Br Steel and the big Pension question

[Welshbeef]

sidicks said:

Haven't the differences been linked to retirement ages rather than to the benefit terms?

Given that the vast majority in the private sector haven't had DB pensions for 15+ years, I'm not sure that what happens in the public sector is really that relevant! Every other DB pension scheme that was forced to close to new accrual for economic reasons just did so - no special cases.

I'm not sure of the justification that those who are closest to retirement (who by definition will have benefitted most from DB schemes) should have special treatment?


If something isn't affordable (unless you have taxpayers to subsidise it) then it's not affordable...

Edited by sidicks on Wednesday 1st June 08:29

Awaiting the usual response that it's going to be a race to the bottom.... Well it's a race to affordability. Why should those in need of NHS treatment have to wait longer due to beyond belief Public sector DB schemes?

[Welshbeef]

shirt said:

the BS pension fund has been mismanaged since the year dot. pretty sure tata had to pay a hefty sum to shore it up as part of their takeover deal of corus.

i am doing my bit for you uk taxpayers by offshoring my own BS pension as soon as humanly possible.

People used to live on average 5 years into retirement 70yo now average chap is 12years longer and that's been the case since the 1980's more or less yet no individual had to pay in more and nor did the company for all that time....

Retirement age has not been pushed back to compensate longer life or accept lower pension over the longer life.

Enforced pension holidays by the govt

Removal of dividend tax credits Gordon brown in 1997/8/9 costing £400billoon and counting to be pension industry yet no employee was asked to pay in more to cover his gap or to accept a lesser pension ditto the company.


Essentially zero growth in 16 years in equity and 8 years and counting for govt bonds so needed growth isn't happening why are employees and employer asked to pay more in or accept less out?


Tough questions and when it's only detrimental it's lalala I cannot hear you.

[Welshbeef]

sidicks said:

I'm not sure they are going to be offering very attractive transfer values given a) the large deficit and b) the priority to protect remaining members.

Actually on this even if the offer is poor it might actually work out more beneficial than what could happen?

Personally I've one scheme DB where it is a zombie company and has been for the last decade so even though the DB pension exists it could be reduced significantly. I'll hold it and what will be will be.

[Welshbeef]

sidicks said:

V8 Fettler said:

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

Age.

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.



I did some calls last night.
When I earned 1/3rd of the salary I do now I was in a DB pension 3% in 1/60th today it's DC. Anyway I locked in 6 years in that DB but to buy that (RPI guaranteed 5 years and 50% to spouse on death) it was £46,277 per £1k pension, so I'd need nearly 15 years at my salary now to get to the pension I achieved in 3 years with 1/3rd of he salary I have now.
Note I pay in a combined 15% into DC.
Really makes you think doesn't it.

[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.

[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...

[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)