If all we've got left to go at is "I like this TOC!" or "But that TOC are rubbish!" or "Private greed!" or similar tired arguments from other threads then I'm not sure there's much point in carrying on with this thread. If anyone has anything actually related to the topic of Stagecoach withdrawing from franchising then please feel free to post as such. Otherwise contributions which do not directly address this are likely to be deleted.
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Stagecoach to pull out of UK Franchising
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Tetchytyke
Veteran Member
Of course employers should take on the financial risk of their employees' pensions. I don't see why this is a controversial idea. Who else should? The taxpayer? The taxpayer's already given Souter his billionaire status.
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WatcherZero
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The franchises have been taking on the liabilities for their current employee and making voluntary contributions, what they are being asked to take on though are historic liabilities from before they ran the franchises and for employees they never employed. The government is the present backer of the historic pension liabilities but they are trying to offload the responsibility in the same way they did to the BBC for free TV licences.
Sounds like the same flimsy govt strategists that thought TOCs alone would rapidly solve long festering DOO disputes & head teachers single handily fix the issues around deep rooted religious divides in certain schools
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Personally I find the whole pension thing frustrating and disingenuous from government, if there is a £xx Million hole in the pension fund then simply normalise bids by requiring each bidder to contribute £xx to the pot over the franchise term. With the existing financial mechanisms there is no benefit to the TOC if any assumption provided proves beneficial, and as always risk always ends up with Govt.
Pretending a deficit does not exist and asking the bidder with the most optimistic view of the deficit to run the franchise is delusional, as this only compounds the problem.
I cannot see why bidders (and Govt.) (and pensions regulator) cannot come to a sensible view, which ends up in accounting terms meaning Govt. makes a provision for the risk.
Pretending a deficit does not exist and asking the bidder with the most optimistic view of the deficit to run the franchise is delusional, as this only compounds the problem.
I cannot see why bidders (and Govt.) (and pensions regulator) cannot come to a sensible view, which ends up in accounting terms meaning Govt. makes a provision for the risk.
edwin_m
Veteran Member
That's not much better than asking them to cover the entire liability. Assuming the contribution is required up-front, they will cost it in by assuming they borrow the money and pay it back from what would otherwise be franchise profits, so the premium will go down or the subsidy will go up by the amount needed to cover the payments (plus a dollop more to cover risks). Even our ravingly incompetent government can borrow money more cheaply than a company, so the government could simply pay down the same amount at much less cost to itself.
In just about every private company (including the rest of Stagecoach), it is the employees who take the financial risk of their pensions now. (Except for historical benefits in now closed final salary schemes)
Tetchytyke
Veteran Member
In the railways they've not sunk that low yet.
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cjmillsnun
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They will. It is a matter of time (sadly). I expect a lot of (valid) resistance from the unions and workforce.
Not from what I've seen. If JC re-nationalises rail then it may be different.
You mean the ones that give rail links to London from towns that BR had too poor an understanding of business to spot their potential, and which have forced ticket prices down compared to the lines without competition?Nationalisation
I'll be glad to see all the garbage private companies go.
Who needs complacent overpriced nationalised industries?
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