The legacy of Margaret Thatcher lives on

[DarloRich]

Some people talk of "dividends" as if these were always a source of substantial income. Most of those people who so talk so have never been in receipt of "dividends" and usually speak from a "blinkered" left-wing perspective.

Useful money to the people holding 2.5m shares in a company. The fallacy is that your 20 shares in BT will deliver a decent dividend. Oh, that blinkered left wingism has surfaced again. Sorry.

 

[Xenophon PCDGS]

Useful money to the people holding 2.5m shares in a company. The fallacy is that your 20 shares in BT will deliver a decent dividend. Oh, that blinkered left wingism has surfaced again. Sorry.

There are those on this website who are aware of my very wide international spread of holdings but humility forbids me to say anything save that there are years when no dividends are paid by companies. I have no sympathy whatsoever with anyone who decides to invest without making themselves fully aware of the implications that may well ensue. Take professional advice before investing.

 

[DarloRich]

There are those on this website who are aware of my very wide international spread of holdings but humility forbids me to say anything save that there are years when no dividends are paid by companies. I have no sympathy whatsoever with anyone who decides to invest without making themselves fully aware of the implications that may well ensue. Take professional advice before investing.

I wonder how many people took advice before buying BT/British Gas/Railtrack/RM shares compared with how many believed the hype.

PS - I am sure the preferential shareholders are looked after most years

 

[najaB]

You can only travel direct from Edinburgh to London without changing on the ECML by travelling with Virgin
How is that a 'choice'

You can, however, travel from Edinburgh to London via the WCML without changing.

 

[Xenophon PCDGS]

I wonder how many people took advice before buying BT/British Gas/Railtrack/RM shares compared with how many believed the hype.

PS - I am sure the preferential shareholders are looked after most years

I am totally and utterly sure that you know full well of the rules appertaining to preferential shareholders far more than you wish to reveal when arguing behind a left-wing ideological image, but unfortunately for you, the words of the duet from "Chess" between Elaine Page and Barbara Dickson ring out load and clear..."I know him so well"...

In the words made famous by Michelle in 'Allo 'Allo, "Listen I shall say this only once".....Preferential Shareholders do indeed hold priority status in dividend distribution. Should a company enter into liquidation, their shareholding rights take preference over the holders of Ordinary Shares

 

[Dai Corner]

PS - I am sure the preferential shareholders are looked after most years

Of course it's the shares that are 'preferred', not the shareholders. Paul gives a much better response than I've managed though

 

[DarloRich]

Of course preferred shares often pay a fixed dividend which may be less than that paid to common stock holders. However, the common stockholder cannot receive a dividend until the preferred stockholders' dividend has been paid in full. .

 

[Moonshot]

Of course preferred shares often pay a fixed dividend which may be less than that paid to common stock holders. However, the common stockholder cannot receive a dividend until the preferred stockholders' dividend has been paid in full. .

In any event, clearly our own Rail Pensions benefit from dividends in whatever form.

 

[DarloRich]

In any event, clearly our own Rail Pensions benefit from dividends in whatever form.

Indeed - Hopefully i get to see some of the benefit in due course. Give it 30 years....................

I don't see any dividend directly as I don't own any shares, other than in Darlington Football Club, and I doubt I will ever have the spare cash to buy any.

 

[AndrewE]

...and I'm told that the Pension Fund's performance is currently excellent. That's the good news, the bad is that any surplus will be taken by the government to pay for a spell a few years ago when I believe it had to be topped up.

 

[DarloRich]

Well, here I have the choice of dozens of different providers over a cable owned by BT, Virgin Media over a different cable, and three different mobile networks, either direct or via a reseller.

I accept that that's not the case everywhere, for technical/economic/political reasons.

For the service provider you do. You don't have much choice in infrastructure provider.

I despair ever time I see that ridiculous phrase appear in print...

However, since racing terminology is being used, who is the current short-odds favourite to win this "race to the bottom"

Don't worry Paul - it wont be you. It will be someone on a zero hours contract in a warehouse somewhere.

...and I'm told that the Pension Fund's performance is currently excellent. That's the good news, the bad is that any surplus will be taken by the government to pay for a spell a few years ago when I believe it had to be topped up.

It is doing ok. The value of your investment can go down as well as up. Hang on! Is that a Brexit iceberg i see looming out of the fog?

 

[Moonshot]

Indeed - Hopefully i get to see some of the benefit in due course. Give it 30 years....................

I don't see any dividend directly as I don't own any shares, other than in Darlington Football Club, and I doubt I will ever have the spare cash to buy any.

Some years ago before i joined the Railway, I subscribed to a save as you earn scheme for my employers share capital......it worked very well and the profits paid for both a house deposit and a family trip to Florida.....not to be sniffed at. If Northern offered a scheme I would join without a doubt

 

[Moonshot]

...and I'm told that the Pension Fund's performance is currently excellent. That's the good news, the bad is that any surplus will be taken by the government to pay for a spell a few years ago when I believe it had to be topped up.

Have you got a source for that ?

 

[DarloRich]

Some years ago before i joined the Railway, I subscribed to a save as you earn scheme for my employers share capital......it worked very well and the profits paid for both a house deposit and a family trip to Florida.....not to be sniffed at. If Northern offered a scheme I would join without a doubt

Thye are obliged to offer you a pension scheme. It doesn't have to be any good! I am suspicious of many investments. My late father paid a great deal of money into an Equitable Life pension scheme that should have paid him a good level of return in his retirement. He got nothing.

 

[Moonshot]

Thye are obliged to offer you a pension scheme. It doesn't have to be any good! I am suspicious of many investments. My late father paid a great deal of money into an Equitable Life pension scheme that should have paid him a good level of return in his retirement. He got nothing.

Yes I m already in the pension scheme, I was actually referring to a SAYE scheme if one was offered.

 

[pemma]

Those already wealthy. You are very easily wound up if that phrase makes you despair.

I'm not a fan of that phase and I'm not wealthy. Terms like 'fake news' and 'race to the bottom' have been misused so much they've lost all meaning. Race to the bottom should only be used when people are being made to take a pay cut or have their hours reduced (meaning they take home less pay.) If they have a pay freeze when inflation is above 0% then it's a case of standing still when others are moving forward, rather than running in the wrong direction.

 

[Dai Corner]

Thye are obliged to offer you a pension scheme. It doesn't have to be any good! I am suspicious of many investments. My late father paid a great deal of money into an Equitable Life pension scheme that should have paid him a good level of return in his retirement. He got nothing.

You can't blame the evil capitalists for that DarloRich. Equitable Life was a mutual organisation owned by its policyholders. Basically, they made what turned out to be overgenerous promises to one group of them without making investments to match. There followed long arguments about how the available assets should be shared out. Don't think anybody ended up with nothing at all.

The Penrose report said

Principally, the Society was author of its own misfortunes

https://en.m.wikipedia.org/wiki/The_Equitable_Life_Assurance_Society

 

[DarloRich]

You can't blame the evil capitalists for that DarloRich. Equitable Life was a mutual organisation owned by its policyholders. Basically, they made what turned out to be overgenerous promises to one group of them without making investments to match. There followed long arguments about how the available assets should be shared out. Don't think anybody ended up with nothing at all.

The Penrose report said



https://en.m.wikipedia.org/wiki/The_Equitable_Life_Assurance_Society

Oh I can blame them don't you worry. It wasn't my dad deciding to manage the funds badly. If he was we never saw any of the money his vast wages in that role must have brought in. He must also have had that money well hidden because when he died this year he was living on state hand outs in a one bed maisonette. He had £7.64 in the bank. I am sure the people running the society were well cared for mind.

 

[AndrewE]

Have you got a source for that ?

There is usually a report on Pension Fund matters at the The British Transport Pensioners Federation meetings. I think one of the PF trustees is a close friend of one of the branch officers and we get detailed comments on performance and other matters. The reports must be in the public domain, or he must be entitled to pass on the info we get. Of course I might have misunderstood what was said, but I don't think so.

 

[Moonshot]

There is usually a report on Pension Fund matters at the The British Transport Pensioners Federation meetings. I think one of the PF trustees is a close friend of one of the branch officers and we get detailed comments on performance and other matters. The reports must be in the public domain, or he must be entitled to pass on the info we get.

Well I get reports on Rail pension performance every so often ....I have never seen any suggestion of the Government pumping funds into our pension and then asking for it back.....I ll be happy to be proved wrong with some hard verifiable facts online though.

 

[AndrewE]

Well I get reports on Rail pension performance every so often ....I have never seen any suggestion of the Government pumping funds into our pension and then asking for it back.....I ll be happy to be proved wrong with some hard verifiable facts online though.

I suppose it might have been "because they guarantee to make up any shortfall they will also take any surplus..." but I don't think so. I will ask next time we meet.

 

[Dai Corner]

Oh I can blame them don't you worry. It wasn't my dad deciding to manage the funds badly. If he was we never saw any of the money his vast wages in that role must have brought in. He must also have had that money well hidden because when he died this year he was living on state hand outs in a one bed maisonette. He had £7.64 in the bank. I am sure the people running the society were well cared for mind.

Sorry to hear your father died in such circumstances. Without reading the various reports I don't know whether Equitable honoured their commitments under the staff pension scheme or, if not, the Government or some other organisation did. Some compensation was paid to policyholders (as opposed to members of the staff pension scheme) by the Government though others died before they got any.

There is no capitalism involved in Equitable though as it isn't run for the benefit of external investors so I stand by my original point.

 

[DarloRich]

The people running it did so for the love of managing other peoples money did they? Has the stock market ceased to be a capitalist institution?

It was a mutual fund very badly managed by people paid a great deal of money to look after the money given to them by lots and lots of people who didn't have as much as them to play with. They abused that trust in a disgusting fashion. The risk was known to the fund from the mid 80's and they did nothing. Now, who was in power at that time and responsible for the regulatory framework surrounding the financial services market?

 

[Dai Corner]

The people running it did so for the love of managing other peoples money did they? Has the stock market ceased to be a capitalist institution?

It was a mutual fund very badly managed by people paid a great deal of money to look after the money given to them by lots and lots of people who didn't have as much as them to play with. They abused that trust in a disgusting fashion. The risk was known to the fund from the mid 80's and they did nothing. Now, who was in power at that time and responsible for the regulatory framework surrounding the financial services market?

I agree it was badly managed by people who should have known better. The mismatch of liabilities and investments should have been blindingly obvious. It could be argued if Equitable had had shareholders they would have noticed and the problem been corrected before it got out of hand.

If you want to politicise it, the products which caused the problems were sold between 1956 and 1988 under various Governments and had been smouldering away ever since. It was under the Conservatives' regulatory regime that they came to light. The matter was debated in Parliament under a Labour Government in 2004 and the Conservative / Lib Dem coalition agreed to pay compensation.

Edited to correct typo - 2004 not 1994

 

[Moonshot]

I agree it was badly managed by people who should have known better. The mismatch of liabilities and investments should have been blindingly obvious. It could be argued if Equitable had had shareholders they would have noticed and the problem been corrected before it got out of hand.

If you want to politicise it, the products which caused the problems were sold between 1956 and 1988 under various Governments and had been smouldering away ever since. It was under the Conservatives' regulatory regime that they came to light. The matter was debated in Parliament under a Labour Government in 1994 and the Conservative / Lib Dem coalition agreed to pay compensation.

Its a difficult one to swallow for sure......reagrdless of the political scene , the expectation of fruit which ultimately failed to mature is not an easy one to swallow. I would hasten to add however that the British Public nowadays is a lot more savvy in watching out for this sort of thing

 

[Dai Corner]

Its a difficult one to swallow for sure......reagrdless of the political scene , the expectation of fruit which ultimately failed to mature is not an easy one to swallow. I would hasten to add however that the British Public nowadays is a lot more savvy in watching out for this sort of thing

I'd like to think so.....

 

[furnessvale]

I suppose it might have been "because they guarantee to make up any shortfall they will also take any surplus..." but I don't think so. I will ask next time we meet.

For many years companies operating a pension fund have taken a "pensions holiday" when the fund has gone into surplus. Sometimes, but not very often, some benefit has also been given to the employees. This was because, as you say, the companies have to guarantee to make up the shortfall in lean years.

This worked very well during the years of boom when companies took many holidays. It is noticeable that in these leaner years there has been quite a rush by companies to close pension schemes as the need to fulfil guarantees has risen.

 

[Moonshot]

For many years companies operating a pension fund have taken a "pensions holiday" when the fund has gone into surplus. Sometimes, but not very often, some benefit has also been given to the employees. This was because, as you say, the companies have to guarantee to make up the shortfall in lean years.

This worked very well during the years of boom when companies took many holidays. It is noticeable that in these leaner years there has been quite a rush by companies to close pension schemes as the need to fulfil guarantees has risen.

Indeed....a move from defined benefit to defined contribution pensions has been in place for some years now.

 

[Dai Corner]

Indeed....a move from defined benefit to defined contribution pensions has been in place for some years now.

Pension scheme valuations are a complex subject.

Here's the BBCs Robert Peston writing in 2009 to explain in 'simple' terms how BTs pension fund became such a burden on the company and

Arguably, in an economic sense, BT's current and future pensioners own this totemic business.

http://www.bbc.co.uk/blogs/thereporters/robertpeston/2009/07/bt_a_blacker_pension_hole.html

 

[Moonshot]

Pension scheme valuations are a complex subject.

Here's the BBCs Robert Peston writing in 2009 to explain in 'simple' terms how BTs pension fund became such a burden on the company and

http://www.bbc.co.uk/blogs/thereporters/robertpeston/2009/07/bt_a_blacker_pension_hole.html

Oh tell me about it.....its mind boggling to say the least. I have 2 of them on the go as it happens.