Comments on: Wielding the axe on pensions will cost country dear http://www.leftfootforward.org/2010/04/wielding-the-axe-on-pensions-will-cost-country-dear/ Left Foot Forward is a political blog for progressives. We provide evidence-based analysis on British politics, news and policy developments. Sat, 11 Feb 2012 22:58:00 +0000 hourly 1 http://wordpress.org/?v=3.0.1 By: The CBI on public sector pensions (3) | ToUChstone blog: A public policy blog from the TUC http://www.leftfootforward.org/2010/04/wielding-the-axe-on-pensions-will-cost-country-dear/comment-page-1/#comment-15881 The CBI on public sector pensions (3) | ToUChstone blog: A public policy blog from the TUC Fri, 16 Apr 2010 16:38:42 +0000 http://www.leftfootforward.org/?p=10896#comment-15881 [...] less generous there because the state provides a much more generous basic retirement pension.  Naomi tells me that the median state pension in Sweden amounts to 51% of the working population’s [...] [...] less generous there because the state provides a much more generous basic retirement pension.  Naomi tells me that the median state pension in Sweden amounts to 51% of the working population’s [...]

]]> By: The CBI on public sector pensions (1) | ToUChstone blog: A public policy blog from the TUC http://www.leftfootforward.org/2010/04/wielding-the-axe-on-pensions-will-cost-country-dear/comment-page-1/#comment-15385 The CBI on public sector pensions (1) | ToUChstone blog: A public policy blog from the TUC Wed, 14 Apr 2010 16:49:27 +0000 http://www.leftfootforward.org/?p=10896#comment-15385 [...] on public sector pensions was released last week (when I was away). Naomi has already responded on Left Foot Forwards, but I know our friends in the CBI would be disappointed if there was not a TUC critique too . [...] [...] on public sector pensions was released last week (when I was away). Naomi has already responded on Left Foot Forwards, but I know our friends in the CBI would be disappointed if there was not a TUC critique too . [...]

]]> By: Philip Painter http://www.leftfootforward.org/2010/04/wielding-the-axe-on-pensions-will-cost-country-dear/comment-page-1/#comment-14502 Philip Painter Fri, 09 Apr 2010 15:11:50 +0000 http://www.leftfootforward.org/?p=10896#comment-14502 <span class="topsy_trackback_comment"><span class="topsy_twitter_username"><span class="topsy_trackback_content">RT @IainMcNicol: One of the best political pension articles out there "Wielding the axe on pensions will cost country dear" - http://bit.ly/bcEwzC</span></span> RT @IainMcNicol: One of the best political pension articles out there "Wielding the axe on pensions will cost country dear" – http://bit.ly/bcEwzC

]]> By: Iain McNicol http://www.leftfootforward.org/2010/04/wielding-the-axe-on-pensions-will-cost-country-dear/comment-page-1/#comment-14485 Iain McNicol Fri, 09 Apr 2010 14:42:14 +0000 http://www.leftfootforward.org/?p=10896#comment-14485 <span class="topsy_trackback_comment"><span class="topsy_twitter_username"><span class="topsy_trackback_content">One of the best political pension articles out there "Wielding the axe on pensions will cost country dear" - http://bit.ly/bcEwzC</span></span> One of the best political pension articles out there "Wielding the axe on pensions will cost country dear" – http://bit.ly/bcEwzC

]]> By: Will Roberts http://www.leftfootforward.org/2010/04/wielding-the-axe-on-pensions-will-cost-country-dear/comment-page-1/#comment-14288 Will Roberts Thu, 08 Apr 2010 19:36:23 +0000 http://www.leftfootforward.org/?p=10896#comment-14288 <span class="topsy_trackback_comment"><span class="topsy_twitter_username"><span class="topsy_trackback_content">RT @leftfootfwd: Wielding the axe on pensions will cost country dear http://bit.ly/bcEwzC</span></span> RT @leftfootfwd: Wielding the axe on pensions will cost country dear http://bit.ly/bcEwzC

]]> By: Naomi Cooke http://www.leftfootforward.org/2010/04/wielding-the-axe-on-pensions-will-cost-country-dear/comment-page-1/#comment-14283 Naomi Cooke Thu, 08 Apr 2010 19:01:54 +0000 http://www.leftfootforward.org/?p=10896#comment-14283 <span class="topsy_trackback_comment"><span class="topsy_twitter_username"><span class="topsy_trackback_content">RT @leftfootfwd: Wielding the axe on pensions will cost country dear http://bit.ly/bcEwzC</span></span> RT @leftfootfwd: Wielding the axe on pensions will cost country dear http://bit.ly/bcEwzC

]]> By: John77 http://www.leftfootforward.org/2010/04/wielding-the-axe-on-pensions-will-cost-country-dear/comment-page-1/#comment-14000 John77 Wed, 07 Apr 2010 22:00:34 +0000 http://www.leftfootforward.org/?p=10896#comment-14000 Robert, Your post is a diversion from the main subject which is public sector schemes but your post deserves some explanation. The problem was not the change in accounting policy - that merely shone the light on the existing situation - it was Brown's change in taxation. HMRC has rules that say any pension scheme that is more than 10% "overfunded" loses its tax benefits. In the 1990s almost every scheme had more than two-thirds of its funds invested in equities despite taxation making equities more attractive than fixed-interest to tax-paying private investors because there were just not enough fixed-interest securities to match the assets of insurance companies and pension schemes. Brown's tax raids reduced the value of equities to pension schemes by 20%. So pension schemes, in aggregate and in most individual cases, were instantaneously plunged into deficit. Please excuse me from commenting, apart from saying that I was arguing for more than 30 years that assets and liabilities should be valued using the same rate of interest, on SSAP24 as my views would breach the blog rules. I sympathise with you but the change to FRS17 did not make us look at Pension provision - that was a 1960s theme - it just forced a lot of people to acknowledge the damage that Brown had done. As you said the damage to one plc's pension scheme reduces the value of its equity which reduces the value of other plcs' pensions schemes etc which creates a downward spiral - a copy of the 1970s and the converse of the upward spiral in the 1990s bull market. However I assert that Brown's single-handed evisceration of private sector pensions is not in itself a justification for similar treatment to public sector pensions. Brown's destr Robert,
Your post is a diversion from the main subject which is public sector schemes but your post deserves some explanation.
The problem was not the change in accounting policy – that merely shone the light on the existing situation – it was Brown’s change in taxation.
HMRC has rules that say any pension scheme that is more than 10% “overfunded” loses its tax benefits. In the 1990s almost every scheme had more than two-thirds of its funds invested in equities despite taxation making equities more attractive than fixed-interest to tax-paying private investors because there were just not enough fixed-interest securities to match the assets of insurance companies and pension schemes. Brown’s tax raids reduced the value of equities to pension schemes by 20%. So pension schemes, in aggregate and in most individual cases, were instantaneously plunged into deficit.
Please excuse me from commenting, apart from saying that I was arguing for more than 30 years that assets and liabilities should be valued using the same rate of interest, on SSAP24 as my views would breach the blog rules.
I sympathise with you but the change to FRS17 did not make us look at Pension provision – that was a 1960s theme – it just forced a lot of people to acknowledge the damage that Brown had done. As you said the damage to one plc’s pension scheme reduces the value of its equity which reduces the value of other plcs’ pensions schemes etc which creates a downward spiral – a copy of the 1970s and the converse of the upward spiral in the 1990s bull market. However I assert that Brown’s single-handed evisceration of private sector pensions is not in itself a justification for similar treatment to public sector pensions.
Brown’s destr

]]> By: Robert http://www.leftfootforward.org/2010/04/wielding-the-axe-on-pensions-will-cost-country-dear/comment-page-1/#comment-13996 Robert Wed, 07 Apr 2010 21:10:37 +0000 http://www.leftfootforward.org/?p=10896#comment-13996 This other Robert has a different point to make. One of the main drivers for companies to close down their defined benefits schemes was that the accounting rules changed to force companies to show the shortfalls in their pension schemes on their balance sheets. Quite a severe knock on from that on declared profits, share prices, dividends and so on. Something of a negative spiral. Not that I am saying that propping up the stock market on a bubble of pension schemes carrying actuarially calculated "off balance sheet" losses would have been morally acceptable - just what the effect is of being open, transparent and truthful. Really it was a precursor to the massive collapse of the US banking system in 2008 from the dishonest property bubble. The difference was that the first made us look properly at pension provision. The other wrecked the world economy. This other Robert has a different point to make.

One of the main drivers for companies to close down their defined benefits schemes was that the accounting rules changed to force companies to show the shortfalls in their pension schemes on their balance sheets.

Quite a severe knock on from that on declared profits, share prices, dividends and so on.

Something of a negative spiral.

Not that I am saying that propping up the stock market on a bubble of pension schemes carrying actuarially calculated “off balance sheet” losses would have been morally acceptable – just what the effect is of being open, transparent and truthful.

Really it was a precursor to the massive collapse of the US banking system in 2008 from the dishonest property bubble.

The difference was that the first made us look properly at pension provision. The other wrecked the world economy.

]]> By: Robert http://www.leftfootforward.org/2010/04/wielding-the-axe-on-pensions-will-cost-country-dear/comment-page-1/#comment-13995 Robert Wed, 07 Apr 2010 20:53:05 +0000 http://www.leftfootforward.org/?p=10896#comment-13995 Pay a decent wage and stop blackmailing people to work for low wages, by offering good or better pensions, if you cannot recruit it's due to rubbish wages. Pay a decent wage and stop blackmailing people to work for low wages, by offering good or better pensions, if you cannot recruit it’s due to rubbish wages.

]]> By: Wielding the axe on pensions will cost country dear « The best Labour blogs http://www.leftfootforward.org/2010/04/wielding-the-axe-on-pensions-will-cost-country-dear/comment-page-1/#comment-13982 Wielding the axe on pensions will cost country dear « The best Labour blogs Wed, 07 Apr 2010 19:35:25 +0000 http://www.leftfootforward.org/?p=10896#comment-13982 [...] More… [...] [...] More… [...]

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