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Grounds Keeper Willy

Huge IOMG pension contribution short fall

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16 hours ago, Phillip Dearden said:

Separate fund? Where?

Do you mean the PSEPR? This does exist and does include some assets so I guess you could call it a fund but it is not at all similar to most pension funds in  that;

a) it is not under separate control

b) employer contributions do not go in here

c) employee contributions do not go in here

d) pensions are not paid out of the PSEPR (and could not be).

The PSEPR is about 109m and is an allocation of both Government Reserves (ie bottom half of Balance Sheet) and Government Investments (top half of BS). It is really a re-labelling of some government cash and reserves...but you could call it a fund if you wanted.

The last audited accounts (2018) showed a pension liability of 3.7bn. The PSEPR is a gesture towards funding this. The real problem is that neither employee or employer contributions were put in a separate place to fund the pension liability. When there is no fund, the concept of an employer contribution is odd, the pensions are funded in full by the employer out of current revenue, some of this is then charged to the PSEPR.

 

The PSPR is basically the money that was in the original schemes that was swiped when GUS came in and other Treasury money that washes through it. It’s running out and will be gone by 2021. It is under (notional) separate control as it’s been explained to me as it’s entirely separate to the GUS. 

Edited by thesultanofsheight

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16 minutes ago, WTF said:

read that back to yourself.

I wrote it carefully.  It's wrong to slag off government workers. They are paid by the government. The fact that the government obtains funds from taxes is immaterial. Government workers are not paid by tax payers.

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where did i slag off government workers ??  ( is dilli one ? ) i just claimed  that other peoples tax is what pays CS wages and therefore what they consider their their tax,  you seemed to say the same eventual outcome in some roundabout way as if it somehow changes the fact.  how many times the papers get shuffled and renamed in between is of no real issue.

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1 minute ago, WTF said:

where did i slag off government workers ??  ( is dilli one ? ) i just claimed  that other peoples tax is what pays CS wages and therefore what they consider their their tax,  you seemed to say the same eventual outcome in some roundabout way as if it somehow changes the fact.  how many times the papers get shuffled and renamed in between is of no real issue.

That's a matter of opinion. Granted if one strictly follows the money than it's one thing but to associate responsibility because of the original source of money that the government pays is another. I guess it can be reduced to blame the system, especially past governments.

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27 minutes ago, thesultanofsheight said:

The PSPR is basically the money that was in the original schemes that was swiped when GUS came in and other Treasury money that washes through it. It’s running out and will be gone by 2021. It is under (notional) separate control as it’s been explained to me as it’s entirely separate to the GUS. 

I don't think so...but I could be wrong.

From 2007 accounts;

10.16Pensions
Isle of Man Government employees participate in twenty-eight different pension schemes. These are all
unfunded schemes which are regulated by the terms of each individual scheme. The net costs of pensions
and other retirement benefits, after allowing for contributions where appropriate from employees, are met
from the Revenue Votes of Executive Government on a pay-as-you-go basis.

I take this to mean that in 2007 there were several schemes (ie pre GUS) and they were unfunded.

From Cabinet Office 2016;

Pay as You Go Schemes
2.1 All of the Island’s schemes (excluding Post Office and Local Government Schemes) are
“Pay-as-you-go” Schemes as they are generally in the UK. There is no fund of money
building up via contributions and investment returns, therefore the contributions received
by employees and employers go straight out to pay both pensions, tax free lump sums and
other benefit payments. Any shortfall is then met from the Public Sector Employees
Pensions Reserve Fund and from General Revenue as determined by Treasury each year.

I take this to mean that in 2016 we had moved to GUS which involved increased contributions, we still had no fund.

PSPA

The PSPA started in 1997 and initially took in transfer values from incoming employees ie monies that would have gone into a fund if we had one. Initially it seems to have received less than £10m pa. The first chunky transfers I can see are £28m in 2007 and £29m in 2008 although I seem to recall a 50m or 60m transfer in this period (but can't find any evidence).

I see no evidence or even suggestion of separate control. The assets and "reserve" side appear on the Government's Balance Sheet. It seems to me that some Government funds have been labelled as funds to assist in meeting pension liabilities. This is a good thing but is not like a conventional pension fund.

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When the UK wised up to the island's VAT scam Mr A Brown had the perfect opportunity to rightsize the CS/PS.

He ducked it (spelling?) and just let the situation get worse.

A classic SEP.

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10 minutes ago, P.K. said:

When the UK wised up to the island's VAT scam Mr A Brown had the perfect opportunity to rightsize the CS/PS.

He ducked it (spelling?) and just let the situation get worse.

A classic SEP.

Lots of nice new Departmental headed paper though. And the creation of the DOI.

His successor did nothing of value either, either in his previous role at Treasury or subsequently later as CM. Despite his own edicts about the size of the pension deficit, the size of government and its silo mentality.

There has been almost a decade and a half passed since the first. We are now about to sample the rewards.

Edited by Non-Believer
Extra bit
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9 minutes ago, P.K. said:

When the UK wised up to the island's VAT scam Mr A Brown had the perfect opportunity to rightsize the CS/PS.

He ducked it (spelling?) and just let the situation get worse.

A classic SEP.

Brown wouldn't have done anything. Expanding the government sector was part of his redistribution of wealth agenda. 

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59 minutes ago, Rog said:

Brown wouldn't have done anything. Expanding the government sector was part of his redistribution of wealth agenda. 

Possibly true, but it has created a monster

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58 minutes ago, Donald Trumps said:

Possibly true, but it has created a monster

Did he care?  For that matter did he have the ability to understand let alone care? 

From having met him a couple of times I very much doubt it.

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2 hours ago, Rog said:

Brown wouldn't have done anything. Expanding the government sector was part of his redistribution of wealth agenda. 

A la Blair economics.

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11 minutes ago, Andy Onchan said:

A la Blair economics.

Far from it.i   I'm loathed Blair and his cabal with a passion but his strategy was to break the political independence of the UK civil Service and install his own yes-men in command.

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26 minutes ago, Rog said:

Far from it.i   I'm loathed Blair and his cabal with a passion but his strategy was to break the political independence of the UK civil Service and install his own yes-men in command.

That's the first time I've seen someone say something good about Blair on MF.

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3 minutes ago, P.K. said:

That's the first time I've seen someone say something good about Blair on MF.

You should go to Specsavers!

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30 minutes ago, Rog said:

You should go to Specsavers!

Nah.

I just figure that if you hate Blair then he must have done something good....

:)

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