UNRULY WORKERS

So the great unwashed of the public sector are striking for their pension rights among other things.

For your delectation, here is a handy etiquette guide courtesy of the Daily Mash for whence you may happen to come upon the masses:

A guide to strike etiquette30-06-11
AS the country's public servants once again challenge Britain to notice the difference, experts have issued an essential guide to national strike etiquette.



Do try not to spray tea directly into their face Professor Henry Brubaker, of the Institute for Studies, said: "Too many people in Britain have forgotten the importance of good manners during an angry strike. This simple guide should ensure that the strikers' absurd demands are politely ignored without it descending into a foul-mouthed brouhaha."

National strike dos and don'ts:

When crossing a picket line do so with poise and grace. Imagine one is trying to balance a badly educated child on one's head.

However, it is important to remember you are now in the striker's place of entitlement. The striker is your host and you should treat them with respect. Do not put your feet up on the seats they put their feet up on.

If one finds oneself eating lunch in the same restaurant as a striker, always use a dessert fork to stab them in the face when when they start helping themselves to a third of your soup.

Never be arrogant or condescending - particularly when pointing out the horrendous spelling mistakes on a teacher's placard.

Listen patiently and politely to the striker as he or she explains loudly why their pension needs to be better than yours, before smiling and saying 'thank you so much, that was very entertaining'. You should then offer them a sweet - perhaps a Rolo or a Chewitt.

Do not burp, spit or pick your nose at them.

A man should always open a door for a lady striker, even though she will find it violently sexist.

If the striker continues to insist that you should pay for his pension and that he should retire five years earlier than you, always say 'pardon me?' rather than 'huh?', 'come again?' or 'what in the name of shitting fuck are you talking about you delusional, self-serving piss-bucket?'.

TOYS OUT OF A PRAM

So the unions are threatening 'French style strikes' over the prospect of their pensions being altered.

I have said over and over again that we cannot afford the public sector (PS) pensions bill. WE couldn't ten years ago and we certainly can't now.

The reason why PS got good pensions was that traditionally PS was poorly paid, jobs for life.

But...

Since Labour got in, PS outstripped the private sector in terms of pay and conditions.

So what is the excuse for brilliant pensions?

Apparently some PS workers are still poorly paid.

Well, y'know what, so are some private sector workers. But they are not going to get the taxpayer to fund their retirement.

So why should PS expect the taxpayer to do so?

You are not some special breed that needs credit and protection. You, in essence, are people who do not generate wealth for this country, you spend the wealth of the nation.

So what makes you so special?

Oh and to the unions, 'French-style strikes'? Fair enough, but on one condition, we should be allowed to have Gendarmerie-styled response to these threats.

Remember, if you throw all your toys out of a pram, you will end up with no toys.

PENSIONS

The pension deficit for local councils in England and Wales could hit £60bn this year according to the Lib Dems.

Apart from a firm case of NSS there are other important factors about this.

Firstly - Like the misguided FRS17, this does not mean councils are going to go bust. Don't panic. The defecit figures are a snapshot based on one particular day and that valuation of shares, bonds etc held by a pension fund versus if every single member of that pension fund retiring that day.

What this does mean is that there will have to be siginificant shifts in the portfolio value to pay for those who retire.

Which leads me to-
Secondly - the fundamental flaw in civil service pensions. They are protected by law, which means that there needs to be an act of Parliament before any siginificant change to provision can be applied.

Which means you and I pay for it, either through cut services or higher tax bills.

This two-tier system has been flawed for quite a number of years and I have blogged about it in the past.

The State can no longer give such gold plated schemes to non-income generators - ie: they spend the money we give them, they do not generate the income of the country.

State-employed wages have rocketed in the past 13 years and the original excuse of poor wages versus life service can no longer apply. Sure there are still lowly paid council workers but there are lowly paid private workers - why should council workers get better deals?

PENSIONS APARTHEID

Are you in your 30s?
Do you have a final salary pension?

Well you must be in a public sector job then.

The pensions apartheid continues to grow as the gap between public and private sector continues apace and the sums are frankly astonishing. As reported in the Telegraph:

"If a 25-year-old worker joined a defined contribution scheme — the kind used by most workers in the private sector — this year and paid in 2.7 per cent of a lifetime average salary of £50,000 a year, while their employer paid in 6.5 per cent, they would receive an annual pension of £16,023 from the age of 65.

"A 25 year-old on the same pay joining a final salary scheme — most typically found in the public sector — could expect to receive £57,714"

That's over £41k a year more.

Now I am not going to fall into the trap of saying public sector workers aren't tax payers but there are some things to consider-

1) Final salary schemes, good benefits etc were originally there to supplement rather poor wages in the public sector. However, this is no longer the case. In fact as recession bites, public sector pay is outstripping private pay for the first time. The Pensions Policy Institute puts average public sector salaries at £25,600 and those in the private sector at £25,300,

Between 1997 and 2006 we saw a 13% increase in public sector pay alone representing 12.4% of national income.

2) With one-in-five in public sector pay, this represents an annual bill of £16bn a year according to the PPI and £45bn a year according to the Policy Exchange - the MOD is given £35m a year to run the army!

Why an annual bill? Well one of the problems with the public sector pension schemes is that most are unfunded - that is the government, me and you pay the bill. Which leads us to the really scary figure

3) Public liability

In 2005 the liability stood at £600bn rising to £725bn in 2006.
Even on the Government’s own figures, in 2005-6, the interest paid on the unfunded liabilities
exceeded the interest paid on the National Debt for the first time.

According to the Policy Exchange, using the Government’s own calculations, the accumulated liability of unfunded public sector pensions schemes is estimated to be greater than the national debt. If proper financial methods are applied, the true figure is vast - £1.1 trillion, or equivalent to 78% of GDP.

These are truly frightening figures.

So as the private sector final salary pension goes to the wall, public sector pensions carry on going in their merry unfunded way.

But why?

I mean why should 76% of public sector workers get a gold plated pension compared with 17% - and shrinking - of private sector workers?

At least there was a funding requirement for most of the private sector pension schemes.

If companies that earnt the country billions of pounds of income cannot cope with the pressure of final salary schemes why can a sector, which by its nature spends the country's capital rather than generates, think it can carry on with high wages and high pensions?

That is where the pension apartheid comes from and for the sake of our wallets, this will have to be addressed.

One final word: What do you call a pension scheme with a few planes?

British Airways

UPDATE:
Must be a meme going on- John Redwood is examining the death of private sector final salary schemes