Unsustainable public sector pensions
Discussion
sidicks said:
crankedup said:
Don't even think about it, well known fact two sisters or two Bro's come at completely opposite ends of the spectrum, chalk and cheese was the saying! Nice idea though 
This must have been asked a thousand times, but I have yet to read it in here :
Why is the Government not reining in the public sector pension provision, at least to new employee's?
Public sector / Union outcry?This must have been asked a thousand times, but I have yet to read it in here :
Why is the Government not reining in the public sector pension provision, at least to new employee's?
increased contributions, longer returns of service in the the previous short carreer roles, higher normal pension ages, CARE rather than FS ...
loafer123 said:
crankedup said:
One of my Bro's was employed as a printer, worked for a small company of about thirty or so employee's He paid into the company pension scheme for decades, along with his co- workers. Retirement looming he was looking forward to his pension, then the company he worked for went bust. They took all of the pension fund with them and then promptly started s new company doing the same work of course. Directors of new company were wives of the previous company directors IIRC. All this was around 15 years back or so. I expect they came up with this little wheeze having seen how Maxwell was so masterful at his thievery.
Moral of this tale, trust nobody with your cash except yourself and your decisions.
Not covered by the Pension Protection Scheme? My old company went bust at about the same time and my modest accrued pension was protected.Moral of this tale, trust nobody with your cash except yourself and your decisions.
mph1977 said:
exacept of course they have, but that doesn;t stop the chicken little fratnernity bandying around their various numbers
increased contributions, longer returns of service in the the previous short carreer roles, higher normal pension ages, CARE rather than FS ...
It's almost as if you don't understand that revalued career average earnings with a higher accrual rate can actually increase rather than decrease costs for many workers. Oh wait, that's exactly the case (and this was discussed earlier in the thread).increased contributions, longer returns of service in the the previous short carreer roles, higher normal pension ages, CARE rather than FS ...
Plus of course you continue to be of the opinion that, because the pensions are paid in the future, we can somehow ignore the 35%+ subsidy as if it doesn't exist.
Very strange.
crankedup said:
The Thatcher Government were also responsible during the 1980's allowing companies to take 'pension holidays'. Really silly short term thinking back then. Compare that to the current mantra 'mend the roof while the sun shines.
At the time, interest rates were 10% plus and although inflation was higher, private sector pensions do not have inflation-linked benefits in the same way that public sector schemes do, hence the value of liabilities was much reduced.Few people could foresee the extent to which yields would subsequently fall (or increases in longevity), let alone that some future Chancellor would move the goal posts and make retrospective changes to steal future investment growth from these schemes.
Pension schemes were forced to take contribution holidays to avoid building up excess assets in a tax free environment.
sidicks said:
crankedup said:
The Thatcher Government were also responsible during the 1980's allowing companies to take 'pension holidays'. Really silly short term thinking back then. Compare that to the current mantra 'mend the roof while the sun shines.
At the time, interest rates were 10% plus and although inflation was higher, private sector pensions do not have inflation-linked benefits in the same way that public sector schemes do, hence the value of liabilities was much reduced.Few people could foresee the extent to which yields would subsequently fall (or increases in longevity), let alone that some future Chancellor would move the goal posts and make retrospective changes to steal future investment growth from these schemes.
Pension schemes were forced to take contribution holidays to avoid building up excess assets in a tax free environment.
As for the Brown pension raids, despicable.
crankedup said:
I hadn't fully realised that the pension holidays were actually forced upon the industries. As I mentioned I do recall the Government of the day making it possible for business to take a 'holiday' if their scheme was doing well. As you point out schemes were doing well. Again short term live for today thinking, all Governments we have seen in the UK do the same thing if it suits. Depressing.
As for the Brown pension raids, despicable.
To clarify, this was the case for some funds, not all, by any means.As for the Brown pension raids, despicable.
Rovinghawk said:
mph1977 said:
chicken little
Why TF do you keep using that expression?" Fear mongering — whether justified or not — can sometimes elicit a societal response called Chicken Little syndrome, described as "inferring catastrophic conclusions possibly resulting in paralysis".[21] It has also been defined as "a sense of despair or passivity which blocks the audience from actions".[22] The term began appearing in the 1950s[23] and the phenomenon has been noted in many different societal contexts."
https://en.wikipedia.org/wiki/Henny_Penny
mph1977 said:
your knowledge of literature seems to be rather lacking
" Fear mongering — whether justified or not — can sometimes elicit a societal response called Chicken Little syndrome, described as "inferring catastrophic conclusions possibly resulting in paralysis".[21] It has also been defined as "a sense of despair or passivity which blocks the audience from actions".[22] The term began appearing in the 1950s[23] and the phenomenon has been noted in many different societal contexts."
https://en.wikipedia.org/wiki/Henny_Penny
Whereas the apparent inability to understand the difference between current cashflows and future liabilities is called burying your head in the sand. Expecting those who understand the economics of pensions to suddenly agree with your bizarre assertions because you repeatedly call them chicken little is called losing the argument. " Fear mongering — whether justified or not — can sometimes elicit a societal response called Chicken Little syndrome, described as "inferring catastrophic conclusions possibly resulting in paralysis".[21] It has also been defined as "a sense of despair or passivity which blocks the audience from actions".[22] The term began appearing in the 1950s[23] and the phenomenon has been noted in many different societal contexts."
https://en.wikipedia.org/wiki/Henny_Penny
Edited by anonymous-user on Wednesday 30th March 01:50
crankedup said:
sidicks said:
crankedup said:
The Thatcher Government were also responsible during the 1980's allowing companies to take 'pension holidays'. Really silly short term thinking back then. Compare that to the current mantra 'mend the roof while the sun shines.
At the time, interest rates were 10% plus and although inflation was higher, private sector pensions do not have inflation-linked benefits in the same way that public sector schemes do, hence the value of liabilities was much reduced.Few people could foresee the extent to which yields would subsequently fall (or increases in longevity), let alone that some future Chancellor would move the goal posts and make retrospective changes to steal future investment growth from these schemes.
Pension schemes were forced to take contribution holidays to avoid building up excess assets in a tax free environment.
As for the Brown pension raids, despicable.
So we reduced this surplus by increasing benefits, but within reason, and taking pension holidays to get us off the radar. Then along came Gordon Brown, who didn't understand the word prudent if it smacked him in his hood eye. Investment downturn and soon those benefit increases were being wound out and ultimately the scheme stopped taking new members. It's still running on a defined benefit basis for existing members, but a significant number of benefits have been removed, eg early retirement without reduction of earned benefits being one.
sidicks said:
nikaiyo2 said:
Interesting indeed, and something that I've outlined on here on numerous occasions, in most cases falling on deaf ears (at least from those in receipt of these pensions)!!wc98 said:
probably a daft question, but i will ask anyway.in the article it says the nurse needs a pension pot of 2.2 million upon retirement to pay that 30k pension per year. assuming the nurse retires at 68 and lived to 98, that is only 900 k , even with inflation linked rises i cannot see how the nurse requires a pension pot worth 2.2 million ?
It's a pension of £30,700 from age 65, but I agree they appear to have miscalculated somewhere along the lines - even with a heroic RPI assumption I don't think you'd get beyond £1.5m at the most.So certainly NO'T a daft question!
sidicks said:
wc98 said:
probably a daft question, but i will ask anyway.in the article it says the nurse needs a pension pot of 2.2 million upon retirement to pay that 30k pension per year. assuming the nurse retires at 68 and lived to 98, that is only 900 k , even with inflation linked rises i cannot see how the nurse requires a pension pot worth 2.2 million ?
It's a pension of £30,700 from age 65, but I agree they appear to have miscalculated somewhere along the lines - even with a heroic RPI assumption I don't think you'd get beyond £1.5m at the most.So certainly NO'T a daft question!
sidicks said:
wc98 said:
probably a daft question, but i will ask anyway.in the article it says the nurse needs a pension pot of 2.2 million upon retirement to pay that 30k pension per year. assuming the nurse retires at 68 and lived to 98, that is only 900 k , even with inflation linked rises i cannot see how the nurse requires a pension pot worth 2.2 million ?
It's a pension of £30,700 from age 65, but I agree they appear to have miscalculated somewhere along the lines - even with a heroic RPI assumption I don't think you'd get beyond £1.5m at the most.So certainly NO'T a daft question!
Right. But index-linked pays out much less per year than a fixed annuity, so it will be a large number of years before the index-linked overtakes the fixed annuity depending on what measure you are looking at.
So the difference is not as significant as one may think or be led to believe; ie the rough figure of 500k above is not 'bad' or unviable in some way as may be perceived.
So the difference is not as significant as one may think or be led to believe; ie the rough figure of 500k above is not 'bad' or unviable in some way as may be perceived.
CoolHands said:
Right. But index-linked pays out much less per year than a fixed annuity, so it will be a large number of years before the index-linked overtakes the fixed annuity depending on what measure you are looking at.
So the difference is not as significant as one may think or be led to believe; ie the rough figure of 500k above is not 'bad' or unviable in some way as may be perceived.
I think you're missing the point!So the difference is not as significant as one may think or be led to believe; ie the rough figure of 500k above is not 'bad' or unviable in some way as may be perceived.
A public sector annuity for £30,700 increasing with inflation would cost in exceeds of £1m for a private consumer to purchase.
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