City fat cats are stealing our pensions
In the economic depression into which we're being propelled, the poor and powerless are paying for the mistakes of the rich and powerful.
Nowhere more so than in the grippingly exciting (sarcasm - I'll come back to that) world of pensions. The private sector, in the shape of the banks and the rest of the smug financial services industry, nearly destroys the world economy - and who has to clear up the mess?
Well, first of all, taxpayers have to stump up to save the banks. Then it's public-sector workers - that's all those greedy, fat-cat teachers and civil servants - who are told we can't afford their pensions after all.
Oh, and just for good measure, we're going to raise the state retirement age, so you'll have to work longer so that hedge fund managers can retire at 40.
Ripping off the public
I just wonder why people aren't more angry. Not standing-astride-a-broken-piano-in-the-City-singing-the-Marseillaise sort of angry. More of a write-a-letter-to-the-PM and think-about-voting-Green variety of distemper.
Part of the problem with pensions - and this is why I was sarcastic a moment ago - is that they are so boring.
That's why the pensions industry can get away with its monumental rip-off of the public. The pensions industry has actuaries, whose job it is to decide how long we're going to live. If you want to know when you're going to die, don't ask your doctor, ask an actuary. They're so boring, they're funny. People become actuaries because they find accountancy too exciting.
These people spend all their time working on your mortality, but apparently had not the faintest whiff of when the economy was going to peg it.
This has nothing to do with not being clever enough and everything to do with being too clever. You see, the people who run our pensions aren't interested in serving pensioners, they're solely concerned with serving themselves and the large companies they work for.
Cunningly, they call themselves 'asset managers'. This implies that they look after our assets for our retirements. In fact, big corporations are inclined to regard their pension funds as company assets, rather than the retirement benefits of their employees.
If that sounds unduly cynical, consider this: until the crash of 2008, the City enjoyed the longest run of uninterrupted growth ever. It was a 17-year bull market from the Major/Lamont recession, with just the dot-com wobble at the Millennium. You could argue that it went back further to the boom years of Thatcher/Lawson. The markets were throwing off cash and, with tax breaks, were sloshing it into pension funds.
So what did the big pension fund managers do, those brilliant 'asset managers' with their tracker funds and 'growth' and 'value' models?
They gave their clients pension-contribution 'holidays', that's what. They told these huge conglomerates that they had paid more than enough into their pension schemes to cover their liabilities, so they could have some time off from doing so.
Oh, and they awarded themselves enormous incomes and bonuses for being so brilliant. Same with public-sector pension pots.
And guess what? When the bull market ended with a crash, the pensions industry had run out of dosh. Where's it all gone, eh? That's the question we should all be asking.
The answer's simple. The financial services industry doesn't do rainy days. It only does dosh now, instant gratification. So where's the money gone?
Don't listen to all that claptrap about having to work until you're 108 because the world is awash with old people living longer (as if that's a bad thing). They could have managed those assets to take care of that.
No, the City and big industry nicked your pension money, while the going was good.
Also known as index funds, tracker funds replicate the performance of a stockmarket index (such as the FTSE All Share Index) so they go up when the index goes up and down when it goes down. They can never return more than the index they track, but nor will they lose more than the index. Also, with no fund manager or expansive research and analysis to pay, tracker funds benefit from having lower charges than actively managed funds, with no initial charge and an annual charge of 0.5%.
A bull market describes a market where the prevailing trend is upward moving or “bullish”. This is a prolonged period in which investment prices rise faster than their historical average. Bull markets are characterised by optimism, investor confidence and expectations that strong results will continue. Bull markets can happen as a result of an economic recovery, an economic boom, or investor irrationality. It is the opposite of a bear market.