Greek events coming to a location near you

The discussion on whether the strikes tomorrow is an interesting one and I cannot help but see a little Greece in all this. Fact of the matter is our governments, while supporting our bankers, have messed up over many years and a lot of not wealthy people are going to have to pay for it. I would strike too if my terms of business were changed unilaterally this way. Of course it does affect my terms of business if we do not make the changes so in fact the changes need to be made.

Having decided at a young age that I could not deal with working for government (my father was a civil servant and a well paid one thank you) I suffered the consequences of having my pension benefits pulled from under me a long time ago. I had not place to strike then and yes I did use it to remove as much pension liability as I could from any business I have run.

The first business I managed had had a final salary pension plan somewhere in its past. It seemed that every time I agreed to increase contributions to reduce the deficit and that matters were settled it only took a couple of years for the pension fund to come back and tell me the deficit had increased even more. It was a never ending black hole.

Matters were not helped by the pension fund paying out the full value of the pension to anyone leaving the fund. When I discovered this I queried our responsibility. It turned out we only needed to pay out our fair share – in other words anyone could leave the fund but they took their deficit with them. That made a big difference and I stopped the drain instantly. Thank you pension fund for complete lack of guidance at the time – if I had had any choice I would have sued you, but your paperwork was despicable in its ability to cover your bad management. Yes, I am still angry about it.

So back to our strikers – are they right? Of course they are, but mainly for the bad faith manner in which Government started ‘negotiations’. If you enter negotiations with the statement that you will not move from your viewpoint, you may as well not start. In this case the statement by Mr Cameron et al was even more stupid as in fact they have moved in some areas.

Whether the public sector deserves their pensions or not I leave to other people to decide. Building a pension system which relies totally on future tax receipts is stupid though and it is those many years of stupidity that not only the future public sector pensioners now have to pay for (and they did not know) , but all of us have to contribute to through tax receipts disappearing up the public sector pension spout.

Given a choice though, I would still rather pay the pensions of our public sector than pay for ludicrous wars and propping up bankers bonuses.  After all the banks still do not provide the mortgages or business loans promised, but they have continued with their bonuses.

Sadly we may see Greek events coming to a location near you.

2 comments for “Greek events coming to a location near you

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  2. 1 July, 2011 at 13:34

    I would certainly agree that more ‘Little Greece’s will be popping up in a lot of places for superficially different reasons and one underlying reason: questionable management of funds. I, similarly, was brought up to believe that a pension is a sum of money you put aside (through my salary at the time) for when I come to retire. I never dreamed of questioning the competence, authority or even identity of the ‘guardians’ of my ‘secure’ retirement.

    As I have grown older, I have realised how wrong I was. My pension premium money is now in the hands of ‘global’ funds. These funds travel the globe and change hands with the speed of light by ‘global’ financiers or punters who use weird sounding acronyms for their actions/products/instruments but in essence they are not that dissimilar to the local betting shop. Of course, all these global punters have to play in a level playing field or comply with rules laid out in FSAs, Eurozones, IMFs and so on depending where one is globally located.

    These punters that look after our ‘pension premium money’ normally get paid quite handsomely; with big bonuses so that they make sure the fund grows steadily. But as in all betting shops sometimes your ‘favourite’ in Newmarket 2:15 comes 2nd or never crosses the finishing line! The punter will move to another job with his options, perks and bonuses intact but it is a different matter for our ‘secure’ retirement money.

    Remember the mis-selling of Endowment policies? I have one maturing next year to which I have been paying steadily every month for the past 24 years and if I am lucky, judging by the the ‘red’ warning letter I get every year I will get 55% of the capital back. Of course there is no mention of the bonuses I was promised 24 years ago. I can only assume the 45% was admin costs or the punters had a bad day in Cheltenham!

    We all know that government is there to make sure that these things do not happen and step in when things go wrong. Indeed the FSA was setup by Mrs T, after Bob Maxwell raided his employees’ pension fund. But as we all know governments themselves are not always good at keeping their accounts in order and being politically motivated they do not always take decisions to safeguard our pension money. We all remember how Soros bet against the Bank and made £1 billion; whereas the Treasury lost some £4bn in one fateful day. Pure politics! Did any heads roll? Besides governments also end up entrusting our ‘pension money’ to the same punters described above albeit on different terms. They supposedly get better terms because governments rarely ‘default’. And this is where the story about ‘Big Greece’ begins !

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