Family Money: Pensions in crisis
Managing director of Westminster Portfolio Services (Thailand) Ltd.
Those of us who have chosen to settle in Thailand are
fortunate in many ways. The climate is balmy, the cost of living is
relatively low, and we don’t have to pay tax on inbound remittances.
If you’re working as an expat, you’re probably
earning quite a bit more than you spend, and paying rather less local tax
than you’d have to pay ‘back home’. You may even be paid part of
your salary package in offshore hard currency - which you are wisely
salting away to fund your eventual retirement.
If you’ve retired ‘early’, you’re probably
drawing down an income from investments – which may have produced rather
less income in the past three years than the previous three! Or you may
have been eating into capital, which now that you’re not working any
more, cannot be replaced.
Or you may be drawing down a state pension, and you may
have a personal or corporate pension too. In any case, you probably
don’t give much thought to the next generation’s pensions – let
alone how they’re going to be paid for. You probably haven’t given
much thought to whether your own pension is sufficiently funded to last
you the rest of your life.
Private loss, public cost
Most countries in the EU run “pay as you go” (PAYG)
systems, where pensions are paid to retirees directly from current
workers’ contributions. But the population in developed countries is
ageing fast, while birthrates are still falling – in some cases to below
Forty years ago there were three workers for every
retiree across Europe, making state pension liabilities easily manageable.
That ratio has steadily fallen to two-to-one today, and by 2040 may have
dropped to nearly one-to-one.
Up until now, the solution was gradually to reduce
people’s dependence on state pensions while nudging them towards private
or corporate pension schemes. The expectation was that these schemes, run
by clever investment managers, would take advantage of ever-rising stock
markets and deliver far better pensions than the state ever could. But
company after company is finding its pension schemes in trouble.
Already the trend has moved from “defined benefit”
corporate schemes, where pensions are based on a proportion of final
salary, to “defined contribution” (DC) schemes, where your pension
depends on how much you have paid into your personal fund. In 1991
expatriates’ final salary schemes constituted 79% of employer pensions;
in 2001 this had dropped to 42%.
But over the past decade projections for these more
modest – and safer for companies – DC schemes fell by half, and the
market falls of the last three years have had a disastrous effect, with
many DC schemes now facing significant shortfalls. Ten years ago, a 30
year-old paying 10% of his salary into such a scheme could expect to
retire on 55% of his final salary. Today, for a similar 30 year-old in a
DC scheme, that figure is just 24%.
So well before the middle of this century, we won’t
be able to afford our pensions. Of course, those who have already taken
retirement here probably care very little about what will happen to state
pensions or even corporate or private pensions 25 or 30 years hence.
It’s their children and grandchildren who will pay the bill and not reap
Bad luck for Baby Boomers
The pensions problem is not unexpected. The population
in the developed world has been gradually ageing as the Baby Boomers have
grown up and had fewer children, later. Many Baby Boomers will be
expecting to retire in the next 10-15 years, and collect their state,
corporate and personal pensions, and enjoy the next 20-25 years of
By that time, however, the state will have run out of
money, corporate pensions will have underperformed expectations made back
in the heady days of the equity boom, and personal pensions – which may
have been invested even more aggressively than corporate pensions – may
have fared even worse.
By the time Baby Boomers’ children come to retire the
state pot will be empty, and personal pensions under-funded. How will
governments handle that problem?
Many governments are now talking about raising the age
of retirement. The UK government, for example, recently announced that
many workers would have to keep going until they are 70 to get a liveable
pension out of their state entitlement and their own savings. The
ridiculous excuse used by the politicians is that people nowadays want to
carry on working longer… Ask any expat retiree on Jomtien beach if he
European governments have already begun to put reforms
in place, albeit stutteringly. Germany, France and Italy – all with
generous PAYG pensions systems – started throughout the 1990s to turn
their systems around. Final benefits have been cut, contributions have
been raised. Italy is struggling to get workers to agree to longer working
lives and lower pensions.
Crucially, there has been a realisation that fully
funded private or quasiprivate systems must come in alongside the PAYG
systems. Foremost in EU politicians’ minds are the examples of Chile,
which adopted funded pensions in the early 1980s, and the US, which set up
its famous 401K legislation in 1980, allowing workers to build a
tax-friendly pot of retirement money. Both these countries’ pensions
programs are now relatively solvent.
Another alternative is to increase immigration flows of
young workers to offset ageing EU populations. This has worked for the US,
where both immigration and birth rates are high. But in the EU, some 56
million young immigrants would be needed to offset a similar fall in the
present 15 states’ working-age population between 2010 and 2050. That is
three times the current level of immigration – and would be a
politically very risky option in an environment which is becoming
increasingly right wing.
Lower expectations, longer working lives, and allowing
more immigrant labour may be necessary if a pan-Europe pensions crisis is
to be avoided. Selling these ideas to the voting public will be difficult.
The main solution has to be higher personal and public savings.
It could be argued that the collapse of the equity
markets has sobered people’s expectations. While stock markets looked as
though they would continue rising forever, there was little incentive to
raise savings rates. Now the idea of putting aside only 10% of your income
with the expectation of retiring at 55 on half final salary is dead in the
water. Coming generations will have to pay more, work longer, or get less
– or all of the above. Across the developed world, reality has begun to
Snap Shot: When all else fails - read the instruction manual!
by Harry Flashman
I was rung from overseas the other day by a semi-pro
photographer who was having a camera problem. It was related to the
viewfinder instruction (FEE), in the manufacturer’s code, and the
photographer did not know what was meant. Fortunately I have the same
brand of camera (Nikon) and I was able to point the photographer in the
right direction, but all this expensive overseas telecommunications was
really unnecessary. The instruction manual explained it all, but it had
remained firmly closed!
When was the last time you scanned the golden truths in
the pages of your camera’s instruction manual? For that matter, do you
know where it is? Now I have to admit that I am just as guilty as the next
photographer on this one. This was brought home to me the other day when I
came across the instruction manual for my cherished old Nikon FA. Now you
have to remember that I have been using this camera for the past sixteen
years, so I am fairly au fait with the use of this camera, yet it was
amazing just what I had forgotten about the capabilities of this camera.
For example, the double exposure facility on the top of
an FA, next to the rewind lever. I had been thinking about doing some
double exposure shots and will give you some ideas on those later. The
self-timer, stop-down depth of field preview and the ability to change the
exposure metering had all slipped my memory, as had the knowledge that
when you run the camera in “manual” mode, the metering pattern is
different from the other modes.
In fact, it was an enjoyable half hour to read through
the book again. It even stimulated me to get the camera out of the bag and
just fiddle with the forgotten controls while reading.
No, the instruction book that comes with your camera is
really a very important operating document. The manufacturers have spent
much time, effort and money to make it as accurate as they can, and we,
the ace photographers that we are, chuck it in a drawer and forget about
I suggest that you do as I did and dig out the manual
and re-read it (for some people this will be the first time, I am sure)
and explore the different capabilities in your expensive investment. It is
worthwhile. You will be able to do much more with it.
Let’s now look at Double Exposures. Almost every
camera these days has a multiple exposure facility, even the mid-range
point and shoot compacts. This gives the photographer lots of artistic
licence to compose and create all kinds of different images - but there
are a few wriggles to remember to do this successfully.
Since you are superimposing separate images on to the
one frame of film, it becomes very easy to over-expose the background. By
the time you have taken three exposures, for example, you have now
overexposed the background by a factor of three and you will have an
First rule - select as dark a background as possible.
Black is the ultimate, as you can keep on shooting as many exposures as
you like. Consider shooting the double exposures at night, using flash and
with the subject positioned a long way in front of any background, so that
it is not lit by the flash burst.
The second important point to remember is that if your
subjects overlap in the photograph, you will get a ghostly image. To get
over this, divide the viewfinder into the number of exposures you are
going to put on the one frame. Into halves if it is a double exposure or
into thirds for a triple exposure. Then by positioning the subject
carefully within the marked off sections you can stop too much overlap.
Use marker that will wash off, or you will have permanently affected the
Read your instruction manual today and try some double exposures this
Modern Medicine: You are going to die!
by Dr Iain Corness, Consultant
Great way to start this week’s column? No? They say
there are only two things that you cannot avoid in life, and that’s
death and taxes. While there are many trying to avoid the latter
(especially in Thailand), there are none of us who are going to avoid the
former. We are all going to go one day. Even me! It’s just a case of
when and where, I’m afraid.
I was reminded of this the other day when reading a
medical discourse in the journals on whether patients should be told of
impending death. For my money it is a total no-brainer. Of course patients
should be told. Why should the doctor not divulge such information? Surely
the person would want to know just how much time they have got? Even if
just to clear out the bank accounts first! If you know “when” then it
gives you the opportunity to inform loved ones, get the house in order and
do the last crazy things that you’ve always wanted to do.
When this subject comes up at dinner parties (bring a
doctor to the dinner table if you want a really morbid evening) the main
reason that those who say they don’t want to know is fear. Not so much
fear of dying, but fear of loneliness and the unknown. And fear of pain.
And let me point out that this is natural, very natural.
Let’s deal with pain first. With modern pharmacology,
pain relief should be a thing of the past. There was a period when we
withheld the big painkillers for fear of making the patients into
“addicts”. What a load of old cobblers! Worrying about addiction in
someone who is terminal? Totally misguided logic in my book, and
fortunately modern medicine has also decided that pain relief should be
given in as large doses as is necessary. We do not have to suffer pain
before we shuffle off!
Knowing that one’s time is approaching means that the
family members can band together, visits are made, arrangements for people
to just be around the place are put into the family timetable. Fear of
loneliness can be overcome by prior discussion.
Fear of the unknown is a little harder to combat, I
must admit, as apart from some antediluvian records, there are no real
histories of people who have made it all the way to the pearly gates but
had a change of heart and returned. If there were, my Dad would have come
back and made a fortune writing a book on the experiences. Please note
there is a difference between this and the religious concept of
reincarnation. However, those people who have had near death experiences
generally say that the only feeling was one of floating above their body
and watching the people resuscitate them below. It was not described as
being an unpleasant feeling and the return was usually done with
difficulty, so it apparently seems an easy way to the hereafter.
So there is not too much to fear, from the sketchy
reports, but remember that life is for the living and we should all keep a
cheerful eye on the future, and enjoy as much of it as we can. It really
just means we should try and remain as fit as possible to get the most
pleasure from whatever is left (or is coming) to us.
Heart to Heart with Hillary
My problem is with bad breath. Not mine, but my
girlfriend’s. In the mornings it would peel the paint from the walls,
but she does not seem to know this as she happily kisses me and expects
one back in return. I have tried holding my breath, but that doesn’t
work as I have to come up for air after thirty seconds. Have you any ideas
that might help?
Is that short for “Halitosis” I would imagine,
but do not despair, help is at hand, without having to go and hire a SCUBA
set for the early morning wake-up call. However, the first thing you have
to ascertain is that it is really your girlfriend that has the problem and
that you are not experiencing ‘blow back’ in the early morning. Try
first by jumping out of bed and throwing the toothbrush over the gums
before the morning snog. If there still is a problem, make flossing and
teeth cleaning the family fashion before retiring at night. If that does
not fix the problem you are left with two alternatives only, look for a
dentist or start looking for another girlfriend.
I have always tried to keep my cars looking nice, I
always wash them and take pride in their upkeep and appearance. Recently I
have noticed that I am getting scratches along the side of my car and
sometimes when I come out I have got a flat tyre, yet when I take it to
the garage there is nothing wrong with it. I think that the local
motorcycle taxi boys are doing this, but I can’t prove it. What do you
suggest? Before they destroy my car altogether.
Dear Angry Andy,
First, don’t get angry. It does not do you any
good, and especially in this country. If you get angry with people they
think less of you, not more. I presume that you must have offended
somebody if you believe they are deliberately damaging your car. If you
think the taxi bike boys are responsible then you have quite a few
options. You can employ a security guard to look after the pride and joy,
you can go and park somewhere else, or even more craftily, offer the
motorcycle taxi gang some money to look after the car instead. Personally
I would go for the cheap option of parking elsewhere, but I do not know
your circumstances. Hope this helps. Finally, don’t get angry, my Petal.
It never works in your favour.
With St. Valentine’s Day nearly here, what do you
suggest I get my lady friends (I have two). Last year I gave them your
favourite food of chocolates and we all shared a bottle of champagne
sitting on the balcony, but I’d like to do something different this
year. Have you any suggestions, Hillary? I have taken them to shows and
stuff like that before too.
Dear Two Dogs,
Well, aren’t you a lucky chap! Or perhaps you are,
as the old saying goes, as silly as a man with two “dogs”! Keeping two
ladies happy at one time is no small feat. Or is that no small feet? Those
are big shoes of yours. However, really, Two Dogs, how would Hillary know
what your ladies would like? They might be into knitting for all I know.
Surely you are not so wrapped up in yourself that you don’t know what
your two ladies preferences are? My only suggestion is to keep everything
light hearted, as St. V’s day is supposed to be. You aren’t going to
be proposing marriage now, are you? Or are you, Petal? Two Dogs, with two
ladies, you might be capable of anything. Or on the other hand you may be
bragging a little.
Dear Hilary (sic),
A few weeks ago there were some letters trying to get
information about who you really are, as I don’t believe you are really
called Hilary (sic). I have heard that you are a divorced lady in your
50’s. Can you tell me if this is correct? If I am right I will share a
bottle of champers with you, as I am also in my 50’s and my wife walked
out on me recently. This could be the start of a new life for both of us!
You are being just so provocative, Petal. You are
hoping that the call of the champers bottle will be so strong that I will
say you are correct anyway, and risk the rejection when we meet up for the
sharing of the promised bottle of bubbly. Unfortunately, just hoping is
not enough. You should be doing far more detective work than that. Just
listening to idle gossip, or in the case when you’re talking about me,
it’s “idol” gossip, is not the standard I expect, my friend. You
should not be listening to rumours at your age. No wonder your wife went
for a long walk and never came back. Or was that just a rumour too?
However, you are correct when you say my real name isn’t “Hilary” -
it’s “Hillary”, Petal, with two “l’s”. OK!
A Slice of Thai History: Raising the standard; Thailand’s national flags
by Duncan Stearn
In large measure a nation is defined by, and takes its
place in the international community behind its flag. The current ensign
of the Thai nation is known as the ‘Trairanga’ or ‘Trairong’,
meaning tricolour and consists of five horizontal stripes of, from top to
bottom, red, white, blue, white, and red.
This symbol of the nation has been the official
national flag since 28 September 1917 when it was unfurled by King Rama
VI. The prevailing - although unofficial - view of the meaning of the five
stripes is that the red represents the land and the people; the white is
for Theravada Buddhism, the state religion and the central blue stripe
symbolises the monarchy. It has also been stated that blue was the
official colour of King Rama VI. Another account claims the blue was
inserted as a show of solidarity following Thailand’s entry into the
First World War (in July 1917) as an ally of Britain and France.
Vexillologists are not in complete agreement with
regard to the various flags of Thailand and their dates of introduction,
although most sources seem to agree that the first national ensign was a
plain red colour with no other markings or features.
Just when the first Thai flag flew from a flagpole has
never been established. The first account to mention any sort of national
flag symbol occurred during the reign of the Ayutthayan monarch King Narai
According to some sources, a plain red banner was
displayed by Ayutthayan merchant ships trading with foreign countries. It
is generally believed that the first official Thai national flag was
unfurled in 1680 when a French warship arrived at the mouth of the Chao
Phraya River on a goodwill visit. The local governor was asked by the
French commander if it would be allowed to fire a salute as it entered the
mouth of the river. Permission was given and the Thais manning the fort at
the entrance returned the salute. As it was customary to raise the
national flag before a gun salute was fired, the governor found a suitable
piece of red cloth, attached it to a rope and raised it to accept the
Research by Prince Damrong, a brother of King Rama V
and an acknowledged great administrator and scholar, showed that the use
of the red ensign could be traced to the reign of King Borommakot
(1733-1758) and a mission by 18 Buddhist monks who travelled to Sri Lanka
in 1752 in an attempt to restore Singhalese Buddhism. A journal, written
at the time, mentions that only red flags were used on the Thai sailing
Some time between 1752 and the turn of the century, the
Thai flag may have had a white chakra (a Buddhist wheel shaped like a fan)
added to the plain red. Then, in 1817, during the reign of King Rama II, a
white elephant was added to the centre of the chakra. This was apparently
done for two reasons. First, the King had recently taken delivery of a
very rare white elephant, the third of his reign and second, the port
authority in Singapore claimed they couldn’t differentiate between
private and official Thai merchant vessels and asked if it was possible
for the Thai government to issue an official flag.
An American publication entitled The Flags of the
Principal Nations of the World and published in 1837 shows the flag of
Thailand as red with a white disk in the centre. On the white disk is a
drawing of a sun with a face on it. However, this same drawing appears in
drawings of the flags of both Uruguay and Peru. In the same book, the flag
of Burma is rendered as a red field with a white elephant facing the
flagpole. This would seem to be more representative of Thailand than of
In 1855 (during the reign of King Rama IV; Mongkut) the
white chakra was dropped and thus the vexillum was a red field with a
white elephant in the centre. This remained the national symbol for the
next 61 years.
In 1916 King Rama VI (Vajiravudh) introduced a new
ensign. It consisted of five horizontal stripes of red, white, red, white,
and red. The story goes that the king, on one of his boat trips up the
Chao Phraya River, had noticed that the then national flag was being flown
upside down over a hut. Back in his Bangkok palace the monarch decided to
design a simpler and more modern-looking national ensign. Considering that
the flags of most European powers were based on stripes that represented
their national colours, King Rama VI came up with a new emblem which was
to be the forerunner to the current flag. The change in colour to the new
flag to the one in use today was made a year or so later.
Personal Directions: Put a bit of life into it!
by Christina Dodd,
founder and managing director of Asia Training Associates
It’s always rewarding to finally see participants in
a training seminar rush to fill the front seats! And when it happens,
it’s like the penny has finally dropped, and someone is actually getting
some benefit from all the effort that goes into training. It makes it all
Recently I ran a customer service program for staff
dealing in everything from pantyhose to fresh vegetables to champagne and
wine. At the beginning of the program they were all a little apprehensive
as to what would ensue, probably because this was the first ever training
program they had attended, apart from the very basic product knowledge
As the program progressed, it became evident that they
were not only gaining some valuable information, but actually enjoying the
style of the program and the techniques used to impart the information.
They began to fill the front seats more eagerly than before; they stopped
talking amongst themselves and started paying attention with a very
sharpened focus; they were wanting to participate in the role plays and
the group activities.
This aspect of training is one that I place great
importance upon because once people start to enjoy what they are doing and
to enjoy the way knowledge is being passed to them, it is much more likely
that they will absorb it and take hold of it with enthusiasm and zeal.
That’s what it’s all about!
My colleague and chairman of Asia Training Associates,
Dr. Chira Hongladarom, is a great proponent of this approach to learning.
Only the other day we were both attending a forum on reform in the civil
service and one point Dr. Chira made most emphatically was that, “It was
time that we, as educators, stopped lecturing and handing out copious
amounts of notes that no-one reads and started creating more interest in
the classrooms through dynamic interaction and practical activity.”
The training rooms and classrooms of companies and
educational institutions need to be filled with interested and eager
individuals thirsting for and taking in new knowledge and information. If
this is done only through theory and lecturing, then no interpersonal
exchanges will take place and little individual development will result.
Of course a certain amount of theory is necessary, but it shouldn’t
overshadow and dominate the methods of imparting knowledge and maximizing
knowledge retention. It shouldn’t be given at the expense of audience
It’s refreshing to have people fill the front seats
and it is equally refreshing to see them open up and start to participate.
Some are quite shocked that they actually do get involved because normally
in Thailand it is the case of sitting back and waiting for others to speak
first. As individuals participate they gain more confidence and with
confidence comes a heightened awareness. One is able to draw upon hidden
strengths and abilities and as a result become more willing and more
motivated to grasp what is being imparted and to retain it.
The whole experience is interesting and enjoyable.
Learning should be informative and it should be fun. It should be
something that everyone likes to do. For a trainer nothing is worse than
being in a room filled with people who have no enthusiasm about what you
are doing or trying to say. You may as well pack up and go home because
you have lost them - you probably never had them in the first place.
I always get a real boost from training. I make sure
that everyone involved is happy to be there. If not, then they can make up
their minds as to whether they stay or not. Nine times out of ten all my
participants have a great time and go away with new thoughts and tangible
ideas. In some programs people literally run back into the room after the
break, as opposed to sauntering down the aisle. They don’t want to be
late and miss out on anything! They enjoy the training and so do I.
The training room should be a place people want to be.
Not a place that they have to be.
And that goes for the office or workplace as well. It
also goes for boardrooms and meeting rooms. Usually when people go to
meetings you see them drag their feet and carry their files as if they
weigh a ton. The atmosphere is lethargic instead of being charged with
energy. Any type of gathering is an opportunity and should be recognized
as such. Staff tend to shy away from meetings because they usually see
them as ineffective, drawn-out and sometimes boring. A lot of staff are
reluctant to get involved in discussions and tend to withdraw. Okay, there
are times when issues need to be addressed and matters given due and
serious thought, but these things can be done in a manner that doesn’t
have people grabbing for the slightest chance to leave the room. Managers
need to review their styles in terms of conducting meetings and getting
their people together.
In fact it is not such a bad idea for managers at any
level to review their behaviour and management styles and to take stock of
their interpersonal skills on a regular basis. The response of staff to
management has a lot to do with the way management appears and behaves.
It’s very true. I don’t mean that you should be running through the
office singing, bounding and overflowing with gushes of exuberance. I do
mean though, that most managers should get out there and be a touch more
excited about where they are and what they do. Let the staff see it
because it can have tremendous results!
As I said in one of my very first articles - enthusiasm
doesn’t cost a penny, it’s absolutely free! It doesn’t hurt and you
don’t need a college degree to acquire it. There is virtually no
restriction to sharing it with anyone, anywhere ... anytime.
If you are interested in finding out more about how our
training programs can assist you or your staff, please contact me at Asia
Training Associates (see advertisement) or at cmedodd@ chmai.loxinfo.co.th
Until next time, have a great week!
Women’s World: Stress Part 2
by Lesley Warmer
Health: One of the biggest problems I find is keeping
fit. I know I’m unfit; I spend too much time in front of a computer.
It’s all well and good to give advice on how to keep fit but finding the
time is not so easy.
can only guess which form of stress induced this face of despair.
This is the good advice I should give you:
“Make yourself start in very small steps: Purchase
exercise clothes one day; get dressed in them another day; walk for five
minutes the third day, and so on. You can use hand and ankle weights in
the privacy of your own home, while listening to music or reading a book.
Start with very light weights and add pounds as you increase your
strength.” Sounds easy doesn’t it?
But in real life, I’m generally on the computer by 7
a.m. so I don’t think I can find the energy to exercise before and I’m
too tired when I get back from work. Another problem here is the climate:
it’s so hot the only time you can really exercise is at the crack of
dawn or in the dark. I’m terribly impressed with those ladies that do
exercise, to find the motivation is the most difficult. “No pain no
gain” just doesn’t seem to work for me.
I have to admit to having purchased a walking machine
and I’m too lazy to get on that. Maybe if I was a lady of leisure (I
should be so lucky) I could find the inspiration to go to the gym every
day and workout. Try to find yourself a buddy, with the same ideas on
exercise! Meet at a given time every day and start with a casual walk, you
will be surprised how much ground you cover while you’re chatting.
Family: We love our family and feel responsible to a
certain extent for their happiness. For those of you that read my column
regularly you will remember Emma. She is doing well although undergoing
some traumatic operations that will go on for the next 3 years. It’s
quite normal that I am terribly stressed about my daughter so naturally
susceptible to the other stresses and strains of life. One thing I have
learnt over the last few years is that I cannot live life for my children.
I can’t stop them making my mistakes, I can only warn them when I see
them heading in the same direction. We learn by our own mistakes (or we
should) - its called living life - but unfortunately that does not stop us
taking on our children’s stress - its called being a mother.
Work: Today’s fast pace is exhausting and stressful.
Women fulfill multiple roles, frequently responding to the needs of
others, often at the expense of meeting their own needs. Many women find
themselves depleted with nothing left to give at the end of the day. To
manage a family and maintain a job can be exhausting, children end up
suffering with a mum that is too tired and stressed to give them the
attention they deserve.
On the opposite side of the coin is when you have no work and not
enough money to pay the bills and support the children. You end up with
the same result: a tired, impatient mum with no inclination to give the
children the time they deserve. The poor kids stand no chance! All I can
suggest is to try and plan your day and save at least one hour for the
children. During this short time give them your undivided attention and
forget everything else, you might find it quite enjoyable. Remember, they
will not be children forever, one day without you noticing they will be
all grown up and leaving home.