Reply to post: Re: But I'm no actuarial expert !

Form an orderly queue, people: 31,000 BT staff go to Openreach in October

Anonymous Coward
Anonymous Coward

Re: But I'm no actuarial expert !

"Actuaries are extremely good at processing facts and past statistics."

That's the kind of thing people used to say about corporate auditors and accountants, various of which are now exposed as charlatans with about as much reliability as an estate agent selling hot London property. "Modern" actuaries are heading down the same road.

"I'm pretty sure that BT could have rearranged things so that the pension funds wouldn't have been seen as tax evasion"

BT were far from the only company playing the pension holiday game; blaming the tax laws is misdirection at best. Does the name Adair Turner mean anything in this context? It should.

As Director General of the CBI in the relevant period, Adair Turner was leading the CBI's campaign for occupational pension schemes to take "contribution holidays", *regardless* of what the employer's tax position might be.

Subsequently, Baron Turner (as he is now) may have changed his tune on pension holidays and in particular Brown's role, see e.g. in 2005 when as chair of the UK Pensions Commission he told the ft that

"The pros and cons of [Brown's] removal of advanced corporation tax in 1997 can be debated: a case can be made that it created greater equivalence of tax treatment between retained and distributed earnings.

In retrospect however it was one among a large number of measures which increased the strain on Defined Benefit schemes - the Lawson tax changes of the mid-80s, the Lamont reduction in the dividend tax credit in 1993, the extra regulatory requirement - indexation - and the contribution holidays and early retirement packages. All were based on assumptions about future equity returns which, in retrospect, were irrational."

Very irrational indeed. Same way as 2+2 doesn't rationally make 5. But the "success" of the UK's pension sector (for the players, not the pensioners) has depended on such irrationalities for many years. Same applies to the US's finance sector: remember Alan Greenspan in 1996 talking about "irrational exuberance" (during the early stages of the dot.con bubble, when computers weren't all made in China and a decade or so before Twitbook was even a thing)?

Interesting times.

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