Thursday, 30 June 2011

Why Public Sector Workers deserve our support and how we should do it.

As we batten down our collective hatches for a day’s ‘Industrial Action’ - a classic oxymoron, the irony of which has always tickled me - I find myself compelled to put pen to paper once more.

I have to confess to having great sympathies for many of the public service workers and the glaring uncertainties they face when looking forward. The realisation that your future is not necessarily going to be as good as that which has been enjoyed by those who came before is an unpleasant and unwelcomed shock. Pay that has been squeezed while temporarily uncontrollable inflation takes hold in the world around us leaves these people already stretching their incomes to support their families and save for the future, so a call for them to pay more into their diminishing retirement planning must seem the ultimate inconvenience.

However, the point that strikes me as being blindingly obvious is that none of the difficulties listed above are in any way unique to either Teachers or the broader selection of Public Sector Workers. In fact they are the new reality for us all. The only difference is that these unfortunate people are being led by the nose into this misguided and ultimately pointless action by their cynical Union leadership that has chosen to ‘take a stand’ on their behalf, while the rest of us just get on with trying to make a living.

The truly breath-taking advances that we have seen in longevity over the past three decades has meant that the prospects of surviving long into retirement are now much more real than ever they were until quite recently and yet the funding model for these incredibly generous retirement schemes has for the most part gone unchanged. There is a guarantee of income that is driven only by your final salary and the number of years that you have worked. This income is then paid for life, usually with generous inflation-linking and widows/widowers benefits to boot. The expensive bit is that it is guaranteed and makes no allowance whatsoever for changes to the circumstances that may prevail when these people retire. In other words, if investment performance has been poor (or worse) and interest rates have collapsed then the massive increase in the cost of those benefits is simply met by the pension scheme (that’s you and me by the way).

When you contrast those guarantees to the total lack of any certainty that the rest of us face with our own future planning then you see a most unfair situation. We have to adjust our funding to overcome all the same obstacles and pitfalls that I have described above, but we do so whilst paying an ever increasing share of our income to support the cast-iron guarantees afforded to Public Sector schemes. This situation simply cannot go on – it has been true for years that workers in the private sector have been over-taxed in order that the Public Sector pension differential should be maintained and this is something that we should have tackled properly years ago. It is never nice to have something taken away from you, but when it is something that is simply no longer appropriate to the modern age then it is time to wake up and smell the coffee.

I have heard countless interviews where the main thrust goes along the lines of “I am being asked to work for longer, pay in more and get less back at the end”. Clearly I am expected to be sympathetic to this plight, but I am afraid I am not, for the simple reason that this is precisely the situation that we all of us face. The only difference between myself and those shouting this message presently is that I pay for my entire retirement funding and always have. I have no benevolent employer who decides to secure my future with tax-payers’ money, leaving me to balance my future with the costs of running my family for the present. Thus I am only too well acquainted with the true cost of planning for the future.

The truth behind this is that times have changed immeasurably and the concept at the heart of of the kind of schemes that are being fought over today is out-dated and unaffordable. We are told that the (Public Sector) pensions bill alone will be almost £10BN a year by 2015. This is not at all something that has crept up on us in the past couple of years. It is an imbalance that has been growing for decades and full marks to the current Government for having the guts to begin to seek at least the beginnings of a reform.

For intelligent people, the Teachers have allowed themselves to be wound up and filled with fury over something that is an absolute inevitability in the modern age. I have much time for these people and the sterling work they do for us every day of life. In my opinion the true villains in this piece are the Union leaders purporting to represent their members. They should for years have been counselling Teachers and other public servants on the reality that they all face and negotiating on their behalf for a fair evolution of the ‘gold-plated’ and unsustainable benefits they are still fortunate enough to enjoy.

I am sure that today’s action will not be the last, as there are many who would like this to become a full-blown and rolling movement like the ‘Poll-Tax Riots’ we saw twenty years ago. Next time you see someone like Mr Serwotka telling us of the iniquities that his members face, just listen carefully to see if there is any constructive alternative being put forward - other than our continuing to pay from our taxes for a scheme that is massively more generous than ever we could afford for our own retirement planning. To pretend that the current situation is a fair one and thus that his argument is a just one is at best misguided. We should all support our Public Sector workers by helping them understand that the proposed changes are a necessary evil in the modern world, that the reforms will still leave them with a very generous and expensive pension and above all not to be taken in by those who want to make political mischief from their plight.

These are of course my own personal views. For a full regulatory statement of my status etc etc please see my website (link above)

Friday, 7 January 2011

"To my Bank Manager. From your Humble Client"

Though a little off-topic from my usual posts, I felt the need to share with you the letter below. This was recently published in The Times and is purportedly from a 98-year-old lady, fed up at the way she had been treated by that organisation. In places it seems hard to believe that such a lady might write such a letter, it is nevertheless a classic. I hope you enjoy.

Happy New Year to one and all.

"Dear Sir,

I am writing to thank you for bouncing my cheque with which I endeavoured to pay my plumber last month. By my calculations, three nanoseconds must have elapsed between his presenting the cheque and the arrival in my account of the funds needed to honour it. I refer, of course, to the automatic monthly deposit of my Pension, an arrangement, which, I admit, has been in place for only thirty eight years. You are to be commended for seizing that brief window of opportunity, and also for debiting my account £30 by way of penalty for the inconvenience caused to your bank.

My thankfulness springs from the manner in which this incident has caused me to rethink my errant financial ways. I noticed that whereas I personally attend to your telephone calls and letters, but when I try to contact you, I am confronted by the impersonal, overcharging, pre-recorded, faceless entity which your bank has become.

From now on, I, like you, choose only to deal with a flesh-and-blood person.

My mortgage and loan payments will therefore and hereafter no longer be automatic, but will arrive at your bank by cheque, addressed personally and confidentially to an employee at your bank whom you must nominate. Be aware that it is an offence under the Postal Act for any other person to open such an envelope.

Please find attached an Application Contact Status which I require your chosen employee to complete. I am sorry it runs to eight pages, but in order that I know as much about him or her as your bank knows about me, there is no alternative. Please note that all copies of his or her medical history must be countersigned by a Solicitor, and the mandatory details of his/her financial situation (income, debts, assets and liabilities) must be accompanied by documented proof.

In due course, I will issue your employee with PIN number which he/she must quote in dealings with me. I regret that it cannot be shorter than 28 digits but, again, I have modelled it on the number of button presses required of me to access my account balance on your phone bank service.

As they say, imitation is the sincerest form of flattery.

Let me level the playing field even further. When you call me, press buttons as follows:

1. To make an appointment to see me.
2. To query a missing payment.
3. To transfer the call to my living room in case I am there.
4. To transfer the call to my bedroom in case I am sleeping.
5. To transfer the call to my toilet in case I am attending to nature.
6. To transfer the call to my mobile phone if I am not at home.
7. To leave a message on my computer (a password to access my computer is required.
A password will be communicated to you at a later date to the Authorized Contact.)
8. To return to the main menu and to listen to options 1 through to 8.
9. To make a general complaint or inquiry, the contact will then be put on hold, pending the attention of my automated answering service. While this may, on occasion, involve a lengthy wait, uplifting music will play for the duration of the call.

Regrettably, but again following your example, I must also levy an establishment fee to cover the setting up of this new arrangement.

May I wish you a happy, if ever so slightly less prosperous, New Year.

Your Humble Client