effs post
Theyhaving a laugh aint they
A recent article in the Financial Times, noting that life expectancy had begun to fall, particularly among the elderly, was remarkable for its utter indifference to the possible causes and the adverse implications of what is an unprecedented phenomenon in peacetime, in the absence of epidemics or particularly harsh winters.
It is quite extraordinary. For decades after World War II, it was taken as an article of faith that better health care and improved living conditions would mean a continuing fall in mortality. Now people are dying younger and all the newspaper of the financial elite can do is note the likely benefits to the corporations: a reduction in the pensions deficit!
At the same time, it totally ignores the fact that pension funds represent the deferred wages of millions of workers who have paid into the funds. Neither does it mention that the deficit, estimated at a massive £2 trillion in total—more than the UK’s GDP—itself is entirely the product of the financial elite’s own avarice, and threatens future and existing retirees with penury.
Pension deficits have risen sharply over the last decade. The deficits of Britain’s largest 350 corporations rose 9 percent between March and April to £145 billion, according to pension experts at Mercer. Eight of the top FTSE 100 companies—most notably British Airways owner International Airlines Group—have pension liabilities larger than their equity market value.
The deficits have not risen because the corporations have no money. Quite the contrary. They routinely pay out more in dividends than they contribute to the pension fund. Last year, a survey by Lane Clark & Peacock, the actuarial consultants, found that FTSE 100 companies with “defined benefit” schemes, which offer a guaranteed income in retirement, paid £71 billion in dividends in 2015 compared with £13.3 billion in pension contributions. It calculated that nearly a third of FTSE 100 companies could have cleared their pension deficits in 2015 with the cash they handed to shareholders. The failed high street retail chain BHS paid out hundreds of millions of pounds to Sir Philip Green’s family as its pension deficit widened.
So it is not that they cannot afford to wipe out the deficit; they refuse to do so.
The FT article, headlined “Shift in life expectancy promises £310bn cut to pensions deficit,” noted that recent changes in mortality rates showed a reduction in a 65-year-old man’s projected life expectancy of nearly four months, and that of a 65-year-old woman of nearly six months, compared with estimates made in 2015. Tellingly, the FT called this sharp reduction in life expectancy for older people a “slowing improvement in life expectancy.”
According to new estimates by PwC, the global financial consultants, this sharp reduction in life expectancy would have a positive impact on the financial health of the 5,800 UK companies that sponsor “defined benefit” pension schemes, cutting a massive £310 billion from the total £530 billion funding shortfall. PwC estimated that the total liabilities for all occupational pension schemes, which cover about half the working population, are about £2 trillion
Posted by jeffrey davies ] on 13 May 2017
