Reply to post:

Court throws out BT's plans to reduce pension rates

LucreLout

use the money you give out in dividends and bonuses to shore up the pensions gap

There's a few rather large problems with that.

1) The dividends are primarily paid to other pensioners / pension pots. No dividends means no investment, means tanking share price.

2) The share price directly influences the cost of capital for companies such as BT, thus making its loan book exponentially more expensive to finance, leading to the sort of cost cutting that really would make your eyes water.

3) Inability to meet debts as they fall due leads to bankruptcy, which leads to the end of accruals in the pension scheme and a transfer to the PPF, assuming it has resources available to suppor tthe scheme.

4) That leads directly to a minimum 10% cut in pensions paid and thereafter increases by the rate of CPI anyway.

The union will doubtless hail this as a victory today, but can be assured only of lamenting it in the future. That won't be popular in these parts, but that doesn't influence that facts.

The income BT is able to generate must be distributed in part to the owners, for they would otherwise not fund the business. Capitalism may not be popular with the left, but it is the only system ever devised by man that has proven to alleviate poverty and increase the wealth of all.

POST COMMENT House rules

Not a member of The Register? Create a new account here.

  • Enter your comment

  • Add an icon

Anonymous cowards cannot choose their icon