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UK - Election 2015

Francesca R said:
On the dimension of "If you were promised something, then the promise should be honoured, if you were not promised anything then there is nothing to honour" then yes it is unfair to break promises that were made in order to make greater benefit available to those who were not promised anything (because they were not present when past promises were made)

On the dimension of "the give/get ratio of contributions to benefits should be stable across generations and not become highly skewed by exogenous changes in longevity, fertility, investment returns and insurance risk" then it is unfair to honour prior promises even though the same promises were not made to younger generations. And it was unfair ex-post to have made those prior promises in the first place.

YMMV.
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What is the "get" value of a benefit paid during the lifetime of the recipient? We know that in any case you want to put an end to pensions in favour of means-tested payments, so the whole issue is technically irrelevant, as far as your views are concerned.
 
Francesca R said:
Not as measured by public spending as a fraction of economic output--Annex table 25, as above. That was 38.3% of GDP in 1997 and 47.5% in 2010. About one third of the increase happened prior to 2008.
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How quickly people forget. The increase happened and it showed in areas we all rely on. I worked in Education (a local authority) and the amount that Blair/Brown threw at it was huge. New schools, lots of infrastructure renewal, 'social inclusion' projects and the like. The same with health. Just think about the number of new builds during that period. If they had not some of our schools and hospitals would be falling down by now.

As an aside, several key indicators in Education did not improve significantly as a result of the spending, despite that being one of the governments desired outcomes.
 
Francesca R said:
Suppose older generations were all promised a detached house by the sea each, from an unfunded pension fund. Still extremely unfair not to honour it?
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Who made that promise? Here is what they actually get, compared with other countries in the developed world. And you want to abolish the whole lot, and replace with means-tested benefits.
It's official: the British state pension at a maximum £110.15 a week is the most miserable in Europe. Compared to average income, even Hungary and Slovenia better the pension benefits 12.3m British pensioners receive, according to a new OECD report.

British workers on average earnings typically get a state pension worth 32.6% of their working wage. A complete disgrace?

If you compare bald state pension stats, it doesn't look good. Italian workers, in contrast, can expect 70% of their working salary from the Italian government when they retire. In the developed world, only Mexicans receive less proportionately from the State pension than British workers.

Drilling into the data, the average European State pension is worth 40.6% of average earnings. If you want to retire comfortably on State coffers compared to those in work, one of the best countries is Austria, at 76.6% - or the Netherlands, even better, at 90.7%. Many Europeans also retire earlier than their British counterparts.
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http://money.aol.co.uk/2013/11/28/uk-state-pension-is-lowest-in-europe/
 
You (not for the first time) made an unsubstantiated and false claim about my views, which are not the subject of the thread. These claims will be disregarded.

Your references to statutory pension are also not relevant to defined benefit public and private sector pensions.
 
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Francesca R said:
You (not for the first time) made an unsubstantiated and false claim about my views, which are not the subject of the thread. These claims will be disregarded.
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You don't think universal state pensions should be replaced by means tested poor relief payments. I thought you did. Sorry. I will search the thread, because I really thought you did.
Your references to statutory pension are also not relevant to defined benefit public and private sector pensions.
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They are relevant to your statements about the alleged generosity of wht older generations have been promised. I think you are unable to defend your arguments and are finding ways of avoiding the necessity of doing so.
 
Craig B said:
Who made that promise? Here is what they actually get, compared with other countries in the developed world. And you want to abolish the whole lot, and replace with means-tested benefits.
http://money.aol.co.uk/2013/11/28/uk-state-pension-is-lowest-in-europe/
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Once again we're back to the scary "means test" phrase. The means test gathered its pejorative meaning early last century when those in need were refused help after intrusive inspections of their homes. I'm not sure any politician is advocating that approach.

OTOH it seems wasteful to me to give people who don't need or require it the state pension when there are people in real need who could use a higher state pension or access to the pension for longer.

For example IMO I'd rather people were able to claim from age 65 at the expense of the better off receiving it than everyone getting it at 68. This discriminates against the poorest because they have shorter life, and healthy life, expectancy.
 
Craig B said:
They are relevant to your statements about the alleged generosity of wht older generations have been promised.
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Nope. I suspect they are only relevant to your statements about the unfairness of promises not being kept.

Which you have not followed up by means of an answer to Suppose older generations were all promised a detached house by the sea each, from an unfunded pension fund. Still extremely unfair not to honour it?
 
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Francesca R said:
Suppose older generations were all promised a detached house by the sea each, from an unfunded pension fund. Still extremely unfair not to honour it?
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That's a bit disingenuous. It's suited successive governments to keep the majority* of public sector pensions unfunded, since they got to play with the employees' contributions in the meantime.

* As previously noted, the local government scheme is funded, and apparently still more than healthy.
 
Francesca R said:
Local government pension schemes are only partly funded.
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Perhaps it would be more accurate to say that it is almost entirely funded, since Parliament thinks it is, with some projected unfunded liabilities in the future.

Teachers, civil service and the NHS are unfunded.
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Obviously.

What's disingenuous?
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Failing to take into account that successive governments chose to keep most public sector pension schemes unfunded for very obvious reasons. All those decades of employees paying pension contributions, which those successive governments chucked back in the pot and spent, yet apparently the "unfairness" lies in those employees having temerity to expect what they signed up for and paid into.
 
Information Analyst said:
Perhaps it would be more accurate to say that it is almost entirely funded
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Perhaps it would be less accurate to say what you said the first time. The funding ratio goes up and down with the level of markets. So a ratio of 75% now is subject to future volatility, and would not be not "almost entirely"

Failing to take into account that successive governments chose to keep most public sector pension schemes unfunded for very obvious reasons.
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You completely miss the issue. Nobody claimed the schemes should be funded, certainly not me, and that would not anyway address the issue of the assets not immunising future payers/payees to the uncompensated risks around longevity, fertility, market returns and reinsurance.

apparently the "unfairness" lies in those employees having temerity to expect what they signed up for and paid into.
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Er, no I have already outlined that not getting what you promised is unfair. But suffering the aforementioned negative risks is also unfair.

So the question you and CraigB avoid, probably because you know the answer, is just how far this breaking promise unfairness should go. Obviously not to the extent in my hypothetical. And in my view not as far as preserving current DB promises either.
 
Francesca R said:
Nope. I suspect they are only relevant to your statements about the unfairness of promises not being kept.

Which you have not followed up by means of an answer to Suppose older generations were all promised a detached house by the sea each, from an unfunded pension fund. Still extremely unfair not to honour it?
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Suppose pigs had wings. I've shown you that far from detached houses they have been offered one of the scantiest pensions in the developed world. And you have not responded to that fact. So your imaginings about seaside mansions need no answer.

I have also asked for the reason for your positive view of immigration, but you have not responded to that either.
 
I will conclude that you believe the importance of not breaking promises has its limits. Which it obviously does.

Those limits should kick in before committing the gross inter-generational injustice of contintuing with non contingent final salary pension schemes in my view. Liberalism demands that much.

So you (not you) were promised an island in the sky. Get over it. You should not have been.
 
There's no need for any government to break any pension promises. The government can instead just introduce or adjust taxes to control the effective value of pensions.
 
Not as measured by public spending as a fraction of economic output--Annex table 25, as above. That was 38.3% of GDP in 1997 and 47.5% in 2010. About one third of the increase happened prior to 2008.
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I was talking about jobs. When they talk about bloated they generally mean massive increases in public sector jobs. Yet there wasnt really. Even for GDP you say that roughly 3% increase happened in 11 years. Is that excessive?
 
Agreed, the jobs totals tell a different story. It is quite possible for public spending to increase and public sector employment to decrease. Which many people equate with "privatisation of public services". But it represents increased private provision of increased public services.

funk de fino said:
Even for GDP you say that roughly 3% increase happened in 11 years. Is that excessive?
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Perhaps not if you have abolished boom and bust. If you have abjectly failed to do such an implausible thing, then during an 11 year expansion in output, it looks to have been a pretty bad idea. Particularly if (as Ed Miliband frequently insisted), the government had zero influence over if/when/how big a bust would come.
 
Francesca R said:
I will conclude that you believe the importance of not breaking promises has its limits. Which it obviously does.

Those limits should kick in before committing the gross inter-generational injustice of contintuing with non contingent final salary pension schemes in my view. Liberalism demands that much.

So you (not you) were promised an island in the sky. Get over it. You should not have been.
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Why do you keep using these extreme metaphors? You make it sound like a public sector pension is akin to winning the Lottery.
 
Because it (inter-generational distributional in-justice) is almost never seen or considered despite being an elephant-in-the-room in the sense of violation of economic norms of efficiency and moral norms of fairness.

Typically most folks (like in this thread) think that opposition to the legacy structure of defined benefit promises is a private versus public "reverse class war" issue, which it is not.

It is a case of yesterday's workers, today's pensioners "winning the lottery" against today's workers and tomorrow's pensioners. But not a fair lottery since only the former group bought the tickets.

In my view defined benefit pension contracts should be declared invalid (by the supreme court or whomever) and renegotiated.
 
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