properly fund your retirement is for you and your employer to put enough money in the fund in the first place, equitably a 50/50 split. That means at least 10-12% of your pay for each year of benefits, preferably with an upper cap beyond which salary there will be no further employer contributions. It is already far beyond being manageable in the way you describe.

Taxpayers will not continue to stand for this - it is the whole essence of the argument. Nobody has a choice over taxation, it is legalised theft of property sanctioned by imprisonment yet people like yourself describe it like some bottomless slush fund with no regard to the affairs of those that pay for it. There will come the time when you exceed the consent of the electorate. Perhaps when the public sector cuts come we will see some rebalancing from pensions back into services. It is 8 years since we managed to balance a budget in the UK.

indeed - therein lies the achilles heel...

[IMHAL]

1-2% of GDP is hardly "unaffordable".

It's a job. Not a career.

I know lots of teachers like you "its a job not a career" - they are the ones who should be fired but never are, since no one ever gets fired.

What is it? - out of >10,000 teachers less than 10 get fired each year - wow! So - not really a challenge to keep down a job like that is it. The taxpayer should be very grateful of your voluntary careership. Bonuses all round.

[Wayo]

indeed, Wayo, if I run 7.5% growth rate instead of your 5% net of costs very crudely, then they more than half pay for themselves, as compared to your estimation of a quarter

also, the 'intrinsic' insurance built into the system is partly financial- and time-scale, and partly the capacity for the govt to cut benefits by hook or by crook where they cannot be afforded.

on that basis the money can be largely clawed back - but some of it is indeed deserved and earned. I do hope that if the tories DO implement a money-purchase defined-contribution scheme for the public sector, that it gets very low charges on the scheme for members, and preferential income/annuity rates at maturity. For all my bluster, I do value the public sector and feel that tho costs need managing, some perks - and thanks, and help - should still be in order for what they do.

Sounds wildly optimistic to me. Over what period are you measuring returns? The recent bull and bear runs have very much skewed things. What is the average investment fund return since say 1960? Most don't make parity with the FTSE in any case. Where are your figures? No pension fund would go 100% into equities nor have zero costs.

Real economic growth would be around 2-3% GDP in real terms that would presumably serve as the capital an income of the economy? In this admittedly crude example 3% inflation, 3% GDP and 1% costs.

Even if you thought you could get up to 7.5% net, it would only pay in the case of new entrants and not for the enhanced benefits of another 40 years of people retiring at 60, by which time you'd still be 40 years behind the curve.

[IMHAL]

Then I suggest your wife resigns immediately and gets a job in the private sector.

They are not, I repeat, NOT unaffordable at 1-2% of GDP.

It's not that her deal is good (because it really isn't THAT good), it's just that people are shat upon by their rich employers.

She went into teaching because she loves it - she wants to do it to help people. She moved from a good job in the private sector to teach when teaching was paid much less. Even she realises how lucky she currently is and how untenable the current situation is.

I suspect that once the public sector has been cut back to size you will probably find a do nowt job in the private sector and then complain about taxes being too high. If it sounds like an insult - thats because it is.

[Guest absolutezero]

I know lots of teachers like you "its a job not a career" - they are the ones who should be fired but never are, since no one ever gets fired.

What is it? - out of >10,000 teachers less than 10 get fired each year - wow! So - not really a challenge to keep down a job like that is it. The taxpayer should be very grateful of your voluntary careership. Bonuses all round.

Ah, so anyone working as a teacher should do it out of a sense of public duty rather than using it to pay the bills?

What nonsense! Thankfully that sort of thinking died in the 1970s.

Since I am very good at my job I see no reason why I should be fired because I view it as a job. What a strange viewpoint you have.

What's the point of your second paragraph? It doesn't really say anything relevant. In fact I could argue that about your whole post.

[Guest absolutezero]

So all relgious wars comprise a definitive proof for god, do they?

That's a lto fo work to justify being a thief. Why not just not steal?

No Injin. As well you know.

What has your allegation of my being a thief got to do with trees?

[Si1]

Sounds wildly optimistic to me. Over what period are you measuring returns? The recent bull and bear runs have very much skewed things. What is the average investment fund return since say 1960?

not sure tbh!

Most don't make parity with the FTSE in any case. Where are your figures? No pension fund would go 100% into equities nor have zero costs.

I think you misunderstand - the intrinsic return of deferring paying for the pension until it is taken as income - should be about 7.5%, this is about the 100yr mean of uk, US etc stockmrkets absoulute net-inflation returns, which I am taking to be representative of the whole economy. Of course this is better than most funds - that's why it is - taking this point in isolation - a tempting course of action.

Real economic growth would be around 2-3% GDP in real terms that would presumably serve as the capital an income of the economy?

if GDP growth, net inflation, is this (I thought it would be 3%+ tbh) then underlying asset value of the nation would be a similar amount - related to its imputed income?

Even if you thought you could get up to 7.5% net, it would only pay in the case of new entrants and not for the enhanced benefits of another 40 years of people retiring at 60, by which time you'd still be 40 years behind the curve.

no, seeing as prior pensions have been 'funded' this way then it does apply to current retirees also, if I understand your question correctly, failings in economic growth being an important consideration

edit: quite a bit...

Edited July 31, 2009 by Si1

[Guest absolutezero]

She went into teaching because she loves it - she wants to do it to help people. She moved from a good job in the private sector to teach when teaching was paid much less. Even she realises how lucky she currently is and how untenable the current situation is.

I suspect that once the public sector has been cut back to size you will probably find a do nowt job in the private sector and then complain about taxes being too high. If it sounds like an insult - thats because it is.

1. Because your wife believes the claptrap about pensions being unaffordable doean't mean it's true.

2. Maybe your wife should work for nothing if she's so public spirited.

3. I'll not be one of the ones getting culled.

[Si1]

She went into teaching because she loves it - she wants to do it to help people. She moved from a good job in the private sector to teach when teaching was paid much less. Even she realises how lucky she currently is and how untenable the current situation is.

too true. the people who work in the public sector who know the score are often people who have some real experience of the non public sector world to compare against.

[Guest absolutezero]

too true. the people who work in the public sector who know the score are often people who have some real experience of the non public sector world to compare against.

Like me, you mean? Thanks for the compliment.