Br Steel and the big Pension question

[Welshbeef]

Jockman said:

Welshbeef said:

Well not 100% right the accrual built up to date is locked and starts at he usual age but post the consultation the future years until retirement would be at the new age.

So I will get some of my state pension at 65, some at 66 and the rest at 67? Wait 'til I tell the Govt

A Ponzi scheme is a little different though isn't it.

We're talking about DB schemes with actual funds - be they in deficit or surplus but none the less there is a fund.

[Jockman]

Is the State Pension a de facto ponzi scheme? Surely the Govt has 'funds'?

[Welshbeef]

Jockman said:

Is the State Pension a de facto ponzi scheme? Surely the Govt has 'funds'?

State pension (and many public sector pensions)
1. do not have any pension fun
2. It takes payments in from working enployees to pay retired employees
3. As the demographic of baby boomers moves into retirement there will be more taking out than paying in - so the govt either has to borrow more which would be over decades until the baby boomer bulge die out OR increase taxes OR push back start date for retirement OR cut pension payment.


Our Govt has net borrowing of £1.7trillion no savings.
Previous estimates of the state pension and other public sector pensions look around the £4-5trillion mark...

[sidicks]

Jockman said:

Is the State Pension a de facto ponzi scheme? Surely the Govt has 'funds'?

Not £5trillion or whatever the latest number is...

[Jockman]

Welshbeef said:

Our Govt has net borrowing of £1.7trillion no savings.
Previous estimates of the state pension and other public sector pensions look around the £4-5trillion mark...

By all reasonable measures.......we are fooooked.

The state needs to shrink or it needs to increase its cash inflows very quickly.

[Welshbeef]

Jockman said:

Welshbeef said:

Our Govt has net borrowing of £1.7trillion no savings.
Previous estimates of the state pension and other public sector pensions look around the £4-5trillion mark...

By all reasonable measures.......we are fooooked.

The state needs to shrink or it needs to increase its cash inflows very quickly.

Well the fact is the govt don't need to pay it out instantly - the £5trillion is the value if they had to purchase an insurance policy to pay it out. So the govt is increasing retirement age thus reducing the equivalent pot requirement.
They have set up a 30 year term of payments required to get the full state pension but that could be simply the minimum level to qualify - though I guess statistics do show that poorer people live shorter lives so yes they pay in less but they draw out less too.

We might see the govt actually offering proper pensions over and above state pension provided you pay in £X amount. Similar to the option of Govts offering the public 30 year fixed rate mortgages like they do in the USA. Why not? The govt can turn into a profit centre not simply tax collection, plus it really gives a safety net over private companies going bust - maybe those companies pay into the govt directly to the individual persons pension pot.

Or we have another baby boom then they are working and paying for the old baby boom generation.


Maybe the £155per week standardised state pension is part of the govt grand plan along side one state credit ie you get a state income for life for all rich or poor from the govt like is being trailed in Finland and Neatherlands (issue picked up by economists being what happens within 20 years when robots will be doing most of our jobs we globally will be facing mass unemployment yet the Govts will still get in similar tax revenues from he companies)

[V8 Fettler]

sidicks said:

V8 Fettler said:

Do you mean changing someone's retirement age or changing someone's retirement income?

Age.

Some public sector DB schemes e.g. police and fire service remain open for existing employees who are within a certain time frame from retirement while being closed for other employees. My understanding is that this time frame can be as long as ten years.

Are there private sector DB schemes that remain open for employees within ten years of retirement but closed for all others? In my experience, when private sector DB schemes are closed they are closed to all but with accrual rights protected.

[sidicks]

V8 Fettler said:

Some public sector DB schemes e.g. police and fire service remain open for existing employees who are within a certain time frame from retirement while being closed for other employees. My understanding is that this time frame can be as long as ten years.

Are there private sector DB schemes that remain open for employees within ten years of retirement but closed for all others? In my experience, when private sector DB schemes are closed they are closed to all but with accrual rights protected.

Indeed - in the private sector, schemes are closed due to lack of affordability, so no special cases (but of course, accrued benefits are protected).

In the public sector, 'someone else' is paying, so sensible economic constraints seemingly don't apply...