Bee-Mail - 3 June 2010

Accidental Accrual 

Years ago, when I was young (the laughter in the background is Ms Bruun, by the way) I was paid two types of money every month by my employer.   One type of money was something called 'ready cash' (or salary) which I could, and did, blow; the other kind was called a 'pension contribution' which I couldn't get hold of until I got old (cue more laughter from la Bruun).

My job back in those days was explaining to pension scheme trustees how important it was to pay people with two types of money. If I'm being honest, though, if I could have got hold of my own pension money to get myself out of the financial hole I'd dug myself into I would have done. But I couldn't so I struggled on and eventually became my older and wiser self (shrieks of mirth from my able assistant on that one too - I'm going to have to stop dictating these things!)

The point I'm trying to make, I guess, is that it was sort of normal for people in jobs like mine to get paid in two types of money; one accessible, one not. The new pension laws, put simply, are going to make that the norm for all employees in our country in the future. All employees will be paid in real money and pension money soon. They're allowed to say "No!" to the pension money (by opting out), but their employer won't be allowed to give it to them as ready money instead.   That would be an inducement not to be in a pension scheme and employers won't be able to do that. In a nutshell that's kind of what the new pensions laws are all about.

So in the future there'll be loads more younger people just like the young me who will be putting money aside that they can't touch until they reach an age when they become a figure of fun to their younger colleagues. This interests me. So much so that I drew this week's cartoon on just that subject.   The cartoon, if you're interested, is entitled Accidental Accrual and I drew it somewhere down on the west coast of the island of Ireland. You can click the link back there if you want to read it...