Donald Trumps Posted February 24, 2020 Share Posted February 24, 2020 17 minutes ago, woolley said: I do agree that it's a mess of largesse that should never have been allowed to happen. However, I don't think it will be the disaster that some of you see. As HQ says, the reserve investments have performed well to date, so we have only called upon some of the interest. Tax receipts will continue to grow a little each year. Yes, we will need to find a further £50m per year from 2023, but that is within the fluctuation range of the reserve investment gains. Some years we will hit it, other years will be poorer, so we will need to draw down on actual reserves. There will be more stealth tax rises and, heaven forbid but if necessary, a bit of actual belt tightening. If we really get into trouble, a quiet word with our friends to relax our VAT rules and give us a little extra on account would probably receive a favourable hearing - our share has been growing nicely again in recent years anyway. In extremis, the law could be changed and long term bonds issued. A good few pandemics and having to work longer will see a lot of pensioners off well before the actuarial forecasts anticipate at the moment, and much money will be saved that way. Long term, the whole thing will be inflated away as everything is. The Island is not going bankrupt. It just is not equitable for the taxpayer to fund nice pensions for CSPS folk but themselves receive close to the lowest paying state pensions in western Europe Link to comment Share on other sites More sharing options...
asitis Posted February 24, 2020 Share Posted February 24, 2020 14 minutes ago, Donald Trumps said: A good few pandemics and having to work longer will see a lot of pensioners off well before the actuarial forecasts anticipate at the moment, and much money will be saved that way. Whilst I don't necessarily disagree, isn't it sad we are reduced to a reliance on mortality! Link to comment Share on other sites More sharing options...
Donald Trumps Posted February 24, 2020 Share Posted February 24, 2020 I didn't write that I'm one of the people a corona virus is most likely to take away Link to comment Share on other sites More sharing options...
woolley Posted February 24, 2020 Share Posted February 24, 2020 27 minutes ago, asitis said: Whilst I don't necessarily disagree, isn't it sad we are reduced to a reliance on mortality! I wrote it and ultimately, all pension schemes rely on that, as does much else. Link to comment Share on other sites More sharing options...
woolley Posted February 24, 2020 Share Posted February 24, 2020 43 minutes ago, Donald Trumps said: It just is not equitable for the taxpayer to fund nice pensions for CSPS folk but themselves receive close to the lowest paying state pensions in western Europe It's difficult to compare pension levels across Europe because most countries don't have anything like the scale of private pension provision that there is in Britain. It tends to be provided by the state scheme for higher contributions leading to crazy headlines in the junk press about Spanish pensioners getting £500 a week or more. In reality, only a small elite receive amounts like that, and many are lucky to get around £100. I know plenty of people in that situation as I spend a lot of time there. Link to comment Share on other sites More sharing options...
asitis Posted February 24, 2020 Share Posted February 24, 2020 42 minutes ago, Donald Trumps said: I didn't write that I'm one of the people a corona virus is most likely to take away No I quoted it from woolleys post in yours so it saw it as you. ! sorry. Link to comment Share on other sites More sharing options...
Phillip Dearden Posted February 24, 2020 Share Posted February 24, 2020 5 hours ago, BallaDoc said: As I pointed out in a previous post, we are basically all f****d, and this pension deficit is just one of many symptoms of that. We think of pensions as being a permanent part of the human condition, but in fact they are relatively recent, having been invented in Germany in 1889 and then rapidly adopted by the rest of Europe. Before that, people were looked after in their old age by their children. Pensions are basically a Ponzi scheme which require continuous economic growth to fund them. Take away the perpetual growth, and the pensions can no longer be paid. And you can't have perpetual growth because it's physically and mathematically impossible. It's no coincidence that pensions were invented just as the Industrial Revolution and the British Empire were getting into full swing, because those conditions created the biggest boom in economic growth that the world has ever seen. But unfortunately, it couldn't and didn't last. Isn't it more likely that pensions are changing. Most modern pensions are defined contribution schemes ie you and the employer put some money in and the pension is whatever that fund can produce. With these there can be no deficits. I suggest these will become more common as funding for retirement becomes more problematic. Final salary schemes were attractive to employees but they did create risk for employers and most have now changed, at least in the Private Sector. The IOM Government scheme involves no saving and no fund and so is quite a strain on public finances. I doubt anyone would start such an arrangement now. I would not use the word Ponzi as that was a fraud, there was an intention to deceive. Whilst the IOM CS/PS scheme is not the most cautious thing going, I don't think there has been dishonesty or any desire to deceive. Link to comment Share on other sites More sharing options...
finlo Posted February 24, 2020 Share Posted February 24, 2020 20 minutes ago, Phillip Dearden said: Isn't it more likely that pensions are changing. Most modern pensions are defined contribution schemes ie you and the employer put some money in and the pension is whatever that fund can produce. With these there can be no deficits. I suggest these will become more common as funding for retirement becomes more problematic. Final salary schemes were attractive to employees but they did create risk for employers and most have now changed, at least in the Private Sector. The IOM Government scheme involves no saving and no fund and so is quite a strain on public finances. I doubt anyone would start such an arrangement now. I would not use the word Ponzi as that was a fraud, there was an intention to deceive. Whilst the IOM CS/PS scheme is not the most cautious thing going, I don't think there has been dishonesty or any desire to deceive. The dressing up of "green" taxes to pay for it all is pretty deceitful in my book! Link to comment Share on other sites More sharing options...
BallaDoc Posted February 24, 2020 Share Posted February 24, 2020 9 minutes ago, Phillip Dearden said: The IOM Government scheme involves no saving and no fund and so is quite a strain on public finances. I doubt anyone would start such an arrangement now. I would not use the word Ponzi as that was a fraud, there was an intention to deceive. Whilst the IOM CS/PS scheme is not the most cautious thing going, I don't think there has been dishonesty or any desire to deceive. I agree that there is no dishonesty in the IOM Government scheme, so probably "Ponzi" scheme is not the best description, but I think "pyramid" scheme would be fair. That is where people at the top receive benefits, but these benefits are paid by a much larger number of people at the bottom. As the people at the bottom move further up the pyramid and start to claim benefits themselves, more people have to be recruited to pay in at the bottom end to keep the scheme going. There are always more people at the bottom than the top. Isn't that a reasonably accurate description of the island's strategy to grow the working population? Link to comment Share on other sites More sharing options...
Phillip Dearden Posted February 24, 2020 Share Posted February 24, 2020 3 minutes ago, BallaDoc said: I agree that there is no dishonesty in the IOM Government scheme, so probably "Ponzi" scheme is not the best description, but I think "pyramid" scheme would be fair. That is where people at the top receive benefits, but these benefits are paid by a much larger number of people at the bottom. As the people at the bottom move further up the pyramid and start to claim benefits themselves, more people have to be recruited to pay in at the bottom end to keep the scheme going. There are always more people at the bottom than the top. Isn't that a reasonably accurate description of the island's strategy to grow the working population? I think you have properly described the past, I hope it does not happen again. The IOM population and CS/PS have grown significantly over the last 30 years, retirements will be happening now which will cause a bulge in pension payments. If many thousands of new residents arrive and pay tax, the pension increase might be funded. If we also increased the size of the CS/PS. which to some extent we would have to, we could repeat the problem. I am not convinced we can increase the population by the numbers I have been hearing so this could be academic. We would then have to deal with the problem in the short to medium term. Link to comment Share on other sites More sharing options...
finlo Posted February 24, 2020 Share Posted February 24, 2020 13 minutes ago, Phillip Dearden said: I think you have properly described the past, I hope it does not happen again. The IOM population and CS/PS have grown significantly over the last 30 years, retirements will be happening now which will cause a bulge in pension payments. If many thousands of new residents arrive and pay tax, the pension increase might be funded. If we also increased the size of the CS/PS. which to some extent we would have to, we could repeat the problem. I am not convinced we can increase the population by the numbers I have been hearing so this could be academic. We would then have to deal with the problem in the short to medium term. =we're f####d! Link to comment Share on other sites More sharing options...
woolley Posted February 24, 2020 Share Posted February 24, 2020 4 minutes ago, finlo said: =we're f####d! If by that you mean that we as a population are paying more than we should for the feather bedding of an elite group then I agree with you. If you mean that the Island will go bust, for the reasons I set out previously in this thread, I strongly disagree. Link to comment Share on other sites More sharing options...
Donald Trumps Posted February 24, 2020 Share Posted February 24, 2020 26 minutes ago, Phillip Dearden said: I think you have properly described the past, I hope it does not happen again. The IOM population and CS/PS have grown significantly over the last 30 years, retirements will be happening now which will cause a bulge in pension payments. If many thousands of new residents arrive and pay tax, the pension increase might be funded. If we also increased the size of the CS/PS. which to some extent we would have to, we could repeat the problem. I am not convinced we can increase the population by the numbers I have been hearing so this could be academic. We would then have to deal with the problem in the short to medium term. Makes you wonder - or makes people like me wonder - what the fiscal consequences would be of significant population loss from virus etc Can governments insure income streams, or would that be massively expensive? Link to comment Share on other sites More sharing options...
Donald Trumps Posted February 24, 2020 Share Posted February 24, 2020 16 minutes ago, woolley said: If by that you mean that we as a population are paying more than we should for the feather bedding of an elite group then I agree with you. If you mean that the Island will go bust, for the reasons I set out previously in this thread, I strongly disagree. The island won't go bust but there will be - are - consequences to our economy, with those on low incomes having little free spending money & those on the big pensions spending them off island on shopping trips & exotic foreign holidays Link to comment Share on other sites More sharing options...
The Duck of Atholl Posted February 24, 2020 Share Posted February 24, 2020 28 minutes ago, woolley said: If by that you mean that we as a population are paying more than we should for the feather bedding of an elite group then I agree with you. If you mean that the Island will go bust, for the reasons I set out previously in this thread, I strongly disagree. Woolley's right the scheme won't be allowed to break the Island. Those retiring now will get something (which is less than those that retired previously) and there will be a slow erosion of CS pension until it becomes manageable. Probably the biggest issue going forward is whether people will join the CS bearing in mind that the principal benefit will be more or less worthless. I suspect that it is more difficult to recruit police etc these days as the benefits and salaries have been eroded. They were always the payback for the shifts worked and the aggravation of dealing with society's lowlife on a daily basis. Link to comment Share on other sites More sharing options...
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