Following on from my earlier post...
"Joanne Segars of the National Association of Pension Funds said that the [£2.9 billion bail out of insolvent schemes] would "start the process of rebuilding confidence in the security and value of workplace pensions" (scroll down to penultimate paragraph)
Yeah right!
A bit like "automatically reimbursing purchasers of cut'n'shut cars would rebuild confidence in the second-hand car trade" or "replacing knock-off Burberry or LVMH gear with the real article at taxpayers' expense would restore confidence in designer handbags".
Tuesday 18 December 2007
"Rebuilding confidence"
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3 comments:
The justification for tax-payer bail-out of insolvent final-salary pension schemes is that employers were compelled by the government to run them (by Barbara Castle IIRC), and employees were obliged to pay into them, again by legislation, and solvency requirements were set surprise surprise by government. So, from the impoverished employees point of view, a taxpayer bailout is quite reasonable, short of going after the personal wealth of the various ministers and MPs responsible.
Were employers really compelled? I thought the hoo-hah was that the gummint of the day (it may well have been a Tory one) implied strongly that the pensions were 100% safe. Which they weren't.
Anyway, let's go after the ministers and MP's as well!
IMO the 100% safe thing is (was) a red herring. It is the compulsion that makes the difference, and which puts the responsibility for mitigating the risks on the compeller, not the compellee - who has after all had his money taken away.
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