More years drawing a pension than contributing?
Discussion
Rovinghawk said:
Bigends said:
Just not as good as he signed up for!
In fairness, the presumption in that deal was a shorter lifespan than currently projected. It's a swings & roundabouts thing.Edited by Rovinghawk on Thursday 25th August 22:22
Rovinghawk said:
Bigends said:
free prescriptions, dental fees, free housing or rent allowance in lieu
As an aside, Derek never mentions this when he mentions the poor pay of yesteryear.As I said - all long gone now
sidicks said:
clockworks said:
I retired at 52, coming up for 7 years ago. I have paid into 2 defined benefit schemes for a total of 27 years. I always paid in the maximum amount allowed that my employer would match (no AVCs or other unmatched top-ups), 6% on one scheme, 9% on the other, IIRC.
Aren't you getting confused between DB and DC?Why would you pay extra on a DB scheme?
Why would the employer 'match' contributions in a DB scheme?
clockworks said:
We could only contribute based on basic salary, not on overtime, shift premium or on call allowances. Both were private sector IT jobs, paying pretty much the national average wage as a basic salary.
If my back of an envelope calculations are correct, I've already had back more than I contributed, in straight cash terms. In a couple of years I'll be in the black taking account of inflation, and before 65 I'll be better off than if I'd put the money into a savings account.
If you're ignoring investment income, that's hardly surprising, it is?If my back of an envelope calculations are correct, I've already had back more than I contributed, in straight cash terms. In a couple of years I'll be in the black taking account of inflation, and before 65 I'll be better off than if I'd put the money into a savings account.
clockworks said:
Maybe it's not as good as a public sector pension, but it's a lot better than the DC schemes that both employers are now offering.
Yes.I was mistaken about the employer contributions, that's the DC pension that I'm contributing to now.
I guess it's possible that I could have got a better return by investing the £150 a month (roughly what I was paying in the last year of my previous job) myself, but I feel that £600 a month for 7 years and counting, with the potential for another 30 years of payments, isn't too shabby. The monthly payment on the larger of the pensions doubles when I get to state retirement age, and both are indexed.
The Housing benefit bill is £26 billion per year. Perhaps we should stop paying landlords who fleece the country by charging ridiculous rents eh Rovingtroll. Or perhaps we could link to the thread where you had a major tantrum where the tax on buy to let was increased slightly.
You seem to enjoy telling Police Officers how well off hey are, but any changes you face and the teddies are flying. Once a hypocrite always a hypocrite.
You seem to enjoy telling Police Officers how well off hey are, but any changes you face and the teddies are flying. Once a hypocrite always a hypocrite.
Elroy Blue said:
The Housing benefit bill is £26 billion per year. Perhaps we should stop paying landlords who fleece the country by charging ridiculous rents eh Rovingtroll.
My tenants aren't on HB- check your facts before you mouth off.Elroy Blue said:
Or perhaps we could link to the thread where you had a major tantrum where the tax on buy to let was increased slightly.
Go ahead- there was no 'major tantrum'.Elroy Blue said:
You seem to enjoy telling Police Officers how well off hey are, but any changes you face and the teddies are flying. Once a hypocrite always a hypocrite.
Playing the man rather than the ball plus ad homs? This suggests you don't have much of an argument.clockworks said:
I don't think I'm getting confused between DB and DC. Both my pensions that I am taking are final salary based - DB. The increased contributions allowed me to get a higher percentage of my final salary in a shorter period of employment
Fair enough - this is fairly unusual, with most DB schemes having a fixed accrual rate, but the ability to reduce the accrual rate to keep contributions at a manageable level is something I've promoted for managing the public sector DB issue.clockworks said:
I was mistaken about the employer contributions, that's the DC pension that I'm contributing to now.
That makes sense!
clockwork said:
I guess it's possible that I could have got a better return by investing the £150 a month (roughly what I was paying in the last year of my previous job) myself, but I feel that £600 a month for 7 years and counting, with the potential for another 30 years of payments, isn't too shabby. The monthly payment on the larger of the pensions doubles when I get to state retirement age, and both are indexed.
This makes more sense to me now that you've clarified the comments above! Whilst in theory a DC scheme could provide higher benefits, it is generally highly unlikely, and this is exactly the point I've been making - DB schemes are very attractive as the employer / taxpayer picks up all of the risks and is often required to pay much more than the notional employer contribution noted in the scheme documentation..Edited by sidicks on Friday 26th August 06:31
sidicks said:
clockworks said:
I don't think I'm getting confused between DB and DC. Both my pensions that I am taking are final salary based - DB. The increased contributions allowed me to get a higher percentage of my final salary in a shorter period of employment
Fair enough - this is fairly unusual, with most DB schemes having a fixed accrual rate, but the ability to reduce the accrual rate to keep contributions at a manageable level is something I've promoted for managing the public sector DB issue.clockworks said:
I was mistaken about the employer contributions, that's the DC pension that I'm contributing to now.
That makes sense!clockwork said:
I guess it's possible that I could have got a better return by investing the £150 a month (roughly what I was paying in the last year of my previous job) myself, but I feel that £600 a month for 7 years and counting, with the potential for another 30 years of payments, isn't too shabby. The monthly payment on the larger of the pensions doubles when I get to state retirement age, and both are indexed.
This makes more sense to me now that you've clarified the comments above! Whilst in theory a DC scheme could provide higher benefits, it is generally highly unlikely, and this is exactly the point I've been making - DB schemes are very attractive as the employer / taxpayer picks up all of the risks and is often required to pay much more than the notional employer contribution noted in the scheme documentation..Edited by sidicks on Friday 26th August 06:31
Although both pensions are indexed, the first one pays a fixed, reduced, monthly sum during the early retirement period, but is back-indexed to a higher payment rate on reaching state retirement age.
Fortunately, both employers are still in business, and are able to make regular payments to top up the funds. Both have a small shortfall though.
My father took early retirement from his job in Fleet Street 29 years ago. Although his pension payment was initially very good, it isn't indexed at all, and the scheme closed to new members quite a few years ago. As the members die off, the money paid out gets lower each year. The fund now has a massive surplus.
Who gets the fund when the last pensioner or spouse dies?
clockworks said:
I guess both of the DB schemes that I contributed to were a little unusual. The second one allowed 3 levels of contribution - reduced, normal and booster accrual rate. I can't remember the contribution rate for the first one, as I left that job nearly 20 years ago.
Although both pensions are indexed, the first one pays a fixed, reduced, monthly sum during the early retirement period, but is back-indexed to a higher payment rate on reaching state retirement age.
Fortunately, both employers are still in business, and are able to make regular payments to top up the funds. Both have a small shortfall though.
My father took early retirement from his job in Fleet Street 29 years ago. Although his pension payment was initially very good, it isn't indexed at all, and the scheme closed to new members quite a few years ago. As the members die off, the money paid out gets lower each year. The fund now has a massive surplus.
Who gets the fund when the last pensioner or spouse dies?
While the fund may have a surplus on the current funding basis, it may not have a surplus (or it will be much smaller) on a buy-out basis.Although both pensions are indexed, the first one pays a fixed, reduced, monthly sum during the early retirement period, but is back-indexed to a higher payment rate on reaching state retirement age.
Fortunately, both employers are still in business, and are able to make regular payments to top up the funds. Both have a small shortfall though.
My father took early retirement from his job in Fleet Street 29 years ago. Although his pension payment was initially very good, it isn't indexed at all, and the scheme closed to new members quite a few years ago. As the members die off, the money paid out gets lower each year. The fund now has a massive surplus.
Who gets the fund when the last pensioner or spouse dies?
At some point it will be much more efficient to buy out the pensioner liabilities with an insurance company than administer them directly.
Any money left over after all of the liabilities are extinguished in this way will fall back to the sponsor.
clockworks said:
Although both pensions are indexed, the first one pays a fixed, reduced, monthly sum during the early retirement period, but is back-indexed to a higher payment rate on reaching state retirement age.
That's interesting.The last DB quotation I looked at (not mine, I'm pure DC) had an enhanced rate until state pension age then a reduction thereafter by the exact amount of the state pension. It was a 'levelling' option that basically saw the scheme payments reduce and state payments make up the shortfall.
You seem to be the opposite.
s3fella said:
The only people I know who have done or are planning "early" retirement, ie in their 50's are public sector workers, and all are couples where both work in public sector. Now that is not to say that all the public sector people I know take early retirement or are planning to.
The best off pensioners I know are not doctors, company directors and the like. They are ALL teachers who retired in the 90s and early 00s and are of a similar age to my parents. All of them seem to have been offered early retirement but - this is the kicker - they all then made a big wedge by going straight back into local schools supply teaching on an inflated rate. Why in the name of Satan's arse are these people being offered retirement if they are a. needed as supply teachers b. there's a much publicised teacher shortage.Basically they retired at 50 and are looking at in excess of 30 years drawing a pension that is simply unaffordable to most people. Crazy.
Dog Star said:
s3fella said:
The only people I know who have done or are planning "early" retirement, ie in their 50's are public sector workers, and all are couples where both work in public sector. Now that is not to say that all the public sector people I know take early retirement or are planning to.
The best off pensioners I know are not doctors, company directors and the like. They are ALL teachers who retired in the 90s and early 00s and are of a similar age to my parents. All of them seem to have been offered early retirement but - this is the kicker - they all then made a big wedge by going straight back into local schools supply teaching on an inflated rate. Why in the name of Satan's arse are these people being offered retirement if they are a. needed as supply teachers b. there's a much publicised teacher shortage.Basically they retired at 50 and are looking at in excess of 30 years drawing a pension that is simply unaffordable to most people. Crazy.
LA's did look to make early retirements but as far as I can see this was years ago and people were subject to the 85 rule (?) i.e. age plus service needed to equal 85 to get early retirement -
This is not available now nor has it been for years.
Additionally, of all the retirements from my school there has been nobody staying in teaching after retirement!
Either way -- isn't supply just like contracting - higher rate for no job security/benefits?
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