Accounting scam? HMG? Royal Mail Pension Fund

[Dave2002]

Did anyone else think the article about the government's plan to bail out the Royal Mail Pension Fund, as reported in the Times on Sunday today, looked like a bit of a scam? Well, actually a rather large one!

Only a politician or a dodgy accountant could really believe that "rescuing" a financially failing organisation could then really lead to a credit surplus for the organisation doing the bailing out.

On the other hand, perhaps I live on a different planet from most members of HMG, and George Osborne. Physicists and mathematicians would surely be appalled at these shenanigans.

[Flosshilde]

Haven't read the report & can't as I don't/won't subscribe to the Times (cue Mr Pee) but if the govt is proposing to rescue the pension fund it's likely to be a prelude to privatisation.

[Flosshilde]

perhaps I live on a different planet from most members of HMG, and George Osborne.

I sincerely hope that you do

[Eine Alpensinfonie]

The government tells so many terminological inexactitudes about pensions that I don't believe anything I read any more...

[ahinton]

The government tells so many terminological inexactitudes about pensions that I don't believe anything I read any more...

Maybe so, but I had thought that pensions of all kinds and none were(/are) by nature and definition terminological inexactitudes in their own right (now there's a new "pension right" for anyone interested in that subject!); a pension - once widely considered to be the financial instrument for the purpose of funding retirement - is just another government tax-dodge investment, there are many other investment vehicles to be considered for the purpose of funding retirement and the very notion of retirement for most of us is in any case in the process of being consigned to history...

[Eine Alpensinfonie]

and the very notion of retirement for most of us is in any case in the process of being consigned to history...

Of course. From the government's point of view, it's a good way to kill off all the older people. Then they'll be able to afford the return of bonuses to their banker chums.

[french frank]

Haven't read the report & can't as I don't/won't subscribe to the Times (cue Mr Pee) but if the govt is proposing to rescue the pension fund it's likely to be a prelude to privatisation.

This is the story in the Guardian/Observer.

[cloughie]

The government tells so many terminological inexactitudes about pensions that I don't believe anything I read any more...

Have you ever noticed how they keep quiet about their own pensions?

Is anyone else fed up of the abuse of the word 'unsustainable'?

[Dave2002]

Have you ever noticed how they keep quiet about their own pensions?

Is anyone else fed up of the abuse of the word 'unsustainable'?

The Guardian article differs slightly I think from the Times, but the overall sense is the same. It looks as though by the "money" ending up in different parts of the system it can be counted as an asset (a gain), though the responsibilities/liabilities are conveniently disregarded. Looks like a deck chair re-arrangement, yet with the apparent effect of creating additional revenue for HMG. Can someone perhaps send a few people from HMG and the Treasury along to explain why finance doesn't obey the same kind of laws as physics, in which it is very generally agreed that perpetual motion machines are impossible. Of course since we are all here - whoever knows how - we can observe that there is real precedence for creation of something out of nothing.

Re 'unsustainable' - I think it's a good enough word. My view is that continued high payments to rich people who frequently avoid tax should definitely be marked as unsustainable.

We are trying to run a system in unsustainable ways in any case. It seems clear that we need to spend more on so-called health care (I call it so-called, because often it tries to "fix" problems after they have occurred, rather than avoiding them), and rather than congratulating ourselves on having one of the most cost-effective health services in the world, we should be looking at real quality improvements. This can perhaps only be achieved by spending a greater proportion of our resources on health matters. Given that many people want to have benefits, but are unwilling to pay for them, how is this to be done?

Other aspects of our lives are also unsustainable. I don't only single out the rich. People think they have "rights", yet rights can only really be granted in the context of a state or society. We have rights to food, shelter, and free speech, but that doesn't mean that we can all have as much food as we like, or live in palaces. Free speech is easier, providing we don't try to provoke revolt, or cause disruption, which should clearly break the connection between the society which affords us our "rights". Richer people think they have "rights" to tax rebates etc., but this is based on beliefs about the way a rule based society works, and that the rules are in some sense fair and/or sustainable. It now seems fashionable to think that every woman has a right to bear as many children as she (and possibly her partners) want, yet this can also lead to unsustainable situations.

Under really harsh circumstances, such as I hope we don't have to face in the next few decades, constraints on some aspects of our society may become unmanageable, and the notion of rights may need to be re-examined. This could be particularly problematic if we consider the way that sick people, and the elderly are to be treated. For the foreseeable future I hope that it will be possible for these groups to be given sympathetic treatment, and high quality care, but in the limit it may only be possible - at best - to do "the best for these that can be afforded" - which may in practice mean not very much at all. Thus the notion of rights implies a relationship between society and individuals, and a society which has sufficient resources (financial, energy, labour etc.) to be able to support such relationships.

[Eine Alpensinfonie]

Is anyone else fed up of the abuse of the word 'unsustainable'?

Absolutely. The "unsustainable" Teachers' Pension scheme is £46.4 billions in surplus, or would be if successive governments hadn't spent it as soon as they took it out teachers' pay packets.

[gradus]

Doesn't sound a bad deal to me for potential and current Royal Mail pensioners, as all things being equal, I would much rather have HMG backing my pension than an investment fund with a £4.5bn hole in it. Whether or not one agrees with privatising Roayl Mail is another issue but it will much easier to attract investors without that pension liability.