Top Bosses grab 30% pay rises

Cutting from a newspaper sent to me a couple of days ago from a likeminded cynic. Extract from "Financial Mail on Sunday" May 28th, its gratifying to see that nothing changes, especially highlighted box.

Articles taken from The Daily telegraph, Saturday 19th August 2000.



CITY AND SUBURBAN
After all these years, my pension has turned up, but it's hardly worth the effort.

It is like finding a five-pound note in discarded pair of trousers. My pension has turned up. I had not counted on it. Much has changed since I worked for the company whose pension fund now remembered me, and I am gratified to learn that the money and the records are still there. Indeed, the fund must have been rolling up at compound interest, and should now be worth - well, enough to buy me an annuity of 52p a week. Before tax and inflation, this is. Disappointing, really.

I suppose that the costs of administration have eaten into the fund meaning that a number of people will have earned their livings looking after it, and I get what they have left over.

I suppose, too that I was (in jargon of the pension funds) an early leaver, and thus a loser in the pension sweepstake which forces leavers to subsidise stayers. There is certainly not much to show for the money and effort which were supposed to provide for me in my old age, and if, as the courts have laid down, pensions are deferred remuneration, I am not sure that this pay packet was worth waiting for. It is time that pension schemes like these were pensioned off. Most employers still have them. They were designed for the days when we might have expected to spend a working lifetime with Imperial Chemical Industries and then retire on a decent proportion of our final salary. Working lifetimes are not like that any longer, and no more is ICI. Employers are not monoliths and people move about. Their pension plans need to move with them. As for my long lost fiver, it will hardly take care of my old age, so I spent it.

Captain Bob's legacy

Robert Maxwell stole his company's pension funds. Some years after he bolted with the cash, ministers came along, as they do, to fasten the wrong stable door. They gave pension funds a minimum funding requirement, which meant that they all had to buy the same stocks, issued (oddly enough) by the government. This makes it harder for them to meet their obligations, and companies, which have to foot the bill may well prefer to close their schemes. As it happens, the Treasury has asked Paul Myners to tell it why big investors (like pension finds) have the herd instinct so strongly developed. He can scarcely fail to retort that the minimum funding requirement is guaranteed to make things worse. I hope he will add that a regime which encourages us to make our own choices would not leave us at the mercy of long-lost employers.


In August's Merchant Navy Telegraph, member R. Smith makes the valid point:

"It is my considered opinion that the preservation of the fund is mainly for the benefit of the professionals who operate the fund".

How true this is when the members whose money they manage are the only losers whether they be active or pensioners, it's time for a shake up of not only the Trustees but the Pension Fund Administrators themselves.