economic situation is dire

[peterms]

To be fair, Peter, those links reveal that 46 per cent of FTSE 100 directors were still accruing final salary benefits in generous schemes that typically pay two-thirds of final salary as a retirement income. So for 54 percent of directors, it's not the case. When a scheme is closed (to the hoi palloi or to directors) there can be 2 stages - firstly close it to new employees, but the existing members stay in it, and secondly close it to everyone.

The percentage figures from the links you gave suggest to me that directors are also having their schemes closed and it therefore is certainly (as Risso said) a common experience (more than half of directors from the FTSE 100 not accruing final salary benefits.

Of course what your links also show, is that where the directors may have their DB schemes closed they are rather well compensated for this via other provisions from their companies, whereas the hoi poloi in the private sector most certainly don't get an equivalent level of adjustment.

Yes, your three paras taken together are a fair summary. My argument is with those who claim we're all in the same boat.

I believe it's unarguable that using the proper assessment methodology laid down for reviewing the health of DB schemes, that all but a very small handful are essentially underfunded against their future liabilities, whether they be for directors, hoi poloi or both. This is why they've been closed by the trustees - it's at least partly (mostly) legal thing, though if the Co.s wished to throw enormous sums at them, they could be kept open. By closing them you remove the rolling, forward liabilities, thus scoping the scale of the shortfall to be recovered.

I think it was Labour who mandated that schemes needed to be valued in the way that they now are and every 5 years. The change in valuation method revealed the problems there were, and resulted in them being closed and/or people having to pay more in..etc.

I lay no claim to being an expert on pensions schemes, but the ones I've come across tend to veer between being in surplus (so the trustees think they can take a "holiday" and stop contributing for a year or two) or in deficit, because their complacent assumptions about the stock market didn't quite come to fruition.

Neither case convinces me that entrusting vast sums to fund managers to place bets on the roulette wheel of the stock exchange (and skim profits for their less than brilliant "contribution") is a sensible way to provide for our old age.

People not in DB schemes (or public schemes) are in an unenviable position in many ways, and the state (taxes) will end up having to support them in their old age.

For public schemes that are notionally fully funded, then there is no justification at all for the Gov't essentially taxing the members to "tackle the defecit". For those that are not notionally fully funded, or for which there is absolutely no figures - it's just the Gov't pays - then there is justification for negotiating with the employees what to do about increasing survival ages and the consequences.

What's so worrying is that the alternatives are so poor for everyone. The system is broken, politically and financially.

It doesn't seem like a sensible or sustainable system. So it at least fits the wider economy, then.

[peterms]

Out of interest , would things not be much simpler if public sector workers weren't given pensions and were paid the same way as people in the private sector and then responsible for their own pension provisions ?

also on the pensions front , I've got some info to get my head around for 2013 as it appears our company will have to start paying 1% (for now) contribution to all staff into a pension fund (NEST ) ... it gets tricky as we employ around 600 people on a ad-hoc basis , some may work once or twice a month some 5 days a week .. BUT the inland revenue have already decreed these people are employees and as such I have to give them holiday pay and could potentially have to start giving them a pension .. we pay them £60 a day (+12% holiday pay which i assume it's due pension contributions) ) so that will mean they accrue 60p for a pension every time they work for us , although if they don't earn a certain amount we don't have to pay them I believe ... I've no doubt someone will tell me how it's only fair and just etc but I suspect the only winners are the managers of these funds

It would be simpler if there were a common type of pension provision across all sectors.

I would suggest the broad choices are no enforced provision, or some sort of required provision. If you leave everyone to their own devices, many will not save enough. We all know that. The choice then is between beggars on the streets and reduced demand, or finding more money to support them and pissing off people who have put money aside.

If you require provision, you reduce individual choice (by making it harder for people to choose not to provide for their old age) but greatly enhance the chances of letting everyone have enough to live on in their old age.

The next question is the level of provision, and what we will support via tax incentives. At the moment, a few people get pensions which are far greater than the lifetime earnings of some other people. Such a system seems hardly likely to create mass support for universal pension provision.

I suggest doing away with the traditional taxation limits. Currently, we tax at 40% or 50%. A few years ago, we taxed at 93% (I think). We still effectively tax at 90% in respect of how the HB tapers work for people moving off benefits and into work. But if we taxed at over 100%, we could have a much more equitable pension system. Imagine if anyone whose pension was set to pay more than say £20,000 pa faced tax at 120% of that, rising to 150% or 200% for still higher levels of benefit? That would bring pension levels to a much more level figure pretty damn sharp.

As for your payments for staff you employ, I'm sure someone can knock up a spreadsheet in a couple of minutes which will remove the headache factor. Though as you describe it, it shouldn't be beyond the wit of someone with decent mental arithmetic skills.

[peterms]

Why are you doing the Tories work for them.

He is a Tory. He makes no secret of it (shameless hussy). He is doing his own work for himself, therefore.

[VILLAFC2000]

Why are you doing the Tories work for them.

He is a Tory. He makes no secret of it (shameless hussy). He is doing his own work for himself, therefore.

Exacly.

That still does not excuse the self absorbed obtrusive attitude of "we have a bad one they should have a bad one"

[tonyh29]

I posted as a question , not as a statement or opinion

So your replies are somewhat baffling

[VILLAFC2000]

I posted as a question , not as a statement or opinion

So your replies are somewhat baffling

lol - So do you agree that we should be fighting for fairer pensions for all.

[snowychap]

Nick Clegg vows to get tough on excessive executive pay

Nick Clegg has committed the government to a crackdown on excessive executive pay, saying that austerity in the public sector had to be balanced by curbs on "irresponsible and unjustifiable" pay rises in the private sector.

The deputy prime minister said that ministers would publish firm proposals next month, and the government was willing to legislate if necessary on measures that could include forcing firms to let workers sit on the remuneration committees setting pay rates for top executives.

"Just as we have been quite tough on unsustainable and unaffordable things in the public sector, we now need to get tough on irresponsible and unjustified behaviour of top remuneration of executives in the private sector," Clegg said in an interview on the BBC's Andrew Marr Show.

...

Although he stressed that final decisions had not been taken, Clegg signalled three areas where the government was minded to impose reform.

First, shareholders could be encouraged to take a more active role in restraining pay.

"Shareholders should be given a proper say," he said. "They own the companies, after all. Far too often shareholders are given a blizzard of information they don't understand and they then don't have a binding say over what executives get paid."

Second, firms could be forced to put workers on remuneration committees. And, third, they could be forced to publish information about the gap between average earnings and top earnings in their company.

...more on link

I doubt much will really come of this all.

Going along with the first area as above (i.e. shareholders' involvement), I was wondering whether there was any room for tax incentives on divis for shareholders if pay differentials between those at the top and bottom within an organization were kept to a particular ratio?

I've not thought it through much so haven't thought about the problems which may arise like perhaps depressing pay for those in the middle and the tax benefits being taken by institutional investors who distributed them unevenly to their own executives. Anyway, just throwing it out there.

[TrentVilla]

also on the pensions front , I've got some info to get my head around for 2013 as it appears our company will have to start paying 1% (for now) contribution to all staff into a pension fund (NEST ) ... it gets tricky as we employ around 600 people on a ad-hoc basis , some may work once or twice a month some 5 days a week .. BUT the inland revenue have already decreed these people are employees and as such I have to give them holiday pay and could potentially have to start giving them a pension .. we pay them £60 a day (+12% holiday pay which i assume it's due pension contributions) ) so that will mean they accrue 60p for a pension every time they work for us , although if they don't earn a certain amount we don't have to pay them I believe ... I've no doubt someone will tell me how it's only fair and just etc but I suspect the only winners are the managers of these funds

Holiday pay for temporary workers isn't really anything new though we've been paying that to our temporary workers for years, we just wrap it up in their daily pay for ease.

The pension thing is a new one on me though I have to admit I will need to look into that.

The changes in relation to AWR though are going to have a major impact on any hirer of temporary workers and in turn on the economy and employment figures. Its amazing it hasn't been more in the news over recent weeks and months.

[blandy]

I lay no claim to being an expert on pensions schemes, but the ones I've come across tend to veer between being in surplus (so the trustees think they can take a "holiday" and stop contributing for a year or two) or in deficit, because their complacent assumptions about the stock market didn't quite come to fruition.

Neither case convinces me that entrusting vast sums to fund managers to place bets on the roulette wheel of the stock exchange (and skim profits for their less than brilliant "contribution") is a sensible way to provide for our old age.

Me neither, though i have been reading for a number of years, all the pension stuff I get sent for the scheme of which I am part. Our scheme is in deficit, and has been for a good while - as I wrote on a previous page, somewhere, it's due to pension holiday the Co. took under Thatcher, longer life expectancy being calculated into future liabilities and due to the value of some of the stuff in which it invests being hit. BUT it's got nothing to do with complacent assumptions about the stock market not coming to fruition That's not how it's worked out at all. It has to be valued in line with Government laid down rules. The stock market not growing obviously has been a part of the reason for the deficit in the scheme - clearly if you invest in stocks and some of them fall in value, then you take a hit.

But it's actually not a glorified gamble. It's responsibly run, I believe, Peter.

[tonyh29]

Holiday pay for temporary workers isn't really anything new though we've been paying that to our temporary workers for years, we just wrap it up in their daily pay for ease.

it's what we used to do until one day someone asked for their holiday pay .. we informed them it had already been included .. heard no more and next thing we knew they took us to some form of tribunal .. the half wit judge ruled that we couldn't possibly expect someone to save their own money for holiday pay and that we should have kept it for them and paid it to them "on demand"

which may actually be the official wording on the matter if i recall having looked into it further ....

I suspect if you openly itemise it as a separate line item thus making it clear you will be Ok .. but then that is what we thought as well ..now we accrue it all and pay them twice a year as a separate payment but if anyone wants it "on demand" they can do so ...

[VILLAFC2000]

I posted as a question , not as a statement or opinion

So your replies are somewhat baffling

lol - So do you agree that we should be fighting for fairer pensions for all.

???

[Risso]

also on the pensions front , I've got some info to get my head around for 2013 as it appears our company will have to start paying 1% (for now) contribution to all staff into a pension fund (NEST ) ... it gets tricky as we employ around 600 people on a ad-hoc basis , some may work once or twice a month some 5 days a week .. BUT the inland revenue have already decreed these people are employees and as such I have to give them holiday pay and could potentially have to start giving them a pension .. we pay them £60 a day (+12% holiday pay which i assume it's due pension contributions) ) so that will mean they accrue 60p for a pension every time they work for us , although if they don't earn a certain amount we don't have to pay them I believe ... I've no doubt someone will tell me how it's only fair and just etc but I suspect the only winners are the managers of these funds

Holiday pay for temporary workers isn't really anything new though we've been paying that to our temporary workers for years, we just wrap it up in their daily pay for ease.

The pension thing is a new one on me though I have to admit I will need to look into that.

The changes in relation to AWR though are going to have a major impact on any hirer of temporary workers and in turn on the economy and employment figures. Its amazing it hasn't been more in the news over recent weeks and months.

AWR has the potential to be a right pain in the arse for employers. I'm surprised it wasn't watered down when it came in in October, as for all the talk of reforming employment legislation, this is one piece that makes things more difficult for employers.

[TrentVilla]

AWR has the potential to be a right pain in the arse for employers. I'm surprised it wasn't watered down when it came in in October, as for all the talk of reforming employment legislation, this is one piece that makes things more difficult for employers.

Forget potential mate it is a pain in the arse right now for employers up and down the country as well as those working in the provision of temporary workers.

I can't even begin to tell you the amount of time I've spent on this in the last 6 months or the number of board meetings it has dominated.

The impact of AWR is yet to be felt due to the 12 week qualifying period but that deadline is fast approaching and the wave will start to hit.

As for watering it down there really wasn't an option to do so, the government took a half hearted look at it and realised as much and said they would look again in 12 months.

It is ironic that the government are talking about changes to employment law and reducing the number of tribunal's when this single piece of legislation will likely result in a huge spike in claims.

Still it isn't actually the correct government's fault on this one, the blame for the implementation of AWR lies with the previous administration and a deal they did with the unions a few years ago.

The impact of AWR really could be crippling for the UK economy and jobs market which has benefitted hugely in the last decade by its ability to utilise its temporary work force.

While the AWR comes from European legislation and as such is applied across the continent we have seriously disadvantaged ourselves because of the way in which we have implemented it.

The worst thing about it for me though is that it won't even have the desire affect, those people who this legislation was introduced to help will either end up out of work or on a Swedish derogation contract earning exactly what they were previously.

Utter stupidity.

[Risso]

We've noticed a big drop off in contracts being extended part the 12 week deadline which is obviously the problem timeframe.

[snowychap]

The worst thing about it for me though is that it won't even have the desire affect, those people who this legislation was introduced to help will either end up out of work or on a Swedish derogation contract earning exactly what they were previously.

Utter stupidity.

So, for whose benefit was this introduced?

What was the desired effect?

Who is baulking at the consequences of its implementation?

The incidence of the costs of this legislation falls upon whom?

[bickster]

The worst thing about it for me though is that it won't even have the desire affect, those people who this legislation was introduced to help will either end up out of work or on a Swedish derogation contract earning exactly what they were previously.

Utter stupidity.

So, for whose benefit was this introduced?

What was the desired effect?

Who is baulking at the consequences of its implementation?

The incidence of the costs of this legislation falls upon whom?

Sometime soon you might post an opinion of your own, possibly?

Instead of posting a bunch of questions you already know the answer to

To quote a post I just deleted, it does nothing to move the debate along

[snowychap]

Sometime soon you might post an opinion of your own, possibly?

Please see a few posts back on the previous page for an example of where I may have posted 'an opinion of my own' on this thread's topic.

link

I doubt much will really come of this all.

Going along with the first area as above (i.e. shareholders' involvement), I was wondering whether there was any room for tax incentives on divis for shareholders if pay differentials between those at the top and bottom within an organization were kept to a particular ratio?

I've not thought it through much so haven't thought about the problems which may arise like perhaps depressing pay for those in the middle and the tax benefits being taken by institutional investors who distributed them unevenly to their own executives. Anyway, just throwing it out there.

So. Why did you post what you did?

Instead of posting a bunch of questions you already know the answer to

Edit: As far as the agency regs, I haven't got an earthly (I thought I'd ask questions of Ash who's business would suggest that he knows the form on the matter) but if you want to make something of it then go ahead.

[TrentVilla]

So, for whose benefit was this introduced?

What was the desired effect?

Who is baulking at the consequences of its implementation?

The incidence of the costs of this legislation falls upon whom?

1. For the benefit of temporary workers particularly the lower paid temporary workers. There is a incorrect belief that all temporary workers are ill treated and under paid when in reality many temp workers enjoy better conditions and pay than their permanent counterparts.

2. The desired effect was to give all temporary workers the same rights (not employment rights) as their permanent counterparts. Most of these rights are in effect from Day 1 such as right to facilities eg a canteen, gym or child care. The right for equal pay kicks in at 12 weeks but the 12 weeks doesn't need to be solid service.

Imagine it like a clock, only after a 6 week break does the clock re-set. So you could work 6 weeks then have 6 weeks off and then go back and work 6 weeks and that would see you qualify. This is a simple example but the reality in most temporary sectors is far more complex and as you can imagine tracking is a huge job for agencies and for the end hirer.

Oh and just as an extra headache if a temporary worker is with more than one agency you are supposed to track the work they do through the other agencies as well.

3. Everyone involved in the employment of temporary workers and seasonal workers from the agency to the end hirer. To give you a tangible example to give this some context...

I recently attended an AWR consultation through the REC and was speaking to the HR Director of a household name bakery firm that produce bread. Their production is closely linked to the weather as consumer purchase patterns follow it, so they don't have a set production run and therefore depend on huge numbers of temporary workers.

If they were to fully implement AWR they have calculated that their staff costs will rise by £2m a year, that is a huge chunk from their profit as they can't pass the cost on to the consumer.

They are now looking at ways of avoiding AWR which will result in either putting people on Swedish Derogation contracts which effectively removes the rights around pay or stopping using temporary workers.

So option one the workers are no better off or option two some of them are going to be out of work while the agencies that formerly supplied them will go to the wall.

4. It depends on the industry. Some temporary agencies will take some of the cost others will pass it on to the hirer, some hirer's will swallow the cost others will pass it on to the consumer.

While the principles of AWR are good the reality of the legislation they have introduced is ill thought through, too heavy handed and will not have the desired effect.

At a time when unemployment is an ever increasing problem the introduction of AWR couldn't be more ill advised or poorly timed. It will damage the UK job market and seriously impact employers access to a temporary flexible labour market which has been crucial in our economy the last 10 years and we are putting ourselves at a serious disadvantage to our European counterparts.

[b6bloke]

So, for whose benefit was this introduced?

What was the desired effect?

Who is baulking at the consequences of its implementation?

The incidence of the costs of this legislation falls upon whom?

1. For the benefit of temporary workers particularly the lower paid temporary workers. There is a incorrect belief that all temporary workers are ill treated and under paid when in reality many temp workers enjoy better conditions and pay than their permanent counterparts.

2. The desired effect was to give all temporary workers the same rights (not employment rights) as their permanent counterparts. Most of these rights are in effect from Day 1 such as right to facilities eg a canteen, gym or child care. The right for equal pay kicks in at 12 weeks but the 12 weeks doesn't need to be solid service.

Imagine it like a clock, only after a 6 week break does the clock re-set. So you could work 6 weeks then have 6 weeks off and then go back and work 6 weeks and that would see you qualify. This is a simple example but the reality in most temporary sectors is far more complex and as you can imagine tracking is a huge job for agencies and for the end hirer.

Oh and just as an extra headache if a temporary worker is with more than one agency you are supposed to track the work they do through the other agencies as well.

3. Everyone involved in the employment of temporary workers and seasonal workers from the agency to the end hirer. To give you a tangible example to give this some context...

I recently attended an AWR consultation through the REC and was speaking to the HR Director of a household name bakery firm that produce bread. Their production is closely linked to the weather as consumer purchase patterns follow it, so they don't have a set production run and therefore depend on huge numbers of temporary workers.

If they were to fully implement AWR they have calculated that their staff costs will rise by £2m a year, that is a huge chunk from their profit as they can't pass the cost on to the consumer.

They are now looking at ways of avoiding AWR which will result in either putting people on Swedish Derogation contracts which effectively removes the rights around pay or stopping using temporary workers.

So option one the workers are no better off or option two some of them are going to be out of work while the agencies that formerly supplied them will go to the wall.

4. It depends on the industry. Some temporary agencies will take some of the cost others will pass it on to the hirer, some hirer's will swallow the cost others will pass it on to the consumer.

While the principles of AWR are good the reality of the legislation they have introduced is ill thought through, too heavy handed and will not have the desired effect.

At a time when unemployment is an ever increasing problem the introduction of AWR couldn't be more ill advised or poorly timed. It will damage the UK job market and seriously impact employers access to a temporary flexible labour market which has been crucial in our economy the last 10 years and we are putting ourselves at a serious disadvantage to our European counterparts.

I dont envy you! Your post is the first I have heard of this though I am H & S and not HR but just spoke to my boss about it (HR) and she said that as from October we stopped using agency workers which is massive for us as we employ a lot! She said that we are going down the lines of using temporary contracts from our own payroll.

This is typical EU crap. Small businesess will of course suffer as they did we the change in legislation with expectant mothers not having to return to work after having a child which I think is fair to a point but when small businesses are at breaking pointy they are effecttivley paying for an extra member of staff for this time.

[snowychap]

So, for whose benefit was this introduced?

What was the desired effect?

Who is baulking at the consequences of its implementation?

The incidence of the costs of this legislation falls upon whom?

1. For the benefit of temporary workers particularly the lower paid temporary workers. There is a incorrect belief that all temporary workers are ill treated and under paid when in reality many temp workers enjoy better conditions and pay than their permanent counterparts.

2. The desired effect was to give all temporary workers the same rights (not employment rights) as their permanent counterparts. Most of these rights are in effect from Day 1 such as right to facilities eg a canteen, gym or child care. The right for equal pay kicks in at 12 weeks but the 12 weeks doesn't need to be solid service.

Imagine it like a clock, only after a 6 week break does the clock re-set. So you could work 6 weeks then have 6 weeks off and then go back and work 6 weeks and that would see you qualify. This is a simple example but the reality in most temporary sectors is far more complex and as you can imagine tracking is a huge job for agencies and for the end hirer.

Oh and just as an extra headache if a temporary worker is with more than one agency you are supposed to track the work they do through the other agencies as well.

3. Everyone involved in the employment of temporary workers and seasonal workers from the agency to the end hirer. To give you a tangible example to give this some context...

I recently attended an AWR consultation through the REC and was speaking to the HR Director of a household name bakery firm that produce bread. Their production is closely linked to the weather as consumer purchase patterns follow it, so they don't have a set production run and therefore depend on huge numbers of temporary workers.

If they were to fully implement AWR they have calculated that their staff costs will rise by £2m a year, that is a huge chunk from their profit as they can't pass the cost on to the consumer.

They are now looking at ways of avoiding AWR which will result in either putting people on Swedish Derogation contracts which effectively removes the rights around pay or stopping using temporary workers.

So option one the workers are no better off or option two some of them are going to be out of work while the agencies that formerly supplied them will go to the wall.

4. It depends on the industry. Some temporary agencies will take some of the cost others will pass it on to the hirer, some hirer's will swallow the cost others will pass it on to the consumer.

While the principles of AWR are good the reality of the legislation they have introduced is ill thought through, too heavy handed and will not have the desired effect.

At a time when unemployment is an ever increasing problem the introduction of AWR couldn't be more ill advised or poorly timed. It will damage the UK job market and seriously impact employers access to a temporary flexible labour market which has been crucial in our economy the last 10 years and we are putting ourselves at a serious disadvantage to our European counterparts.

Okay, thanks for that.

Just to clarify something, it's 12 weeks (not solid as you've said) working in a placement at a specific company, is it?

How does that work for a large group? Say someone did 6 weeks temping at Waitrose and then 6 weeks at John Lewis (just as an example)?

It does sound a hell of a ballache in terms of the administration of it (especially where it is not a simple continuous placement for more than 12 weeks).

When you mention your example (and obviously I'm not trying to extract details about their business), are the extra costs mostly the increase in pay or is that the administration, tracking and so on, too?