Final salary pension - a question.

[Welshbeef]

sidicks said:

Existing accrued benefits should be preserved - those promises have already been made.

Future accrual should change simply because the costs of future accrual is expected to be more expensive!

Promises can and may have to be broken. £1trillion and counting private sector DB deficit


Maybe the 1/60th or whatever it is now might have to be changed to 1/200th to be affordable and that way instead of DC schemes the market moves back to DB.

Who knows but I'd not be confident on past promised being met - especially if it means NHS cuts or cuts to the poorest in society just to benefit those who are wealthy (relatively)

[The Leaper]

I don't think there is any evidence that DB accrued benefits have been forcibly cut by an employer's decision. Of course, the employer can offer different terms for the accrued benefits, possibly better terms, and the employee then must decide whether or not to accept them. Unfortunately in my view employers are increasingly offering sweetners to DB members to change the basis of their accrued benefits, and this is often misunderstood by the members.

The actuary is required to certify his/her opinion that the alternative package of benefits are of reasonable value compared to the accrued package of benefits. It's the package value that will count for this, not the actual individual parts of the package.

R.