In recent times we hear in these pages from the family of Beatrice Bellman, Maureen Lipman in a carping character Beattie in the old British Telecom advertisement – her clan was concerned. Henpecked son Melvin approaching the maximum well-earned retirement, and his grandson Anthony was in the Prime of his playing career, he heroically ignored it memorable disappointment in achieving the exam takes place in an earthenware dish (“Anthony, people will always need plates”) and sociology (“he gets an ‘ology’ and he says that he has failed!”).
The problems they face, that their employer, BT group, can not afford to pay pensions it promised and men when a friend joined, and he had to invent fiction. Last week, after numerous attempts stalled, a plan profits.
Good news for Melvin Anthony, what about 2 billion pounds of BT cash, plus another 2 billion pounds raised from bonds and the decade of the £900 million annual contributions will be stuffed into the Pension Fund, which is about £11.3 billion to the deficit.
The bad news is that this statement was part of a wider package of upgrades which will see about 13,000 employees will lose their jobs, which, given their age, probably even worse for young Anthony, the more Mature Melvin.
Quite how we all afford dotages we have come to expect this anxiety to many more families than fictional Bellmans, and the ad BT is a reminder of how few, decisions in this area.
The company must Fund pension obligations for their employees. They must also pay dividends to the city, so that different schemes can work effectively for other employees. At the same time, companies must invest in their businesses and provide jobs for employees like Anthony, who, according to his story, may not relish returning to school to retrain.
You’d be forgiven for thinking that this system is destroying itself, to borrow from Marx (in a shocking departure for this column, what Karl, not Groucho). And it is in this difficult position again this week when another former state monopoly, the Royal Mail announces the results.
Like BT, Royal Mail are also trying to remake that his fears will become the company’s crushing pension obligations – but in a much more original way.Usually, there are two form of pensions: traditional defined benefits, where you receive a set pension, which companies complain of “unaffordable”; or, in more modern defined contribution scheme, where your pension depends on how much is in your Personal pot, and the workers complain, to make retirement not afford.
The turn from Royal mail is that he agreed with the communications workers Union offers a hybrid solution – the so-called collective funded scheme (CDC), where the Fund is aimed at, not promise a certain payout.
The idea is that all employees pay into a common Fund (like a defined benefit), and not a personal pot (as in defined contribution). The yield of the investments then can be enhanced for all, as Fund managers do not have to hedge bets, every person approaching retirement. Meanwhile, employers believe that it is more affordable, because the firm is not on the hook set payments and is in certain benefits.
At least that’s the theory. Schematic CDC does not exist in this country and laws should be changed to allow them. Meanwhile, even the Royal Mail admits that nowhere else in the world that is comparable. So will this work?
To answer that, you may have to ask someone so bright and with such foresight that they have received a pass on the exam in “ology.”
Astrology is what it is.