Real world example of public sector pension changes...
Discussion
Not here again, are we?!
Only one of the public sector workers I know, got militant about it and painted her face and waved flags, like a moron.
The others I know, literally felt the pension changes on top of all the previous other changes within the last 7 years was an insult. My partner for example, doesn't have time to look into her pension...her biggest complaint is all the other cuts to other services that have a knock on effect to her work load and her own personal finances (even I had to buy 50+ CD's for her last year).
Only one of the public sector workers I know, got militant about it and painted her face and waved flags, like a moron.
The others I know, literally felt the pension changes on top of all the previous other changes within the last 7 years was an insult. My partner for example, doesn't have time to look into her pension...her biggest complaint is all the other cuts to other services that have a knock on effect to her work load and her own personal finances (even I had to buy 50+ CD's for her last year).
Camoradi said:
re: Private (defined contribution) Pensions: Having worked for a company which developed pension and annuity administration software, I have stopped paying into a private pension. The sheer complexity of the charging and fee arrangements on pension is quite staggering, and always represented the most costly elements of the development work.
Once you finally make it to retirement, the annuity company will then start by taking <> 5% of your fund, before they even think about giving you an annuity where you have to live circa 20 years just to see your fund value back.
Far better to save/invest in products which you can retain an element of control, with transparent costs
There is one reason alone to make pension contributions and that is tax relief at the higher rate. Without that, I would not pay in a pennyOnce you finally make it to retirement, the annuity company will then start by taking <> 5% of your fund, before they even think about giving you an annuity where you have to live circa 20 years just to see your fund value back.
Far better to save/invest in products which you can retain an element of control, with transparent costs
groak said:
Just cashed the compensation cheque for the con perpetrated on me (and millions of others) by ONE of my ex-'pension providing expert' conman companies.
The problem is that the amount that's paid out is so out of sync with what's paid in that it's more accurately termed 'conning' than 'investing'. (and that isn't even accounting for the pot providing the annuity being stolen-on-death)
won'tgetfooledagain icks
Would love to hear a bit more about your "investing" experience with the "pension provider". The problem is that the amount that's paid out is so out of sync with what's paid in that it's more accurately termed 'conning' than 'investing'. (and that isn't even accounting for the pot providing the annuity being stolen-on-death)
won'tgetfooledagain icks
Edited by groak on Thursday 9th February 23:57
After working in the marketing division of a major bank for a few years I gained a much better understanding of why endowment,WPB and other "structured" product payouts seemed so utterly crap in comparison to stock mkt and other asset price trends which were the underlying assets.
Basically the built- in costs and charges were massive : the upfront "embedded value " (margin) was over 8% for some products - before you even get to trail commission and deal spreads. Funny how none of the banks senior managers used to buy these products
alfaman said:
ould love to hear a bit more about your "investing" experience with the "pension provider".
After working in the marketing division of a major bank for a few years I gained a much better understanding of why endowment,WPB and other "structured" product payouts seemed so utterly crap in comparison to stock mkt and other asset price trends which were the underlying assets.
Basically the built- in costs and charges were massive : the upfront "embedded value " (margin) was over 8% for some products - before you even get to trail commission and deal spreads. Funny how none of the banks senior managers used to buy these products
Out of interest what was the "embedded value" 8% of? Annual premium?After working in the marketing division of a major bank for a few years I gained a much better understanding of why endowment,WPB and other "structured" product payouts seemed so utterly crap in comparison to stock mkt and other asset price trends which were the underlying assets.
Basically the built- in costs and charges were massive : the upfront "embedded value " (margin) was over 8% for some products - before you even get to trail commission and deal spreads. Funny how none of the banks senior managers used to buy these products
fandango_c said:
Out of interest what was the "embedded value" 8% of? Annual premium?
Total fund value (contributions) - so if someone punted 100k GBP into a product either upfront or (say) over 20 years : the upfront "value" to the provider was 8k GBP - it may have varied slightly depending on whether all paid in uproot or annually - but the overall gist is right.No f
king wonder so many endowments had a poor return as did WPBs and "granny bonds" . Sales directors had some nice cars And watches though
Edit to add - these margins were tiny in comparison to payment protection insurance - which hardly ever paid outt (margins were in region of 50%!)
Edited by alfaman on Saturday 18th February 17:01
alfaman said:
Total fund value (contributions) - so if someone punted 100k GBP into a product either upfront or (say) over 20 years : the upfront "value" to the provider was 8k GBP - it may have varied slightly depending on whether all paid in uproot or annually - but the overall gist is right.
No fking wonder so many endowments had a poor return as did WPBs and "granny bonds" .
Sales directors had some nice cars And watches though
Embedded value (or value of new business margins) are mis-leading to most people, especially over a long term.No f
king wonder so many endowments had a poor return as did WPBs and "granny bonds" . Sales directors had some nice cars And watches though
Big difference if the 100k is paid up front or over 20 years. Up front implies a charge of about .25% pa to The insurance company, over 20 years is more like 1.4% pa. If you consider NPV of premiums over 20 years, which insurers would now do, it's more like .525% pa.
There would be other charges, ie commission, going out as well reducing return.
Edited by fandango_c on Saturday 18th February 17:25
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