Strike

[Headnavigator]

Don’t we all simply make choices – about career, about pension, about lifestyle?

Yup, now tell me about those who have 'chosen' events like redundancy, ill-health, gender, divorce, and who are thus at the bottom end of the financial food chain?

As always, those who 'have' (eg pensions above and beyond the statutory minimum) demand more.

Others just get on with life regardless and are grateful for what little they enjoy.

Greed knows no bounds in our society and is apparently always justifiable one way or another.

 

[greatbritishhoney]

I have sympathy with public sector workers, particularly teachers, on the pension issue. My sympathy is a little tempered by the fact that their salaries and pensions are vastly better than my own (in the charity sector).
I am not suggesting that everyone should be dragged down to the lowest common denominator but I really think both parties (government and unions) should still be round the table trying to thrash out a compromise that delivers a fair deal for public sector workers AND tax payers.
All this tough-talking and brinksmanship from both sides is, IMO, counter-productive and will probably not lead to a sustainable solution.

And, I am pleased to say that my children's school is still open today with all staff present.

 

[The Cumbrian]

but I really think both parties (government and unions) should still be round the table trying to thrash out a compromise that delivers a fair deal for public sector workers AND tax payers.

What is never mentioned about the negotiating is that the talks were scheduled to end with the various unions between the 20th and 31st October. The government told the unions there would be no talks and no movement after that date.

Due to laws brought in by previous governments there is a long time delay between deciding a strike is necessary taking the required votes (by the electoral reform society) and the date of the strike. The government can hardly complain if having said the talks are ended the juggernaut (created by government legislation) grinds its way to the inevitable conclusion.

Hopefully after this strike IF the government is prepared to negotiate in good faith they will be back round the table.

EDIT I should have mentioned that one of the reasons there has been no teachers strike for 15+ years is that there was an agreement which lead to much negotiation called the "social contract" (or similar) and one of the first actions of this government was to sweep that away. I firmly believe that if that had still been in place teachers at least would not have needed to strike.

 

[OXFORDBEE]

Surely the point should be for the private sector to be doing something to ensure that it has pension plans in place for its workers.

I did plan for the future. Mr Brown "cleverly" helped himself to my pension then created loads of public sector jobs from it.

 

[The Cumbrian]

I did plan for the future. Mr Brown "cleverly" helped himself to my pension then created loads of public sector jobs from it.

Which is of course totally wrong if not illegal. However that isn't a reason to want all pensions to be like the private sector. Surely there are strong unions in the private sector - what were they doing?

 

[OXFORDBEE]

Where I work the unions agreed with managment and pension scheme contributions were increased and the benfits reduced.

It was either agree or the pension scheme could have been wound up as being too expensive. Not heard of public sector pensions being threatend in the same way...

 

[madasafish]

I expect a serious recession next year. That is unless Euroland sorts its problems out quickly and in a statesmanlike fashion.. Since they have taken three years and acted as idiots, I will not be holding my breath.

Now a deep - and LONG in years _ recession - with an ongoing dispute by people whose terms and conditions are better than those who fund them (and who are sick more often) - is not conducive to generous settlements. (See the 1920s General Strike and the Miners Strike) .

So prolonged action coupled with a recession is likely to lead to a worse settlement...

Which I suspect is why the Labour Leadership are not supporting the strike.

And if the Labour Leadership can see it, guess what George Osborne is thinking?

 

[Queens59]

When I started teaching and joined the Teachers Pension Scheme - I was stunned how much of my wage disappeared each month into its coffers...and my husband couldn't work out why so little hit the bank...But when the op. went wrong and I had to claim an ill health pension early it took 9 months of form filling, nagging, threatening legal action etc to get a penny!!

 

[Skyhook]

Just out of interest, how can they be self financing?[/QUOTE]

BY payments made by the workers and presumably investing those payments. The statement was from the treasury in 2006/7 so perhaps you had better ask them.

They are of course NOT self- financing. What they are is sustainable- as long as the employer (ie everyone else) continues to pay around 20% employers contributions.

If anyone's interested, my private sector employer pays 3%.

It pains me to say it, but I think the tories may have actually got something right on this one.

.

 

[Nose Ma]

Surely there are strong unions in the private sector - what were they doing?

I cannot fully answer, but I can speculate.

Pensions are expensive. The shift from Defined Benefit schemes to Defined Contribution ones was driven because companies noticed that the risk of those pensions vested with them, not the employee. As people lived longer that risk (from the employer's point of view) was too much, the schemes were too expensive. This was for a variety of reasons, including shocking investment decisions, insufficient contributions from members/employers, too many pensions “holidays” and aggressive actuarial valuations etc. The change was sold to the workforce in a positive way (see negative below) by saying “it’s more flexible for you, and LOOK, LOOK at the amazing stock market growth! If that continues, you can retire earlier on a bigger income!” That way it was presented as a win-win. Cheaper for the company, less risk for the company, fliexible and better for the individual. Of course, none of that worked out. Companies won, employees lost. The first fly in the ointment was the over estimation of stockmarket growth, and the underestimation of how much pension firms would charge for the privilege of taking your money off you. Cue many mis-selling scandals.

That’s the first part – Unions would be no help there, if they were “duped” (and I don’t think there was duping, I just believe everyone got carried away).

The second part is all about having an employer, or not, there are “market forces” at play. In the private sector if you are more expensive than your competitor for the same product people are quite likely to go to your competitor. If you don’t sell stuff, you are in trouble. Being bust is good for nobody, all the employees are now without a wage or indeed a pension, so companies cut costs. A massive cost is the pension (and if you wish this would be a good point to insert a rant about boardroom pay compared to shop floor pay). So you can present the argument as “you could have a nice pension but no job to fund it, so no pension, or a job and a poor pension. Your move”. Then there is a threat of “strike, and we have nothing to sell. Our customers will go elsewhere, and we will not get them back. You hurt me (the employer) but you hurt yourself too.” More recently it would be “you know, I’ll just outsource your job to India. Save some money.”

So – unions were hamstrung both ways.

There is no such “market” in the public sector, or at least much of it. This is not a good place to argue the merits or otherwise of going that way. To illustrate, I don't have much choice about a fire service or a refuse collection service. So there is no particular incentive to “do it cheaper” because another person would do it instead, and take your business away, leaving you out of a job. Instead costs and revenues are all “regulated” by specific Governmental edicts, such as capping council tax, or overall pay scales etc.
For years and years pensions has been a brewing issue (a quick look at how your council tax is spent is quite illuminating) but at the same time it’s a political nightmare to deal with, and many Governments of different colours have chosen to place it in the “too difficult” pile. As a result the public sector pensions have not been messed around with as much as private sector ones. Until now…

I agree completely with your assertion that we should not be in a race to the bottom, to find the cheapest for all. We should aspire to having the best provision for all. I, for one, cannot see how we fund that however.

 

[greatbritishhoney]

It pains me to say it, but I think the tories may have actually got something right on this one.

.

I think the deciding factor, as always, will be public opinion. If the unions manage to take the public along with them then the govt may budge a little. If they don't then the govt will sit tight and let the media do the work for them.
However, I think it is really difficult to read public opinion on this one, lots of people (including Ed M) seem to be sitting on the fence.

 

[rae]

In 2007 their pension payments were increased and from 2013 will be self financing so all this talk of needing to take more because people are living longer and the other tax payers supporting their pension is frankly B******s.

Some facts.

1) There is no fund. Teachers pensions are paid out of general taxation. So it is entirely the case that future generations will be picking up the tab for services delivered today.

2) Whether the pension is self funding on an annual basis is irrelevant. What is important is the promise made over the lifetime of the deal. As of 2010, the total liabilities of the Pension Scheme were £224 billion.

3) Given that there is no fund, the scheme is entirely reliant on future generations voting in governments that will uphold the promise. As the liabilities get increasingly out of control, so the chance of this sort of event increases.

Many people (not just Teachers) have assumed that government funding is an inexhaustible supply of cash, and that anything deferred for 10 years doesn't matter. The bond markets (who actually fund the government) beg to disagree and Greece leading example of what happens. In that country, they have a unilateral 30% cut in public sector salaries and pensions - because they don't have any money.

For what it is worth, my pension is funded, I pay 20% of my salary into it, and my employer puts in another 15%. My level of sympathy with the strikers is low.

 

[OXFORDBEE]

Hi,

Nice reply but what's been the impact of Mr Brown's dipping into pension funds...? I gather it's been quite espensive and I recall he tanked into them when they had a surplus...
http://www.telegraph.co.uk/news/ukn...id-on-pensions-costs-Britain-100-billion.html

 

[Hivemaker.]

Just got back from checking some hives,still bringing in quite a bit of pollen,nice and sunny,good to at least have some decent weather for the strike.

 

[mbc]

I only hope that if anyone else who in future should need to strike gets support. Instead of vilified by the government for doing so.

Comparing public and private sector pensions doesnt realy make sense but the worrying thing about this strike for me has been the cynical use of "envy" by the government and the right wing press to turn public opinion against the strike.

 

[Skyhook]

I think the deciding factor, as always, will be public opinion. If the unions manage to take the public along with them then the govt may budge a little. If they don't then the govt will sit tight and let the media do the work for them.
However, I think it is really difficult to read public opinion on this one, lots of people (including Ed M) seem to be sitting on the fence.

I've heard very few disinterested people speak in support of the unions.

 

[The Cumbrian]

Just out of interest, how can they be self financing?

If anyone's interested, my private sector employer pays 3%.

It pains me to say it, but I think the tories may have actually got something right on this one.

.[/QUOTE]

1st. It was the treasury that said self financing.

2nd. It appears that rather than get private employers to pay more you want everyone brought down to the lowest level.

3rd. From a teachers point of view (I am an ex-teacher) they would then expect pay commensurate with the sort of jobs they were doing/could be doing. See my two examples mentioned above.

 

[For want of a better word]

I've heard very few disinterested people speak in support of the unions.

I know a lot of disinterested people who now admit they made a mistake when using their democratic rights at the last election !​

​

 

[greatbritishhoney]

I've heard very few disinterested people speak in support of the unions.

I don't know many people who are on strike today either (out of the public sector people I know).

 

[Skyhook]

2nd. It appears that rather than get private employers to pay more you want everyone brought down to the lowest level.

No, I would love everyone to get a teachers pension. But I know that, in a private company, the money that goes out has to come in. There is a limit to what can be afforded, and in most companies, the margins are pretty tight. In my organisation for example, wages account for pretty much 50% of turnover. For my employer to pay another 17% contributions would basically wipe out our profits, and either bankrupt the business, or encourage him to sell up and put his money in the post office where he would get a better return on it- in either case, putting us all out of work.

This is the reality that the public sector does not have to face. The current arrangements have been arrived by someone deciding what would be a good pension to pay, then getting that amount from central government.

At a time when most people are exposed to the cold wind of economic reality, you can't be surprised if those of us out in the snow look at those in the warm without rejoicing at their good fortune.




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