Unite defends public sector pensions over underfunding 'myth'

Unite must have run this past the FSA.

Do you ever get the feeling these people running the Unions, could be running Banks or the FSA or even Government. They all seem to talk the same talk.

... 'In reality, the majority of the public sector workforce will retire on modest pensions, only achieved by decades of service and years of paying increased contributions,’ added Cartmail.

Ahem. And so what about those of us in the private sector, reliant upon investment returns and non-existant annuity rates??

Once again. the Unions have their heads up their collective arses ...

The 'deferred pay'(ie the FS pension) was 'reward' for a lifetime of a lower salary vs private sector; however, as this gap has almost completely gone, so should the FS entitlement ...

... and I'm glad we're following the 'I'm-alright-Jack' ethos as enhanced/advocated by New Labour.

I'm also sure that Cartmail will have a nice little nest egg to look forward to via her Unite/CS pension ...

Is the pension fund half full or half empty?

The bottom line is that the capital necessary to fund the scheme (on a capital funding basis as opposed to an income funding basis) is huge.

But has anyone ever thought how much capital would be necessary to fund the state pensions including the nic based ones?

What? The government spends around 45% of GDP. The wages and pensions of public servants are paid from the revenue pool. Public servants or their employers making pension contributions and in effect 'lending' them to the Government only recirculates the same money - there is no fund - only the juggling of money collected in taxes from the productive in society. How's about slashing government spending, firing non productive public servants and spending the savings reducing the public debt mountain and allowing a free market in services currently nationalised.ie health, hospitals, education and any other services that can be supplied by the private sector. If we also repeal the minimum wage legislation , the country's crumbling infrastructure can be rebuilt cheaply using the labour of those who will now need to work to eat, since their benefits have been stopped..

Or is this too darwinian?

"In response to criticism of unfunded pensions Unite said: ‘Public sector employees and employers both pay pension contributions. Benefits are all accounted and paid for, and not subsidised out of general taxation. The schemes are actually ‘funded,’ but the funds are not visible as they are lent to the government."

It's obviously passed these financial geniuses by that governments present and past have spent the money because it went in to the current account!

Where on earth do they think the government of the day are going to pay an ever larger benefits bill from in the future given the above if not from taxation levied on an dwindling working population?

So I would go as far as to say someone has just told a porky to suggest it is "funded" just lent to the government. Do they have a loan note from teh government and does it say "I promise to pay". Oh yes, we have no gold to meet the words on our currency anymore don't we....

So the public sector 'employers' (who are they ?) loan the government money. Where does UNITE think these employers get their contributions from ? You guessed it : the taxpayer !.

Like I said earlier, it's the way you tell it or sell it.

Either way, it seems clear that the 5 statutory schemes have a current shortfall in capital funding of around £1 trillion. (How many "0's" is that?).

And if they had been schemes of private employers, then these shortfalls would have had to have been published in the balance sheets under FRS 17.

And I am always amazed at how little the great British Public know or truly understand about pensions.

And having worked with several unions regarding various pension issues, they only seem to understand snippets.

Maybe there's no place for the generic financial trash written in most tabloids nowadays?

And maybe there is a place for qualitative and professional independent financial advice?

Or am I just a cynic?