Work Related Pensions

Public Service Unions have called for and a majority of their members have voted to strike on the 30th of November 2011.  This is in response to the UK government's plan to increase public sector workers contributions towards their employment pensions,  the age at which they can retire and reduce the value of their pensions.  The government argues that this is already the case in the private sector and they are creating a level playing field.

This is true to a certain extent but is this right?  There is already a discrepancy between employees pensions in both the public and private sectors.  Management staff have better pension arrangements in both sectors, as well as, having bigger pay packets and higher annual pay increases.  They can also retire earlier.  In the private sector the gap between management pensions and employees pensions is even more pronounced.

In my opinion, all employees have a right to decent employment pension.  They should not rely on or expect the state to subsidise their pensions through "old age pensions".  They should also not have to wait to receive their pensions until they are to old to enjoy the fruit of their labour.  Otherwise, any pension they receive will only go towards paying their "care home bills".

Employment pensions, particularly in the private sector, have in the main failed because of abuse of pension funds by some private sector companies and pension fund managers.  During the 1980s and 1990s many private companies misused pension funds as capital investments or used it as loans to bail themselves out during financial difficulties.  Very often they were not able to put the funds and interests back in the pension pot.  Even now, pension fund managers are not only earning extremely large sums but also taking increasingly larger sums in bonuses regardless of the performance of pension funds being managed.  [One such person appearing on UK television, this week, claimed she is worth more than the pension fund contributors.]  They are, therefore, receiving proportionally higher returns on the investments than the people contributing toward their pensions.  Pension contributors have lost out in the past and they are still losing out; and this, particularly, include public sector workers and lower to middle earners in the private sector.  They are subsidising the state through taxes, subsidising pension fund managers luxurious lifestyles and disproportionately boosting private sector profits and entrepreneurs and shareholders dividends. 

The current proposed system of employment pensions, whether in the private or public sector is both unjust and highly regressive.  There is a rational solution, but it is unlikely to be adopted as most governments have and share monetarist views and are supported in their position of power by capitalist funds.  The solution is simple.  Employment pensions and pension funds for both the private and the public sectors should be managed and regulated by the state. There should also be a truly independent audit system in place.  It should not be abused or misused and fund managers should only receive adequate, not exorbitant, remunerations.  Employees should contribute an agreed percentage of their salaries, with a similar arrangement for employers.  The retirement age should be the same for managers and other employees.  The pension to salary ratio should also be comparable.

To put it simply, there should be a universal employment pension system for all.  It should be a right and enshrined in law. And similarly everyone should have a right to employment.  However, this is unlikely to happen in the UK.  The UK government is hell bent on punishing public sector workers for the financial problem created by greedy bankers who are going scot free and still enjoying huge wages and bonuses.  This is lunacy. Is it because senior politicians in the UK government come from banking and financial institution background?  Readers you can be the judge.

Good luck and good bye until the next time.

Knight Owl