ΒιΆΉΤΌΕΔ

The rich get richer, the poor get poorer - Our economy is in turmoil, and it WILL get worse.

Back to the 70's

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When will the Unions live in the real world? Not content with demanding ridculous pay rises, when the most of rest of the (non Unionised) UK workforce has had pay freezes, reductions or even redundancies. Final salary schemes are horrendously complex and expensive for Employers (thanks in no small part to the constant "tinkering" by various Governments over the years).

To still be allowed to continue membership of a final salary scheme is a privilege, even with Salary and pension increase caps.

If the members' want to keep this privilege, they will have to stump up.

And I believe that pension scheme deficits are entered onto Company balance sheets and affect profit margins?

Fascinating..... could this be a taster of things to come, within certain sectors of the economy?

In industries which are doing well, perhaps it's the case that organised labour, as opposed to organised capital, is in a stronger position now, especially where the capital owners are highly geared of course.

Clearly this doesn't apply to industries which are tanking, where the ridiculous credit boom has resulted in pointless investment in huge structural overcapacity (airlines, car manufacture...... and banking).

Hey, it's the "very very nice man in the patrol vehicle" vs the private equity/merchant banker!

In this situation I think I forecast a huge climbdown by the bankers....

PS Why is the AA doing well? Because people are not buying new ones and need to make their existing cars last a bit longer, so think the service is worth paying for....

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I must admit Robert, I thought there was a bit more news around than this.

On a more serious note, if the current Govt had not raided the pension funds from the moment they took office then it is unlikely that there would have been this hole in the AA's fund.

It never fails to amaze me that the media constantly report the size of pension deficits but never seem to make the connection that the deficits = the tax taken by Govt.....

This is going to be a problem until all of the baby boomers have mooched their way out of the system - their grand children can't afford to buy property, have to pay for their education and have little hope of enjoying a similarly long and prosperous retirement.

The only difference between the baby boomer cohort and a plague of locusts - you can still eat the locusts when they're done.

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Millions are being cheated out of a proper occupational pensions and yet hundreds cry 'equality of misery' and 'live in the real world'. Where there are decent pension schemes that not only pay a fair proportion of final salary but adjust for inflation (not average earnings)they must be put to the sword for the greater glory of obscene management salaries and bonuses. It will be the taxpayer who will have to foot the bill of giving basic support for the impoverished retired who will have to scramble for all sorts of menial jobs at minimum wage just to live.

There has been a massive and successful attack on the real living standards of ordinary working people - if it is not pensions it is their everyday occupational terms and conditions in both the private and public sector. Well No. 3 in your admiration of the 'race to the bottom' I hope you meet with success!

This could be a litmus test for changes in public sector pensions after the next election.

#3 Tallowah
Did you not read the detail of the article. The company is doing perfectly well in the recession. Not surprising as private equity funds tend to target reliable cash flow rather than anything risky. So there is no need for these cuts in benefits. The bosses are just stealing from the workers pockets. But there is no way of off-shoring this workforce or moving the operation to another country. So a strike would be extremely damaging to the value of their assets and the managers bonuses. So I think the union is being very sensible in threatening a strike in this case and I think management will accept their bluff has been called and back down.

The big holes in private pensions is a huge problem in the UK (and elsewhere).
There is a simple golden rule .....DO NOT TRUST YOUR PENSION TO THE CITY OF LONDON.
The City will do very nicely out of your contributions....but you will not.
The City is not what it was, dependable, reliable.
It is now just a casino....and they are gamblimg with your pension, endowment etc.
Sorry to whinge at all you financial folks in the City, but you know that you have blown it, whilst doing well for yourselves.
The reputation of the City to manage other peoples' money now stands somewhere between incompetence and roulette.
Pension funds must now look to other forms of investment.....the City has stuffed them again, and again.
This form of capitalism is not working, and the loser is (once again) the working man.
If all you City folks end up crying into your champagne, don't blame me....look at your abysmal recent record on pensions.

I guess it's time to say what we all know to be true, and these poor chaps at the AA are finding out......CAPITALISM HAS BECOME JUST ANOTHER WORD FOR THEFT.
The City must get its' house in order, or the public will boycott it.

No blame can really be applied to the fund managers, it's the system which is at fault.
There are a lot of very sharp operators in finance these days, and the pension funds are basically.....sitting ducks.

>> The AA became the lightning rod for criticisms that private equity firms were asset strippers that load up companies with dangerous quantities of debt.

Well, they are. I can't think of a single company that was bought out by a VC/PE firm that didn't suddenly become massively "leveraged". People wonder why the pension funds are in such trouble, simply because these companies end up re-floated with the debt, the pension debt, plus interest payments from lease-and-buyback schemes. Strange that they don't get to keep the cash they saved up.

Dear Robert,

Is u sleepin.. ;)

Regulation driving banks bananas

"A study out today from the Centre for of the Study of Financial Information and the accounting firm PricewaterhouseCoopers rates the politicisation of banks as the number one risk facing the global banking industry.

The annual "Banking Banana Skins" survey, which polled 443 bankers, regulators and observers put credit risk and excessive regulation as the other top two threats to a sustained recovery.

According to the survey, bankers worry that political oversight could distort their lending decisions while non-bankers, such as regulators, believe bank rescues have created moral hazard with expectations that banks will always be bailed out by governments."

...continues here:

P.S.
My comments are not aimed at any past or present owners of the AA, but at the financial industry in general, and the way that it has destroyed the value of so many pension funds over the last few years.
If any area is ripe for more regulation and control, it is pension funds.
And in the City, one mans' losses are another mans' gain, so the "losses" in any pension fund don't just disappear or evaporate.....they go into someone elses' pocket.
Is this really fair on ordinary working folks like the blokes at the AA?

and yet the mp's will get their generous expenses and pensions, as will the PM, as will the vultures who asset strip as will the treasury who took a piece of the cake, as will the boys in the city take their fees even if the funds are not performing, as will many more who seen thousands wiped from their pension pot with the latest theft of the financial system that gambled everything lost but still won, as a matter of interest what do your common purpose chums have to say about this ?

10 years ago The AA had no debt and many buildings and a training school to be proud of.
Now it owes in excess of Β£4.5 Billion and the training is done in a porta cabin ,so this is progress.
Its about time someone stood up to the venture capitalist.

For more info & comments from the AA CEO go to

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What do you think about crunch in 1929 AD? It will be once again...

the britisg economy will get weaker and weaker

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one of those hard working, super smart bankers we keep hearing so much about.

ΒιΆΉΤΌΕΔ - 3 February 2010
'The papers have plenty to say about the Tories' economic promises put forward by shadow chancellor George Osborne.

The Daily Telegraph's leader column declares that Mr Osborne has "charted a sensible route out of the morass in which the economy languishes".

Jonathan Freedland, writing in the Guardian, mocks the party for what he sees as a U-turn on public spending.'

Osborne may well be onto a winner - So let's have a debate about a strike at the AA.

FSA FINALLY GROWS SOME CAJONES!

β€˜Banks told to comply on bonuses or lose UK banking licences in shock FSA ultimatum’


Turner could lose some dubious friends in the City over this...but he would make many new friends (with integrity) elsewhere.

AA - Alcoholics Anonymous?

Grouped with Saga - you live and learn!

How much of a difference will a strike make to the service?

I broke down on the M6 a few of years ago. A contractor arrived to see what he could do; he told me he was getting so much work as a contractor he barely saw his family, and his part-time worker was working 60 hours a week! He left me with the impression that most of the mechanics were.

I'd like to see the figures that show the change of the tax treatment of UK dividends has caused this in its entirety.

Let's look at the following 1) The regulatory response to Robert Maxwell 2) Portfolio management failures 3) Increased longevity.

The AA part of the same group as β€œSAGA the pensioner’s champion” got to make you laugh!

So on one hand Acromas tries to destroy AA staff pensions &
On the other hand Acromas also own SAGA the pensioners Champion.

At the end of the day Acromas are out to make as much money as they can with NO reguards for any one elce.

Good pensions funds are really now a thing of the past. Even the good ones in profit like Boots have rather spitefully been closed by their foreign owners. What the government must realise is more and more people will be relying on state handouts in the future. A government unit surely must be set up to monitor these closures. If a well run pension scheme like Boots isn't safe from overseas greed, which one is ?

We're all in this..... ahahahahahahahahahahahahahahahahahahahahaha!
Sorry... ahem...

We're all in this to..... hahahahahahahahahahahahahahahahahahahahahaha!

Ahem! *cough* ha ha ha ha! *cough*

We're all in this...*snigger*.. toge..*chuckle* toget..*snigger*

I can't say it. I can't say it and not laugh if I know the statement is an outright lie.

These greedy business operators keep trying to make us taxpayers shell out for _thier_ mess. The banks did it too.

Now the AA will cut pensions, then we'll need to pick up the tab to pay more top-up state pension/benefits for _thier_ pensioners.

They're all at it. I'll tell you what - if we have to socialise the pensions and health etc., then why don't we go the whole hog, and socialise the businesses too? If they try these tricks, maybe _we_ should take another look at communism? It can't be any worse than these spongers...

If you are with the AA, don't break down while the strike's on. Or at least keep the phone number of a tow truck guy in your wallet.

AA staff need to learn to tighten their belts and show some restraint like the executives at Goldman Sachs.

@ yam yzf

While I'm in total agreement with you about the disastrous effects of Gordon's private pension policies I think there's more to the UK pension’s saga than just that.
In the last twenty-odd years we've seen loads of companies taken over by Private Equity groups and large corporations, whenever this has happened we've seen the pension funds raided or employer contributions reduced or stopped. This has, in many cases, compounded the problems created by Gordon Brown and in some case has created problems with otherwise healthy pension funds.

As ever, the executive pension schemes have been well funded while the pensions of the average worker have reduced to a mere fraction of their previous value.

By all means hold Brown to account for his disastrous pensions policies but don't let it blind you to the numerous other problems we have with pensions in the UK, most of which have been caused by greedy executives and/or investors.

Pension rights are part of the contract employers make with employees and it should not be possible for employers to degrade those rights.

The pension scheme was used to attract workers into the AA. They were not warned that they might lose these rights at some future time. If they had been warned, the AA would have had to pay better wages to attract the workers it required.

The hedge fund knew of this obligation when it bought the AA and should have factored it in to its calculation of the purchase price paid.

In a country where city operators did not fund and dominate political parties look at the party donations made by individuals associated with hedge funds), it would be illegal to treat workers in this way. As it is the AA men have no alternative to threatening to strike. Let us hope they force a climb down.

Sounds like the shareholders have had their cake already and more besides

Of course "other costs" are a threat to share holders' profit margins... they are one group of stakeholders and the workers are another... They need one another but power-sharing dictates that mutual interest negotiations must trump the temptation for heavy-handed force majeur attempts by one to block the legitimate interests of the other.

These companies can't maintain their pension funds because they are too busy paying bosses' eye watering salaries - Β£2 million to the chief of Acromas last year (yet completely unable to afford any corporation tax...).

It's worth noting that - in this month's Saga Magazine - the head of Acromas has launched a self-congratulatory campaign to 'increase UK pensions' (sic) whilst conveniently attempting to reduce the pensions paid to its AA staff.

I suspect most respectable over 50s and AA members will soon have had enough!

Presumably if the AA goes on strike, then all it's members will be refunded for the days not covered???

directors’ reports and financial statements for the year ended 31 January 2009.

"The two main Group pension schemes ended the year with a
substantial surplus as disclosed in note 10 to the accounts even after
strengthening the scheme mortality assumptions in line with recent
experience. The small deficit on the AA Ireland Pension Scheme is being
addressed with additional employer contributions as agreed with the
scheme trustees"

[Unsuitable/Broken URL removed by Moderator]

This is Acromas Group Holdings official annual Report and financial statements 31 January 2009

Whats changed so dramatically???

An article in the Guardian recently highlighted a boast of increased profits by Alliance Boots and at the same time changes to the Alliance Boots pension fund, from a fixed benefit scheme to a fixed contribution scheme for existing members..
Very little money will be contributed by the company to this scheme and all the risks will be taken on by the employees in exchange for a poor pension on retirement. I assume the company are actually hoping that no one will join the scheme. The figures at present seem to suggest that most employees already realise what a poor substitute this is for their original pension conditions. It amounts to roughly a 16% reduction in remuneration for the staff involved. What a pity the pension fund trustees were unable to stop the takeover in 2007.

This has little to do with government policy apart from the fact that they appear supine in the face of bankers and private equity companies. A labour government should be vigorously pursuing fair shares for working people instead of further enriching the already obscenely wealthy. Similar situation to the AA. I wonder why?