Pensions/Unions

It's been no secret that many people have been paying for pensions only to be told they won't receive what they have already paid for (funny how a Ponzi scheme is illegal unless it's the government running it), or private firms telling employees if they don't sign new contracts with worsened pensions, they will be sacked.

I understand the government doesn't give a shit and has shown it is willing to illegally make retrospective changes to the law (https://en.wikipedia.org/wiki/R_(Rei..._and_Pensions).

However I'm wondering why private firms have been allowed to get away with what they have done? We have had loads of news about firms telling employees they must accept a worse newer contract or be made redundant, and the fact it's happened in a few places without any real resistance has allowed this idea to gain momentum.

I was just thinking, say for the first unionised firm to try to pull such a stunt, surely the union should have turned round and negotiated something along the lines of: We do not want to accept any change in terms. However if top level management can prove the situation is as claimed, firstly major cuts must be made to senior salaries, with the agreement to state these will not rise quicker than average staff wages. Secondly, in lieu of a portion of a pension, our members will reluctantly accept shares worth say 30% more than the reduction in pension (shares to be received pro rata during employment rather than at retirement time). Obviously this will eventually lead to the workers (combined) becoming the majority shareholders and able to assert such rights. If you don't like that plan, sack us all and face us in court.

To me it just struck me as the simple common sense solution, and I suspect actions along these lines didn't happen as the people in charge wish to enjoy ever inflating salaries while getting the workers to bear the finanical responsibility for financial incompetency of the seniors, and to allow this to happen, union bosses were paid off.

I'm wondering if anyone can find holes in my idea, as the idea just came to me, but to more I think about it, the more I wonder how we have ended up where we are.

the problem with pensions started when Maggie changed the rules and allowed companies to take a pension holiday if the funds had a sulplus, ( which in the good times most final salary schemes did)
then Brown hit the pension schemes with new taxes which again hit the returns,
in early 2000's when unions were faced with extra members costs or reduced pension payouts they went for reduced pension payouts

I can find a hole easily because my own brother works in what you would call a unionised workforce. He drives the busses for special needs kids and delivers school meals ect. They are all in the union (or were).
So how did they get away with it (Because the workers I'm talking about have already accepted reduced terms and conditions) ?

Here goes

1. "they" encouraged the development of 3 unions in the workplace (This was done over 10-15 years) nothing major just inviting other unions to work with the council employees
2. When 1 was in place they then start playing one union against the other 1st at local level then regional level
3. Bring in reductions in terms and conditions for people who are not yet employed (Nobody objects as it doesn't effect them lol)
4. Offer long term employees early redundancy
5. Get rid of other "expensive" employees by "dirty" means.....I couldn't really elaborate just to say that some of the stuff councils get up to if they want rid of people for whatever reason is almost criminal
6 While all the above is going on the government obviously inform the public about gold plated pensions and the super easy jobs that the above people get paid fortunes for by YOU the taxpayer
7. Based on 6 the government changes the law with public support - this change gives councils the power to give whole departments 90 days notice if they do not accept new terms and conditions imposed on them....all done with the approval of the public who remember already detest everything local government and union related (Why should HE get that when I don't) - Why should I give a shit about SN kids getting to school of a morning as I don't have SN kid (These are not my views by the way just observations of general publics attitudes)

And there you have it. there are very few strong unions and very few workplaces where they are the sole union so can't command the respect of the employer. Divide and conquer and it's as old as the hills. My brother is 58 so is on his way to his "golden" pension lol. It is much less than he was "promised" and he has had to pay much more into it than he was originally told......He is on one of the "expensive" contracts so now in his twilight years his employers are now doing their level best to piss him off so he will leave (Hard to explain but they are).

Sadly nobody really gives a shit these days it's more of a case of I have been shafted so I want to see YOU shafted too. Strange as I have always strived to achieve betterment in all areas of my life and could never care less that another may have better terms and conditions than me....rather than bring those down I am more of lets drag my conditions up.........But there are not enough of us around anymore and those of us with such a mind-set are labelled as trouble makers and dinosaurs.

Fecking bloody teachers taking a days strike action.....How the feck am I going to arrange child care ? How is this allowed ? Look at all the bloody holidays they get...I don't get that !! Fecking easy job they shouldn't get a pay rise blah blah blah fecking blah - And now ? Well no bugger wants to become a teacher and so now there is a shortage of suitably qualified teachers - Rinse and repeat through every public service.

Sorry if I sound a little negative lol.

As Rusty said a lot of the problem pensions have had is when Gordon Brown scrapped the dividend tax relief on pension funds back in 97 which has cost them circa £10 billion a year, along with the interest rates being so low so very poor interest & gilt returns it's made the original pensions promised unsustainable.

Share issues would be difficult as you are then also diluting the holdings of existing shareholders - in listed companies of course this could then affect other pension funds which hold the shares.

Hoponbaby in your professional opinion do you think that pensions were/are possibly the biggest mass Ponzi scheme ever invented ? I am just an electrician so this is not my line of work but the more I look at pensions and the industry in general it just looks almost certain to fail. Everything is assumed on continued growth....and unlimited resources, I think that we all now know both these conditions can never be met.
It's the exact same with private landlords who have bought a few houses as their retirement pot. So they howl in protest at any attempt to tax their business in the same way as any other business would be. They keep rents high as that is their "retirement". But they also expect the young to pay for their retirement through their taxation/ni. Again for the life of me I can't see how it can ever add up. It's a continued transfer of wealth from the young to the old....thank fook I'm not that young as to be on the shit end of the stick...apart from the ripped tanned body id hate to be 21 right now trying to get my shit together in the workplace and trying to find somewhere to live at an affordable rent/mortgage.

Tbh DavidF yes I do agree, the state pension especially is setup that way - at least in theory a personal pension such as a SIPP etc is backed (potentially) by the assets within the fund, whether those assets have any real substance is another story.

Landlords though I don't necessarily agree with you. The changes to mortgage interest relief penalise individual landlords in a different way to corporate ones, in any other business interest on loans that you have used within the business would be offset against profits before any tax calculations. Although there are many that have bought properties as their pension (and who can blame them in view of the ponzi nature) there are others who have become landlords through circumstances. Also, with interest rates being so low the rents charged have also been relatively low on a yield basis against the market value of the property - the price of property is another matter all together.

Quote:

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Originally Posted by hoponbaby

Share issues would be difficult as you are then also diluting the holdings of existing shareholders - in listed companies of course this could then affect other pension funds which hold the shares.

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I believe a business must honour it's contracts and pay it's workers and suppliers. If it cannot do this, the business is bankrupt meaning the shares are worthless. I'm guessing to do so would have bankrupted some firms, but I still don't understand why employees should be the ones to take the hit rather than management/investors. Surely the fair way should have been for contracts to be honoured and investors to make lower (or even negative) profit?

Also it's strange how share dilution never seems to be a concern when directors, etc. are given shares.

You mention this could still affect pensions and I can't deny your logic. However I'm thinking with the idea I mentioned, workers might loose some pension income, but then they would have greater power over the company that failed them. Still can't see any fault in this logic, apart from the fact the rule is common man always gets shafted by people higher up.

OverCarl Like I said in my initial rambling reply. My brothers workplace is as unionised as they get. On a large point of interest maybe 2 years ago (Was not pensions I don't think it was more terms and conditions) Eventually all3 unions DID get together and provided a united opposition against these reduced terms.....The council simply invoked a relatively newish law that allows them to end all the drivers contracts (I suppose redundancy where appropriate) and then to comply with the law they just have to offer each driver the opportunity to re-apply for their old job with the new terms and conditions....The term is a 90 day notice and the council up in Scotland used this - So there you have it.....I have not read in to the particulars of my brothers case above BUT I always thought that shit like that was illegal it does not sound "right" but I do know it happened to them and I also know that the guys capitulated because it was pointed out that this 90 day notice thing had been used in recent disputes in other areas of different councils and services and there was sod all any union could do do about it.
For private sector examples just look at that steel plant in wales last year (Think it was Tata Steel) - It was put to the workers that the plant was closing and that was that OR they could all accept cuts in their pensions and cuts in their terms and conditions. Like it or lump it.
Lastly I agree that businesses should honour their commitments - but alas that just had never really been the case in the UK. We have just been through the ppi scandal. Many people have already forgotten about the endowment "scandal". Then of course we had the banking crisis which was created by the reckless lending of banks to customers who the KNEW couldn't fund the repayments.
Next banking/finance crisis is not far away....Car loans - They have done exactly the same as what they did with mortgages - They have bundled the bad ones up with a few good ones and called them a bond or whatever term they use and sell them on the open market....To banks, financial institutions ect ect....eventually this ends up in someone's pension pot.....a pot of shit loans that will never and can never be repaid.
All of this ties directly into pensions and what many are based on. I asked Hop above about the Ponzi and his view as from reading his posts numbers/money is his area of work/expertise. Fecking even more scary that he partly agrees with me....feck !!! Seriously though we all now acknowledge that state pension will be gone for the current generation of school leavers....It just wont be available OR it wont be claimable by the majority of what we would currently term retirement age people (ie they will set the retirement age about 5 years above average life expectancy....thus sorting out the problem) - in a sick sort of way the rise of the young vote (Which I personally believe will continue) will result in political parties not being so frightened of the grey vote as they will have a different generation of voters to target and when we are young pensions are about the last thing on our minds.