Saturday, January 31, 2015
Sunday, July 07, 2013
According to the doomsters, there are many faults to existing pension systems. Too many of the benefits go to affluent retirees, funds that could be better targeted to the poor; public pensions crowd out spending on other worthy public purposes, like education; the assurance of a reasonably generous income at retirement discourages personal saving; and the retired are essentially a parasitic layer of old folk feeding off the non-old. While a public system may work well when it's young, when the number of contributors greatly outweighs the number of retirees drawing on it, as the system matures, the rate of outgo rises to match the rate of income. "Who pays for what?" This is the central question in public finance. But this one question is actually two questions: "who pays?" and "for what?"
Your wage or salary is the sum of money necessary to reproduce your ability to work and your pension is nothing else than wages or salaries deferred until you retire, money that employees would have been paid as cash salary but choose, instead, to have placed in the state operated or company pension fund where the money can be professionally invested (at a lower cost of management) for the future. Expecting individuals to be experts at investing their retirement money in defined contribution plans — instead of pooling the money so professional investors can manage the money as is done in defined benefit plans — is not sound economics. The concept, at its most basic, is buying wholesale instead of retail. Wholesale is cheaper for the buyers.
With pension rule changes, expecting workers to make a larger contribution to their pension and benefits programs. What they are actually asking is that the employees take a pay cut. Unions agreeing to these deals on their benefits are accepting the obligation their members paying for them out of their own pockets.
Some commentators have made the point that, while it is true that it is state-employees’ own money that funds the pension plan, when the pension plan comes up short it is up to the employer to make up the difference. There is some truth in this – but not as much as many seem to think.
Because the pension plan is a defined benefit plan – requiring the state to pay the agreed benefit for however long the employee may live in retirement- if the employee lives longer than the actuarial plan anticipated, the taxpayer is on the hook for the pay-outs during the longer life. But is this the fault of the employees? The pension agreements are the result of collective bargaining. That means that the state has had every opportunity to properly calculate the anticipated lifespan and then add on some margin for error.
Nor can the losses taken by the pension funds over the past few years be blamed on the employees. We had employers failing to make annual payments (taking regular extended pension holidays in the past) for their pension systems. There has been lower investment returns from the recession and increased taxation by the government on funds, not at all linked to the employee outrageous audacity of living longer.
Concerns over the effect of increasing life expectancy – sometimes described as a "burden" – are only smoke screens. We need to be clear – lowering pension levels and raising the retirement age are in effect real pay cuts.
Pensions are a transfer payment from the profits of the capitalist class – which ultimately come from what workers as a whole produce. That there is at present a "problem" once more proves that the market economy is incapable of going beyond the limits of the wages system. It cannot adequately provide for the needs of the class that produces and distributes all the wealth in the first place.
Advances gained from the increased productivity of our labour – including an increased life span – are being clawed back by capital to its advantage, pushing the burden from the capitalists onto the workers.
The capitalist class encourages us to see their interests and problems as ours. As a result we find our lives opened up to the chaos and uncontrollable insanity of the market. The market system cannot provide any security for us in the long run, which is why we need to turn the current struggle over wages, salaries, and pensions into a politically organised movement for a society based upon the direct satisfaction of human needs.
Many politicians call for the raise of the retirement age to 70. This isn't based on any evidence that people are working longer and don't actually need it, but on the fact that people are living longer and draining from the fund longer than in years past. In fact, the real belief is that many who have to retire before 70 will do so for health reasons on truncated benefits and die before they ever reach 70, thus saving the system money. Those few that actually can and do work until 70 will continue to pay into the system, so it's a win/win move. Added to that is the fact that earners in the top half of the economic strata have a longer life expectancy than those in the bottom half and have a far greater chance of making it to 70 and drawing full benefits Another solutions though could be raising the rate of immigration since immigrants (legal or not) tend to be young, and swell the ranks of those paying into the system rather than drawing it down. GDP growth will, since the size of the economy decades hence will determine how much money is available to pay retirees. The bankruptcy scenario is based on an assumption that GDP will grow at a rate seen only in depression decades.
Also, the World Bank, the voice of world capitalism, proposes a three -pillared system to finance pensions. A mandatory public system, financed by tax contributions on a pay-as-you go basis, to provide a minimum floor income for the elderly possibly a single, flat-rate benefit for all. The second is a mandatory privately managed system, financed by contributions from either employers, workers, or both a form of forced saving with the accumulating balances invested (Privately management in order to prevent the backdoor nationalisation of the private sector that could occur if public entities invested their funds in the stock market). And the third is a system of similarly invested voluntary savings, also financed by worker and/or employer contributions, but not required by law. The public pillar would assure a minimum income (subsistence) in old age, but nothing terribly comfortable. Comfort would only be achieved through the second and third pillars.
Increasing reliance on private savings, forced or voluntary, to fund retirement takes it on faith that funds invested in the stock and bond markets will magically grow to meet rising needs. Over the very long term, interest rates on long-term bonds average about the same as economic growth rates. Stocks do better than this, but it seems economically unwise to bet that financial asset prices can forever grow more rapidly than the value of the underlying real assets the present and future profits of private corporations they're a claim on.
The Bank's favorite model is Chile yet the Chilean system fails to live up to the Bank's promises. The poorest, supposedly protected by a "safety net," get a payment equivalent to a loaf of bread and a cup of coffee per day. Less poor workers are hardly well taken care of by the new system; it's likely that about half of all retired workers will fall under the official poverty line. Women, with lower wages and longer lives than men, come up particularly short. Administrative costs are far higher than the old public system; investment managers are a lot more expensive than public sector bureaucrats. As with most private pension funds, workers have no say over how their savings are used; fund managers cast the stockholders' votes by their own lights, even though they're really only the workers' agents. In the USA the The National Academy of Social Insurance detailed some options workers could pay more; reduce benefits; reduce the cost of living adjustment; increase the age for full retirement benefits; lengthen the career-earnings averaging period; and reduce benefits for new beneficiaries.
The ones being sacrificed on the altar of economics are society's oldest and frailest, an almost inevitable result of the pursuit of profit above all else in our society.
It is encouraging to see the fight back by the public sector unions. The gains made by wage and salary workers on pay, pensions and other related issues have not, after all, been granted by benevolent governments or employers – they had to be fought for. If those gains are to be defended, democratic and unified action by workers is necessary. If governments and employers win on pensions and wages they will try it again with something else. Nevertheless, important as activity of this sort is today it still does not get to the crux of the question.
The Socialist Party urges all workers to consider their position. Workers have to strike because they are slaves to the capitalist class who buy our lives by the week or by the month. So, besides making the greatest possible use of trade unions, we ask for recognition that even at their best such action cannot bring permanent security or end poverty. No strike can stop a government determined to have its way. In the end the logic of capitalism will always win out.
While trade union activity, including strike action, is necessary as long as capitalism lasts it can't work miracles. There can be no lasting solution to the problems the market economy creates within the market system itself. Austerity and insecurity, in a world of potential plenty, is always the lot of the working class. In addition to trade union action socialist political action is needed on the basis of a clear understanding and awareness of our class interests.
Unions cannot make revolutions – only the working class themselves can do that, through clear, democratic, determined political action.
Our interests are opposed at every point to those of the capitalist class. Our cause can only be the cause of revolution for the abolishing of classes based on a real understanding of our position as workers. Without that understanding, militancy can mean little.
The Socialist Party does not ask for blind support. We do not put ourselves forward as potential leaders. What we seek is understanding. Over the past century we have seen movements rise and fall, we have heard slogans fade into distant echoes, we have encountered scores of "solutions" loudly acclaimed only to be discarded.
The single, simple fact we urge working people to recognise is that capitalism generates problems it is incapable of solving. Workers are so busy taking care of the business of capitalists, we don't have the time and the resources to take care of ourselves. The remedy – the only remedy – is to consciously end the property system that divides and oppresses us.
Wednesday, June 26, 2013
Sunday, April 14, 2013
James Crosby and Andy Hornby – two of the three former HBOS chiefs damned by a parliamentary commission for “catastrophic failures of management” – were on pension schemes that accrued benefits at twice the rate of average workers.
The “executive section” of the HBOS pension scheme allowed them to pocket 1/30th of their final salary for each year they worked at the firm, compared with 1/60th for front-line staff.Hornby, eligible to start drawing down a £240,000-a-year HBOS pension when he turns 50 in four years time.
Ged Nichols, general-secretary of the Accord union, which represents HBOS staff, said the pension arrangements were “absolutely disgusting”. He said: “Even with James Crosby reducing his pension, for a front-line member of staff, they would still have to work for more than 20 years to get what Mr Crosby and some of the other former directors get as a pension for one year.”
Sunday, June 17, 2012
Today’s pensioners are experiencing real hardship, with nearly half living on an income below £10,000 a year. Those with private pensions have experienced a worrying drop in the value of their pension because of low interest rates, which are being held down by the Bank of England’s policy of quantitive easing.
Age Concern Scotland said: “For older people who are living on a low, fixed income, life can be tough, with basic living costs such as food and energy still high and April’s pension increase barely keeping up with inflation. Fuel poverty remains Scotland’s national disgrace, with almost two thirds of single pensioner households ‘fuel poor.’ "
Ros Altmann, director-general of over-fifties experts SAGA, says: “It almost seems as though policy is designed to take money from older people and give money to younger people. The government needs to acknowledge the difficulties that exist today and to try to ensure that today’s older people have a better quality of life.”
Saturday, June 09, 2012
In a scathing attack the newly-elected EIS general secretary Larry Flanagan said “We understand that it is the UK government, the coalition, that has been the driving force behind the attempt to make teachers pay more, to work longer and to get less. We know who the guilty are in this great cash robbery. But we have a clear message also for the Scottish Government and for Mike Russell, the cabinet secretary for education, in particular. You cannot hide behind the coat-tails of some Eton toffs and say, ‘It wisnae me’. Scottish teachers expect the Scottish Government to stand up for Scotland on this issue and if they fail to do so, if they fail to deliver a fair settlement on pensions here in Scotland, we are prepared to fight them every bit as hard as we will fight the UK coalition government on this issue...There is a simple choice: fight the cuts or fight us, because we are not minded to pay the price for the greed of others.”
Mr Flanagan said Westminster’s austerity measures had been “firmly rejected” by voters. Local elections in May made it clear “not only in Scotland but across Britain, that the UK government’s austerity programme has been decisively rejected”. Mr Flanagan said: “It is clear that what the electorate wants is for elected politicians to fight back against austerity and not to simply administer a cuts programme." Teaching was a stressful profession, he said, adding: “The suggestion that teachers should stay in the classroom till they are 68 or even longer is not a credible notion and it is one we will resist: 68 is way too late.”
Charlotte Ahmed, a union member from Glasgow, said: “This is theft. It’s a smash-and-grab. They’re taking money out of our pockets and putting it where exactly? The autumn is the time to turn the screw and commit ourselves to action.”
Tuesday, May 15, 2012
Alison Fleming, head of pensions at PwC in Scotland, said: “The era of retiring in your 60s is facing extinction with many people born today facing a future of work from 17 through to 77."
Age Scotland said that poorer people live shorter lives and so will have to sacrifice a larger portion of their retirement under the new plans.
Lindsay Scott, a spokesman for Age Scotland, said “Do not rely on the government to make provisions for your old age as you will be exceedingly disappointed...We face physical and mental decline, a loss of cognitive ability and if you are getting into a situation where you need treatment for your physical ailments and for your mental health, and you have no money, then you are in dire straits, because not only are pensions taking a beating, look what is happening to the NHS. I can think of nothing worse for your old age as to be old, sick and broke.”
Thursday, May 10, 2012
PCS Scottish Secretary, Lynn Henderson, said the changes, which appeared in April's pay packets for the first time, were costing some members up to £150 a month.
STUC general secretary Graeme Smith said the action demonstrated the frustration people were feeling. "People feel aggrieved at being asked to pay more, having to work longer and get less at the end of the day," he said.
We are being told practically every day that we are living in hard times and that we must be prepared to tighten our belts. Longer working lives, lower pensions and more unemployment are the prospects for the working class. Socialists recognise the necessity of workers' solidarity in the class struggle defending pay and pensions against the capitalist class.
It's simple really.Your pension is your wage deferred until you retire. And we need to be very clear. Lowering pension levels and raising the retirement age are cuts in real pay. That there is at present a "problem" once more proves that the market economy is incapable of going beyond the limits of the wages system. That capitalism cannot adequately provide for the needs of the class that creates all the wealth in the first place and it cannot offer us security in the long run.
Unions cannot work miracles. Unions cannot make revolutions. What is required in addition to trade union action is socialist political action.
If you accept the logic of capitalism, you play by its rules – and by its rules, government cuts are just necessary and inevitable. By its rules, to fight against the cuts and for higher wages is as senseless as trying to shake fruit from a dead tree. Without a decent anti-capitalist argument, and an idea of what we are for, we've lost before we’ve begun. That’s why socialism is so important. Yes, it is, as we are often told, a ‘nice idea’. But when it takes hold of workers, it could become much more than that.
Friday, March 23, 2012
Dr Dean Marshall, outgoing chairman of the BMA's Scottish General Practitioners Committee, said doctors north of the Border had been let down by Holyrood's inaction and the Scottish Government's "complicity" with Westminster on the issue.
Dr Marshall said: "Is it fair for NHS staff to be taxed for the Government's failures to properly regulate the banking sector? And while the Scottish Government argues it does not agree with these plans it appears to be going along with the UK Government and is therefore complicit in taxing public-sector workers for the failures of the private sector. Scottish ministers could seek to do something different and I urge them again to find that solution – not just invite us to new talks"
Dr Marshall said doctors were unhappy that pension reforms were being "foisted" on them just four years after they agreed substantial changes to their package.
He added: "We agreed to tiered contributions where higher earners contributed more than lower paid workers. We agreed to the increased retirement age of 65 and we agreed to a cap on employer contributions so that the taxpayer would not pay for any future shortfall in the scheme. These changes worked and the NHS Pension Scheme is in surplus to the Treasury to the tune of £2 billion, and this is projected to continue into the future."
Thursday, March 22, 2012
Thursday, January 19, 2012
A UK-wide survey by the organisation of 130,000 doctors and medical students – including 6,638 in Scotland – found an overwhelming majority opposed to the pension reforms, with almost two-thirds prepared to take some form of industrial action. More than a third (36 per cent) of doctors aged 50 and over said they intended to retire if the changes went through. It is unlikely they will agree to an all-out strike. However, one option is for a form of work-to-rule, which could see the cancellation of some clinical procedures, particularly at weekends.
Wednesday, November 30, 2011
Cameron and other apologists for the status quo claim that the whole population will have to make “sacrifices” to keep paying for those public services. What these defenders of capitalism utterly and deliberately fail to tell us is that the overwhelming burden of the sacrifice will have to be made by the working class. The rich will, for the most part, as usual keep their privileges and luxurious lifestyles. Capitalism always works in the interests of the rich minority and against the interests of the majority of the population, no matter how many reforms are introduced. Work harder, pull together, make sacrifices today, they used to say, and in a few years you’ll reap the rewards. Of course tomorrow never came. They are no longer saying this now.
Most economists and political commentators are saying that the UK’s budget deficit and indebtedness will usher in a period of significant austerity. This problem is a global one, as the problems of Greece has well publicised. Instead of meekly accepting that it must pay the price for capitalism’s crisis, and waiting for the austerity measures to be handed on down, the Greek workers set about angrily resisting them. There has been general strikes in the country.
To-day over 300,000 Scottish public sector workers will stage a strike against the Government pension changes. Success through striking may well encourage other workers to stand up for their rights in the workplace more. A group of workers' strength, however, will continue to be determined by their position within the capitalist economy, and their victory a partial one within the market system. Only by looking to the political situation, the reality of class ownership and power within capitalism, and organising to make themselves a party to the political battle in the name of common ownership for their mutual needs, will a general gain come to workers, and an end wrought to the need for these battles. Otherwise, the ultimate result of the strikes will be the need to strike again in the future. There can be no real and lasting "victory" within the profit system.
In a world that has the potential to produce enough food, clothes, housing and the other amenities of life for all, factories are closing down, workers are being laid off, unemployment is growing, houses are being repossessed and people are having to tighten their belts. Capitalism in relative "good" times is bad enough, but capitalism in an economic crisis makes it plain for all to see that it is not a system geared to meeting people's needs. What can be done? Nothing within the profit system. It can’t be mended, so it must be ended.
Thursday, October 13, 2011
Food prices have been rising at over twice the rate of the national minimum wage and at nearly twice the rate of jobseeker's allowance over the past five years.
Danny McCafferty, from Clydebank Independent Resource Centre, which helps unemployed people and those on low incomes, said "In some ways they've gone full circle. Those who are in their 70s and 80s experienced rationing and shortages after the Second World War and now they're going through it all again."
Judith Robertson, head of Oxfam Scotland, said: "It is a gross injustice that poor people in Scotland are finding it increasingly difficult to feed themselves and their families."
Thursday, September 29, 2011
“In common with many other organisations, it has been affected by reduced investment returns as a result of the downturn, the expectation of lower returns in future as well as improvements in life expectancy rates generally.” a spokesman for the bank said
Those who do not want to contribute will be offered a lower benefit based on 1/80 of salary rather than 1/60 for those who put in money. The bank has also cut the annual increases for benefits accrued after April 2012, switching to the lower Consumer Prices Index rather than the Retail Prices Index. This measure will be capped at 5%.
And for the bank executives? Unite union said the people being hit by the latest "substantial" changes "are not wealthy bankers, but frontline banking staff who serve customers in call centres and bank branches". Unite's national officer David Fleming said the move would "trigger hardship for employees" and was a "real blow". He said it was wrong "to introduce changes that will require staff at National Australia Bank to ultimately make a 9 per cent contribution, over three years, when household budgets are already extremely stretched."
Sunday, June 19, 2011
"A reformer was invariably someone who wanted to make a bad situation better. Not any more. In the mouths of politicians these days, reform is a word meant to give credibility to changes that are liable to be unpleasant, unpopular, or both...When you are told you will have to work longer, pay more and receive less in old age for your pains, it’s little comfort to hear that your lot has been “reformed”..."
Negotiations are at an end even as the talking continues is the position, it seems, of Danny Alexander, chief secretary to the Treasury, who will defend his “fair and reasonable” proposals, of the pre-determined outcome. No pensions until the age of 66; employee contributions increased by at least 3%; and a less generous settlement come retirement.
The unions could kick up a fuss, of course. But they should heed Vince Cable, business secretary: if they persist, he might feel the need to "reform" industrial relations law concerning strikes.
Summarised, the message might be this: don’t bother to negotiate, don’t bother to protest. As Mr Alexander is happy to explain, if opposition to "reform" continues, his next offer is liable to be worse.
Why should anyone [except MPs ,of course] be feather-bedded with a gold-plated pension in these hard times, when private sector workers enjoy no such luxuries? It amounts to this: private sector workers have been screwed, so it’s only fair that you, too, should be screwed.
The TUC says most public sector workers receive pensions of between £5000 and £8000 annually. The PCS union claims the average retired civil servant gets £4200.
Lord Hutton’s review of arrangements proceeded on the basis that half of pensioners receive less than £5600 a year and 10% less than £1000. His averages (for 2009-10) were as follows: local government, £4052; NHS, £7234; civil service, £6199; teaching, £9806; armed forces, £7722. Only 10% of retirees had pensions of £17,000 or above. These tended to be retired policemen and fire officers, but in those professions employee contributions – 8.5% to 11%, depending on the scheme – were far higher than most. 1% of workers in receipt of £37,000 a year. Two-thirds of them were doctors and consultants, and most of those could have bought far larger pots had they pursued private medicine.
If anything has been learned from the Coalition Government it is this: the more they get, the more they demand. They cite the national interest. But by what bizarre logic did the cost of Britain’s public sector come to be the reason and cause for underwriting criminal behaviour in international banking? Mr Alexander’s reforms are intended to raise billions, not improve the life of a single underpaid council worker contemplating retirement.
Saturday, July 03, 2010
ALMOST seven in ten British adults believe they will have to work beyond their pension age to give themselves a comfortable retirement, a new study has revealed.
In 2005 just 52 per cent of workers said they would have to work longer and 82 per cent planned to retire ahead of the state pension age. In 2005 the average male worker planned to retire at 60 years, with women targeting 59. But while a third of people would like to retire between the ages of 61 and 65, according to the latest report, 29 per cent now believe they will not be able to give up work until they are at least 66.
After a lifetime of toil many workers look forward to the comfort and leisure of old age. Alas, for many it is just another of capitalism’s illusions. Research published by Aviva yesterday showed that many people over 55 are likely to struggle to fund the lifestyle they want in retirement. In socialism every member of society, including the old, would have free access, as a matter of right, to what they needed to live and enjoy life.
Sunday, March 30, 2008
As we all have read Northern Rock collapsed and bad management was a factor in this bank's demise . So is this a capitalism's reward for failure ?
Many of us facing attacks on our final salary pension schemes will also be wondering why we have to work longer for less while the rich can dip into a retirement pot of gold .
Tuesday, November 13, 2007
British pensioners receive a pension equivalent to just 17% of average earnings, the lowest level in Europe, and well below the average of 57%.
The "inadequacy" of the UK's state system is "beyond question".
The lowest earners in the UK achieved an income in retirement which approached the level provided by other countries. This is because they qualify for extra means-tested help from the government. However, when all the criteria were taken into account, the UK was placed fifth in a list
Friday, September 07, 2007
The annual accounts of the economic and business development quango, which were made public yesterday, reveal that Carmichael retired in March with a golden goodbye worth £539,105 - nearly three times the £200,000 that had been previously estimated.
He received £106,765 in pay in lieu of notice, £5544 for accrued holiday pay, £46,196 for loss of office and £380,600, which was transferred into the Scottish Enterprise pension fund to bump up his retirement pay. Carmichael's pension pot has now swelled to £777,600 - taking the current cash equivalent transfer value of his pension of £397,000 which, according to Scottish Enterprise, in "very basic terms", could be added to the £380,600 paid into his fund in March when Carmichael left the agency.
Scottish Enterprise yesterday confirmed that Carmichael had taken early retirement at age 54 but, as part of his leaving agreement, he was given a full pension "as if he were retiring at 60"
And was it reward for efficiency . Not at all . Scottish Enterprise was accused by MSPs of "wholly dissatisfactory" financial controls in the wake of overspending on the budget by £33m during the 2005/06 financial year. Carmichael admitted mistakes were made in the allocation of public funds. Carmichael was removed from his finance director's position and was taken off the board of directors, and moved sideways into a new position.
Thursday, September 06, 2007
Yet , the average company executive can now retire at 60 on a final salary pension worth more than £3 million , says the TUC's latest annual PensionsWatch survey. This works out at £193,000 a year, says the study, more than 25 times the average UK pension of £7,500 a year. The biggest executive pensions are now worth £320,000 a year, more than 42 times average staff pensions . One pension was found to be worth more than £1 million a year.
Directors of the UK's top companies have amassed pensions worth £891 million.
"Top executive pay has already created a new group of the super-rich who float free from the rest of society," said TUC general secretary Brendan Barber. "This report shows that this does not stop with their retirement. Too many top directors have gone on closing or cutting schemes for their workforce, while keeping gold-plated pensions for themselves."
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