Jump to content
House Price Crash Forum

Archived

This topic is now archived and is closed to further replies.

davidg

The Boomers That Stole Your Pay Rise

Recommended Posts

Long anti-boomer article in the Guardian saying your pay rise has gone into the boomer's private pension pot

http://www.theguardian.com/business/2015/sep/14/uk-pension-fund-shortfalls-blocking-pay-rises

Economists have failed to make the connection between private pension scheme deficits and workers’ current wages... this should not come as a surprise after more than a decade watching those who own assets – mostly the over 55s – ringfence their booty from anyone planning to tax it or allow the market to diminish its value... It was never fair that one generation could secure its own pensions knowing everyone else would be left with a pittance in old age – as companies rushed to ditch their final salary-linked schemes – but we did not know it would also mean people sacrificing wage rises.

Share this post


Link to post
Share on other sites

Good article. Of course they'll get winter fuel allowance and free bus passes too. They paid in all their lives you know...

Share this post


Link to post
Share on other sites

I thought that pay rises in the private sector were running at 3%. Surely a better strategy would be to campaign for pensions for future generations that are at least equivalent to those that previous generations received. The money is there, it is just that it is being shared out differently in 2015 than it was for previous generations. If 99% of the population are receiving 10% less of the wealth than they did 40 years ago then it is not surprising that pension schemes are less generous. Someone has to pay for the extra £150 billion that is going into the tax free accounts of the 1%.

Share this post


Link to post
Share on other sites

I thought that pay rises in the private sector were running at 3%. Surely a better strategy would be to campaign for pensions for future generations that are at least equivalent to those that previous generations received. The money is there, it is just that it is being shared out differently in 2015 than it was for previous generations. If 99% of the population are receiving 10% less of the wealth than they did 40 years ago then it is not surprising that pension schemes are less generous. Someone has to pay for the extra £150 billion that is going into the tax free accounts of the 1%.

Yes, this. Divide and rule, gang.

Share this post


Link to post
Share on other sites

*dusts off economics textbook*

These companies offering low pay rises and with crippling pension deficits will be put out of business by dynamic new market entrants able to poach the best staff and offer market beating rates.

Just like happened to all those banks during the global financial crisis /s

If this doesn't happen it is a sign that it isn't a free market and the government should intervene.

Share this post


Link to post
Share on other sites

*dusts off economics textbook*

These companies offering low pay rises and with crippling pension deficits will be put out of business by dynamic new market entrants able to poach the best staff and offer market beating rates.

Just like happened to all those banks during the global financial crisis /s

If this doesn't happen it is a sign that it isn't a free market and the government should intervene.

Gotta bribe the boomers for the next general election now...

Share this post


Link to post
Share on other sites

Gotta bribe the boomers for the next general election now...

BY the next election a Corbyn Labour + SNP coalition will see the boomers in Trouble.

We finally have an alternative to Nu Labour/Tory and UKIP.

I personally dont trust any of them but any chance to shove 2 fingers up to the 1%ers has to be good.

Share this post


Link to post
Share on other sites

BY the next election a Corbyn Labour + SNP coalition will see the boomers in Trouble.

We finally have an alternative to Nu Labour/Tory and UKIP.

I personally dont trust any of them but any chance to shove 2 fingers up to the 1%ers has to be good.

Much as my centre right ideals would disagree with this, I find it impossible to disagree with you.

I don't think Corbyn will get close to power however.

Share this post


Link to post
Share on other sites

No shit sherlock. Amazing that it takes so long for the mainstream and the experts to join the dots.

Woke up a couple of boomers only last week to this uncomfortable truth.

When they get a 5% per annum compounded guaranteed rise on their pension for sitting back on a cruise - knowing the scheme is in deficit, and I have to scream to get 1%, where did they think its coming from?

Share this post


Link to post
Share on other sites

Screw the pay, it's meaningless given current house prices. Just lower them please!

Actually I don't disagree.

In 2003 my house cost £135k, and the average salary round here was around £25k full time. £700 a month to service a mortgage.

In 2015 my house would sell for roughly £300k and the average salary around here is probably £28k. £1500 a month to service a mortgage.

Share this post


Link to post
Share on other sites

The simple solution to this is not to work for a company which has a large, unfunded pension fund.

Years ago - mid 90s - I remember looking at a couple of private companies and their pension schemes and trying to work out the maths.

You look at the figures, you look at the promises and I thought - fck! Its either a pyramid scheme or will default.

The classic is British Airways.

From about 99 I started avoided working for any company that had a large pension liabilities.

Any company tht had a large workforce in the 70s + 80s and has shrunk down, think the utilities and the likes of BT - AVOID if you are under 50.

Share this post


Link to post
Share on other sites

Much as my centre right ideals would disagree with this, I find it impossible to disagree with you.

I don't think Corbyn will get close to power however.

Maybe not today, but give it 4 and a half years or cuts, immigration and a collapse in nominal house prices.

Share this post


Link to post
Share on other sites

*dusts off economics textbook*

These companies offering low pay rises and with crippling pension deficits will be put out of business by dynamic new market entrants able to poach the best staff and offer market beating rates.

You're talking pre-Osbrown economics there.

2009 and QE changed all that. Zero-interest-rates provide an environment for zombies to carry on, and stifle a big chunk of what could be up-and-coming in a healthy economy.

As well as directly creating zombies out of previously-functioning companies.

Share this post


Link to post
Share on other sites

And the biggest problem is public sector pensions.

The solution to most public sector pensions is pretty simple:

1) Do not let anyone draw a pension until 75.

The problem is with implementing that, as Red Jezza might find out.

I have a feeling that the (sensible bit of) EU will come up with some rules on public pension costing and deficits.

They formed a large part of the problems in Greece.

Share this post


Link to post
Share on other sites

The problem has arisen not because of the greed of boomers. Company pension schemes were in surplus in the eighties when Nigel Lawson decided to tax those surpluses (shortly before requiring those same funds to offer opt-outs to their members). Most companies responded by taking pension holidays until the surpluses were run down. Pension funds were further hit by Gordon Brown's taxing of dividends when Labour came to power in the late nineties.

Pensions are a component of wages, but have been viewd by employers and successive governments as wages which can be claimed back many years after they have been paid. Nobody kicks up much of a stink because everyone considers paensions to be a burdon until they're drawing one.

Far from being greedy, boomers made provision for their old age and have had huge chunks of that provision stolen to pay for tax cuts to the wealthy.

http://www.saveoursavers.co.uk/government-failure/pulverising-final-salary-pension-funds/

http://www.rosaltmann.com/whathashappened.htm

If employers are being forced to restrict pay rises because of pension commitments they are being very quiet about it. One would expect them to be shouting about any excuse to keep the wage bill down, particularly when it involves such an obvious scapegoat.

Share this post


Link to post
Share on other sites

Long anti-boomer article in the Guardian saying your pay rise has gone into the boomer's private pension pot

http://www.theguardian.com/business/2015/sep/14/uk-pension-fund-shortfalls-blocking-pay-rises

Actually what has had a major impact on these deficits is zero interest rates which may (or may not) be reversed in time.

Also the study appears to create a direct link between pay levels and pension deficits. I would have some doubts about this; I would think you could only do this where labour markets were generally soft; how can one company enforce lower pay in these circumstances and, if it does, how can this be ascribed to the issue in question?

Furthermore it tars a whole demographic whereas I would guess the main beneficiaries of this are long servers who are already retired; most people are not long servers any more and in fact never were. A major criticism of these schemes for many years was that they penalised early leavers (probably the majority) who got a very raw deal. As the article concedes final salary schemes are also now a rarity and many of the much despised boomer generation will not (largely)have a final salary pension - outside the public sector.

Also this is a a matter for the company and not the individual; apart from representation on a company pensions committee I cannot see how this mechanism works. I have served on such a committee and I can say that this sort of pressure ( from pensioners) never arose.

It seems a shoddy piece of work to me.

I am retired with a personal pension 90% funded by me alone so I am not one of the beneficiaries of this.

Share this post


Link to post
Share on other sites

so these are the retirees with defined benefit /final salary pensions not the poorer pensioners who have a miniscule annuity and the state pension

The blame lies with the retired baby boomer and their employers who failed to ensure enough funds went into their final salary schemes during their working lives. The deficit-ridden schemes must now be filled from company cashflows, denying today’s workers a proportion of the forecast wage rises.

but let us continue to bash an entire age group because of the minority who have never had it so good and can afford the cruises

my income as a single pensioner is £12k per year - yes that will pay for a lot of cruises and new cars! :o

it is unfair that the gold-plated pensions that some enjoy are to the detriment of those that come after and are currently working

my miniscule annuity was entirely funded by me not some mythical worker.

crouch - you said it better

Share this post


Link to post
Share on other sites

The problem has arisen not because of the greed of boomers. Company pension schemes were in surplus in the eighties when Nigel Lawson decided to tax those surpluses (shortly before requiring those same funds to offer opt-outs to their members). Most companies responded by taking pension holidays until the surpluses were run down. Pension funds were further hit by Gordon Brown's taxing of dividends when Labour came to power in the late nineties.

Pensions are a component of wages, but have been viewd by employers and successive governments as wages which can be claimed back many years after they have been paid. Nobody kicks up much of a stink because everyone considers paensions to be a burdon until they're drawing one.

Far from being greedy, boomers made provision for their old age and have had huge chunks of that provision stolen to pay for tax cuts to the wealthy.

http://www.saveoursavers.co.uk/government-failure/pulverising-final-salary-pension-funds/

http://www.rosaltmann.com/whathashappened.htm

If employers are being forced to restrict pay rises because of pension commitments they are being very quiet about it. One would expect them to be shouting about any excuse to keep the wage bill down, particularly when it involves such an obvious scapegoat.

There's a surplus and an actuarial surplus.

What appeared to be a surplus in 1994 turned out to be a deficit in 205, what with low bond yields and the likes.

The only true pension surplus will be what's left when the pensioner dies.

Share this post


Link to post
Share on other sites

The problem has arisen not because of the greed of boomers. Company pension schemes were in surplus in the eighties when Nigel Lawson decided to tax those surpluses (shortly before requiring those same funds to offer opt-outs to their members). Most companies responded by taking pension holidays until the surpluses were run down. Pension funds were further hit by Gordon Brown's taxing of dividends when Labour came to power in the late nineties.

Pensions are a component of wages, but have been viewd by employers and successive governments as wages which can be claimed back many years after they have been paid. Nobody kicks up much of a stink because everyone considers paensions to be a burdon until they're drawing one.

Far from being greedy, boomers made provision for their old age and have had huge chunks of that provision stolen to pay for tax cuts to the wealthy.

And yet despite all the funding shortfalls these final salary schemes continue to pay out.

There's no pensions like those on offer now. Everyone's stuck with a defined contribution pension, so when the fees and the taxes take their slice there really will be nothing left to pay for the annuity. I pay a big percentage of my wages into my pension pot and yet on current projections I'll be retiring a lot poorer than my dad, with his teacher's pension.

The lucky subset of 'boomers' we're talking about certainly didn't experience the misfortune the markets and the government visited on their pension pots. They somehow escaped scot-free, even as the 1%ers raided everything, leaving the rest of us at the mercy of global capital. Once again the privileged generation are protected while the next one is thrown to the market wolves.

I agree with Timak - if companies are burdened with unaffordable pension liabilities then they should be out-competed by new entrants. But of course most industries have massive barriers to entry, or are effectively natural monopolies.

Share this post


Link to post
Share on other sites

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   90 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.