Pensions… October 14, 2011
Posted by WorldbyStorm in Economy, Irish Politics.trackback
Reading Fintan O’Toole’s column this week on public sector pay [which was interesting but could have been considerably more rigorous, not to mention convincing, if he’d compared not just starting salaries but those throughout careers] I was struck by a comment from the indefatigable Michael Hennigan of FinFacts:
Fintan O’Toole rightly refers to Peter Sutherland’s substantial public sector pension for his short time as Attorney General.
He however ignores the substantial benefit of the same pension system for everyone else in the public sector compared with the minority in the private sector who have occupational pensions and real returns on managed funds have been negative over 10 years.
Now the Government wants a two-tier workforce more than 40 years after the battle began for equal pay for equal work for women — who would want to upset so many sacred cows by daring changing existing privileges?
What is galling for Irish private sector workers is that it is official public policy to keep employer social security costs low and thus the two-track society with pensioner poverty for many is inevitable.
I agree with Hennigan, there is a tiered system of pension provision, but it isn’t two-tier, it’s three tier. On the first two tiers are those covered by public pensions and those covered by private pension schemes [his ‘minority in the private sector’], and in truth those two tiers are not entirely dissimilar – those who are fortunate enough to have employers, whether state or private sector, who will make contributions, and then there is everyone else who has only the state pension to fall back upon.
It’s telling to see how he pitches the first two against each other and nary a word about the rest.
And unfortunately it is here that we see a genuine injustice at work. That the state doesn’t provide a universal pension scheme that crosses both public and private sector and is of such value that it offers a real living income for those who have retired [and then for those as want it in either public or private sector the opportunity to top up].
But why would that be? Hennigan seems to point the finger at the government, and also implicitly at the public sector [why else the continual focus on it], but as I’ve noted here before, you’ll find a reason much closer to the private sector, indeed just go consider the Pensions industry contribution to the Green Paper on Pensions during the middle of the last decade to see evidence of same.
If there is a serious will to change this then it’s time to eschew the usual rhetoric extant in these discussions and start recognising the injustices meted out to all those who fall outside private or public pension provision [and by the way I'm not attacking those within those structures, that's the way the situation has developed, but it has to be reformed] and start pointing the finger at those who are driving away from universalism of provision.
O’Toole’s article opened a can of worms and the responses to it on the Times’ website seem to be too co-ordinated in their argumentation to be the work of disparate individuals….
Hennigan et al should be up-front about what they want: for a reduction of public sector pensions to the extent that public sector workers will share in the current poor arrangements ‘enjoyed’ by private sector workers and that future pensioners, regardless of whether they were employed in public or private sectores, will all share extreme poverty and diminishing pensions.
There are a couple of positions that could be articulated by good faith commentators on pensions to demonstrate that they are, in fact, concerned about the welfare of current and future pensioners. These are:
- Retention of current retirement ages for all workers
- banning of defined contribution pension schemes and the universalisation of defined benefit schemes in the private sector
- severe mandatory prison sentences for company directors who dip into pension funds
- the prioritising of pensioners and pensions funds in dispersal of assets of liquidated companies including the personal wealth of company directors where there is a deficit
- making company directors personally liable for pension funds and for ensuring that no shortfalls arise on an ongoing basis
Anyone not making some or all of the above arguments couldn’t care less about private sector pensioners. Once Hennigan and the rest of his fellow travellers, much in evidence in the comment’s thread following O’Toole’s article, succeed in reducing public sector pensions to poverty levels, something they could well achieve in the medium term, they’ll forget about private sector pensioners and the latter’s travails.
Pensions are about power as much as anything else and none of the above suggestions could be ever implemented under the current capitalist regime as all would signal a huge transfer of resources, entitlements and, consequently, power to ordinary workers. Something that would horrify, Hennigan, Sutherland and quite possibly O’Toole, too.
Anyway, the pensions debate may all be academic as it’s now official EU policy to close the gap between retirement age and life expectancy following the agreement of the ‘Euro Plus Pact’. So, maybe Fin Facts can sleep a bit more easily knowing that states are committed to working their populations to as close to death as possibly and that their ideal world of zero pensions for ordinary workers is slowly evolving into reality.
And it’s ironic that the ‘levelling down objection’ thrown constantly against egalitarian and socialist positions can be more reasonably applied to the Right who seem dedicated to levelling the wages, pension and working conditions of workers to the lowest politically possible level.
Spot on re levelling down.
Pension tiers (tears):
Private sector big business bosses
Ministers and politicians
Top civil servants, Judges
Other excellerated public sector pensions (eg Gardaí)
Public service pensions
Private sector decent pension schemes
Private sector crap pension schemes
Private sector pension schemes devalued on Stock Market
Private sector pension schemes gone bust
Construction sector pension schemes not or partly paid into
All those private sector workers, community sector workers, and others in the population who have no pension scheme except the state pension
Those with no pension at all
That’s true too.
I thought O’Toole’s article was about Sutherland’s call for a reduction in public sector pay and was referring to Sutherland’s pension rhetorically.
I would add a point. Because we are living a little longer they say we should work longer. Looking at pensions in isolation this would make sense. But with youth unemplyment going through the roof surely it would make sense to encourage people to retire early. This would allow young people to get started.
I would add a point about a maximum salary and penion in the public service.
Yes, that would make sense Jim, but what’s sensible, equitable and humane and what the EU have planned for us are light years apart. From the Euro Plus Pact document (EUCO 10/1/11 REV 1, CO EUR 6, CONCL3), page 18 on the ‘Sustainability of Pensions, health care and social benefits’:
Reforms necessary to ensure the sustainability and adequacy of pensions and social benefits could
include:
• aligning the pension system to the national demographic situation, for example by
aligning the effective retirement age with life expectancy or by increasing participation
rates;
• limiting early retirement schemes and using targeted incentives to employ older workers
(notably in the age tranche above 55).
However, because this policy document is prefaced by a concern for social inclusiveness the Irish Labour Party and Fintan O’Toole will swallow it whole without reading the rest of it.
One small thought to add to above, worth looking at the class spread of mortality rates. Just let’s say that higher retirement ages work against working class people.
“• limiting early retirement schemes and using targeted incentives to employ older workers (notably in the age tranche above 55).”
Capitalists can only survive when they get us to consume their goods; whether it be a car, or better yet a car loan. The 55+ age group represents two distinct categories – those without or only paltry pension provision (and this group will grow in the future) and those who have assets and some savings but whose consumption in face of austerity and the general onslaught of commodification of all human activity is declining as they view a bleaker future.
Those without pension provision and little savings must work until they die. Those with assets must be made to work to maintain their assets or risk losing them to the austerity economy. In either case, the European directive is a legistlative attempt to keep all workers at the grindstone of money circulation while facing ever declining ability to increase their share of the economic pie.
Capitalism from cradle to the grave for labour: become commodity, consume, and ultimately be consumed.
For the likes of Sutherland and his ilk, we are not the enemy nor people. We are merely the intermediary between his product and his profit.
Every bit of economic legislation in Ireland and Europe, including so-called treaties, have been nothing more than the codification of indentured servitude of labour to Sutherland and their ilk. In their eyes, we do not exit to live but to serve their profit motive. We are Ireland Inc.
If I thought that Michael Hennigan and his cohorts really gave a damn about the lack of pension provision for ordinary private sector workers, I’d pay attention to him.
[...] Does this make any sense? First up it’s the usual boilerplate we’re served on the topic. Much the same, no – almost precisely the same, was said by Michael Hennigan of Finfacts some weeks back. [...]