Country Walking: Albury & Patmore Heath, Hertfordshire Walk

 

Off message but a post on a walk in Hertfordshire near Ware earlier this month. 45 minutes drive from East London (and possible by public transport). Check out description via OS maps app (paid) provided by Country Walking magazine.  Very quiet, some nice views and some ups and downs but not a lot of contrast but enough to do again. 

It was sad to read about the (short) lives and deaths of village soldiers in Little Hadham church. Also,  it was interesting to see the expensive memorials on the sides of the church, remembering rich parishioners who left money for the "deserving" (in their eyes) poor in their wills. The money was invested in Government gilts or annuities (loans) and the income (3 or 4% pa) used to pay for this relief. Leaving aside the morality of this, I wonder what happened to the capital they had left? This practice of leaving money for the "poor" was relatively common. Will try and find out. 

Description

The tiny area of acid grass heathland that survives at Patmore Heath is a now-rare example in south east England of this kind of terrain, with a big variety of plants packed into its nine hectares and newts in the rushy ponds. This circular walk through the nearby countryside also packs in gentle rolling paths with lovely views, picturesque churches, thatched cottages, Tudor mansions and a classic country pub. By Phoebe Taplin ROUTE Start/parking: Patmore Heath; parking on the north side, grid ref TL442258 Is it for me? Mostly good paths and lanes. Can get quite muddy; a couple of gentle climbs. Stiles: One PLANNING Nearest town: Bishop's Stortford Refreshments: The Catherine Wheel pub near start/end (www.thecatherinewheelalbury.co.uk, 01279 771191) Public toilets: None Public transport: Buses from Bishop's Stortford (not Sun). C G Myall runs a couple of buses (No.20) a week to Albury. The 386 (Richmonds) and 351 (Trustybus) run several times a day to Little Hadham (near point 4). Maps: OS Explorer 167; Landranger 194

Busting pension fund myths - Stop the scare-mongering & pay up!

This opinion piece was published today in "Inside Housing".

"There is a lot of old nonsense being put out about defined benefit pension schemes and the Social Housing Pension (SHP) fund in particular.

Let us kill some pension myths.

Yes, many pension schemes have a deficit, but these ‘deficits’ are calculated in the main by using the return of government bonds called ‘gilts’. Due to recession these gilts are at a near 200-year low. Therefore, these so-called ‘deficits’ are pretty meaningless.

You do not get rid of any deficit by closing your pension scheme or raising contributions so high that members cannot afford to remain.

In fact, you could make it worse.

A closed pension scheme will not have new money coming in and will soon find that it will not be able to invest in long-term equity investments that produce superior returns. So employers could end up paying even more to close this gap.

It is the cost of future membership that is key. Ignore the scare stories. The cost of a modern defined benefit pension is affordable and sustainable. Why is it that they are opening brand new defined benefit pensions in South Korea, which has among the highest life expectancy in the world?

Unless an employer wants its workers to retire and die in poverty then they have to pay up. There is no alternative. At my first ever Trades Union Congress  pension course we were told there is a old-fashioned but valid rule of thumb that, if you want to retire at half pay and with a lump sum, you need to save 20% of your income into a pension fund for 40 years.

Whenever I tell people this they are shocked. But this is the reality. Pensions are expensive. Employers need to be putting in at least 14% of the wage bill into pensions.

Poverty in all its ugly forms is obscene, but in front-line housing management I find poverty in older people to be perhaps the most depressing, since there is little they can do about it at that stage.

At a time that many housing associations are making massive record surpluses, giving above inflation pay rises to executives and after years of pay cuts (most staff are at least 20% worse off in real terms because they received no or below inflation pay rises) they meddle with their staff pension schemes at their peril.

Unison has arranged for early talks with the SHPS and is more than willing to meet up with any employer to discuss their concerns. But enough is enough.

John Gray is housing association branch secretary at Unison 

(I'm actually the Secretary of the Greater London Housing Association Branch of UNISON but never mind)

Bond Bubble Burst

This could be yet another disaster for ordinary savers thanks to our dysfunctional financial services industry.

This morning I read a newsletter from a respected firm of pension solicitors highlighting 10 key issues for 2013.

Number 8 was to beware of a possible "bond bubble". The concern is that bond prices (government loans called gilts or other traded loans to companies) are so over priced that soon there will be a "crash". Gilt yields (due to high prices) are currently at a 200 year low.

If this happens then the value of personal pensions for many people approaching retirement who will tend to have most of their money invested in bonds will be devastating.

It's complicated because a fall in gilt prices should mean an improvement in annuity rates (the amount of money you will actually get each year if you retire on a personal pension) and will also help out defined benefit schemes. But there is no doubt that if you are in a standard "lifestyle" personal pension plan (which most people in "normal" times should be in) then in the 5 years before your retirement most of your money will be moved away from long term savings in equities and into bonds and cash. A predicted 40% crash in bonds would be a disaster.

As always, wealthy or financially sophisticated investors will avoid the risk. Joe Public will not. This is another reason why individual defined contribution (or defined ambition) schemes are not the answer to the pension problem in this country.

With individual defined contribution schemes (personal pensions in all their shapes and sizes) ordinary individual savers have to take all the risk over their pension fund asset allocation and investment strategy. That is not their job. That is not what they are good at in life. Their funds are usually far too small to be able to afford the expert and ongoing advice needed.

While most trust based collective defined contribution schemes can afford this advice and will hopefully will put in place measures to protect members I cannot see how they will be able to fully protect those about to retire if bond prices collapse. The "market" is not the answer to everything.

The answer is of course decent modern defined benefits schemes for all.

"The Emperor has no clothes": but still killing retirement hopes and dreams

This cartoon is from Friday's "Inside Housing" Magazine about the £5 billion Pension Trust which is forcing out, for no good reason, many third sector employers from its defined benefit scheme, while pricing out others due to huge rises in contribution rates.

While I am pleased that Inside Housing has led this debate in our sector and had a news article, analysis and editorial on this subject, it has hasn't quite got it right about some pretty important issues.

1. Why is the Pension Trust writing to employers threatening to force their their workers out of a decent pension scheme on the basis of discredited "mark to market" accounting measures? Why are they increasing contribution rates on this basis to such levels as to force even more schemes to close.?

2. Why is the Pension Trust not talking to the Pension Regulator about extending its deficit repayment period to take into account the 200 year abnormal gilt yields, which are making schemes seem to be in trouble, when they are clearly not? Other social pension funds have done so successfully, why hasn't the Pension Trust?

3. The Pension Minister Steve Webb MP himself has recognised "mark to market" is a nightmare which is killing perfectly good pensions schemes and has promised to do something about it. Why force schemes to close when change is likely to happen soon?

4. Why isn't the Pension Trust thinking about asking the highly paid to pay more? They already pay less than the low paid due to high rate tax relief? Why aren't they encouraging or looking into salary sacrifice, contribution "caps and shares", changes in retirement ages, hybrid schemes or investment fund merger?

5. Was the Housing Charity "People Can" forced into administration by the Pension Trust, discredited pension accounting measures or Government cuts? What are the real reasons? Who is really to blame?

6. The Pension deficit is not "the result of poor returns on government bonds in which the scheme had invested heavily" (page 12).  The problem is not investment returns it is the way you calculate the cost of pension promises (liabilities) which are currently based on government bond yields.  This is absolutely crucial for people to understand. The deficit has increased in the last 3 years even though the scheme investments have increased in value.

7. What has changed? Have people suddenly started living longer in the last 3 years? No, the only thing that has changed is that gilt yields are at a 200 year low due to reasons completely unrelated to the real cost of a pension.

8. So "The Emperor has no clothes" the deficit is not real. So why close and force people out of decent pensions for no good reason?

9. It is a fact that closed schemes become more mature and are forced to have smaller and smaller levels of equities and more and more traditionally low return bonds and cash holding. While at the same time paying the same level of huge fees and commissions.

10. Closing schemes does not get rid of any deficits, in fact they can make things much worse.