Public sector pension announcement
Discussion
sidicks said:
In what way is it theoretical ?? Might these pensions not be paid??
If you want to discount interest, the cashflow amounts to be paid must be in the region of £4 trillion - are you sure that money shouldn't be better spent in other areas - NHS, education etc??
£4 trillion? OK, I think you're being deliberately obtuse and we should just leave it there.If you want to discount interest, the cashflow amounts to be paid must be in the region of £4 trillion - are you sure that money shouldn't be better spent in other areas - NHS, education etc??
Deva Link said:
£4 trillion? OK, I think you're being deliberately obtuse and we should just leave it there.
Well if the current present value is £1.5 trillion for liabilities that stetch say up to 60 years into the future, what factor would you apply? Average duration = 30 years, discount rate = 3%, therefore factor = 1.03^30 = 2.4. So nominal cashflows = 3.6 trillion..,
Sidicks
sidicks said:
Well if the current present value is £1.5 trillion for liabilities that stetch say up to 60 years into the future, what factor would you apply?
Average duration = 30 years, discount rate = 3%, therefore factor = 1.03^30 = 2.4. So nominal cashflows = 3.6 trillion..,
Sidicks
Where are you getting these numbers from ?Average duration = 30 years, discount rate = 3%, therefore factor = 1.03^30 = 2.4. So nominal cashflows = 3.6 trillion..,
Sidicks
cuneus said:
GDP is 14-1500 billion (ONS)
Public sector pension projected at about 1% GDP (NAO)
???Public sector pension projected at about 1% GDP (NAO)
Current estimate of unfunded public sector pension liabilities = circa £1.5trillion
Assumed discount rate = 3%
Assumed average duration of liabilities = 30 years
Happy to receive any evidence to support alternative assumptions...
Sidicks
Deva Link said:
sidicks said:
In what way is it theoretical ?? Might these pensions not be paid??
If you want to discount interest, the cashflow amounts to be paid must be in the region of £4 trillion - are you sure that money shouldn't be better spent in other areas - NHS, education etc??
£4 trillion? OK, I think you're being deliberately obtuse and we should just leave it there.If you want to discount interest, the cashflow amounts to be paid must be in the region of £4 trillion - are you sure that money shouldn't be better spent in other areas - NHS, education etc??
sidicks said:
cuneus said:
GDP is 14-1500 billion (ONS)
Public sector pension projected at about 1% GDP (NAO)
???Public sector pension projected at about 1% GDP (NAO)
Current estimate of unfunded public sector pension liabilities = circa £1.5trillion
Assumed discount rate = 3%
Assumed average duration of liabilities = 30 years
Happy to receive any evidence to support alternative assumptions...
Sidicks
GDP over 30 years = 45,000 billion (assumes no growth!)
cuneus said:
sidicks said:
cuneus said:
GDP is 14-1500 billion (ONS)
Public sector pension projected at about 1% GDP (NAO)
???Public sector pension projected at about 1% GDP (NAO)
Current estimate of unfunded public sector pension liabilities = circa £1.5trillion
Assumed discount rate = 3%
Assumed average duration of liabilities = 30 years
Happy to receive any evidence to support alternative assumptions...
Sidicks
GDP over 30 years = 45,000 billion (assumes no growth!)
cuneus said:
So assuming a trillion is a million billion
GDP over 30 years = 45,000 billion (assumes no growth!)
A trillion has always been a thousand billion.GDP over 30 years = 45,000 billion (assumes no growth!)
What has changed is that we have adopted the US usage of billion to mean a thousand million, which we use to call a milliard. A British billion used to be a million million.
cuneus said:
fag packet unfunded liability = 15,000 billion over 30 years
GDP over 30 years = 45,000 billion (assumes no growth!)
Does not compute
Sorry, I don't follow.GDP over 30 years = 45,000 billion (assumes no growth!)
Does not compute
Could you explain what you mean by unfunded liability, and how you calculated 15,000 billion?
Also, what does not compute?
Ta.
fandango_c said:
Could you explain what you mean by unfunded liability
An unfunded liability is simply a promise to pay, made by someone who hopes to have the money to pay up when the time comes but might have empty pockets.A funded liability is a promise to pay, made by someone who's actually got the cash stashed away ready.
"National Insurance" and state pension is a classic. They used to tell us that NI was money used by the government to pay our state pensions in due course. Now we know our NI contributions are spent immediately paying today's pensioners and other stste benefits. There's nothing in the cupboard....
Next step is for government to make private pension provision compulsory so that everyone has something in the cupboard. But we've been there before and Greedy Gordon Brown decided to raid everyone's pension savings with his stealth taxes. Nice guy.
Ozzie Osmond said:
fandango_c said:
Could you explain what you mean by unfunded liability
An unfunded liability is simply a promise to pay, made by someone who hopes to have the money to pay up when the time comes but might have empty pockets.A funded liability is a promise to pay, made by someone who's actually got the cash stashed away ready.
"National Insurance" and state pension is a classic. They used to tell us that NI was money used by the government to pay our state pensions in due course. Now we know our NI contributions are spent immediately paying today's pensioners and other stste benefits. There's nothing in the cupboard....
Next step is for government to make private pension provision compulsory so that everyone has something in the cupboard. But we've been there before and Greedy Gordon Brown decided to raid everyone's pension savings with his stealth taxes. Nice guy.
Ozzie Osmond said:
An unfunded liability is simply a promise to pay, made by someone who hopes to have the money to pay up when the time comes....
Important for, say, an insurance company, taking on policies that have potentially large payouts.But for a taxpayer funded Government "the money" (ie the multi-trillion pound figures being talked about) never becomes payable in itself - the liability is spread over a very long period, and the annual amounts payable are small.
If a future Government ever gets near the point where it can't pay the annual public sector pension bill, then all bets are off anyway. The country would be falling apart as benefits payments weren't made and police and NHS employees stopped being paid, and schools closed down. etc.
fandango_c said:
Ozzie Osmond said:
fandango_c said:
Could you explain what you mean by unfunded liability
An unfunded liability is simply a promise to pay, made by someone who hopes to have the money to pay up when the time comes but might have empty pockets.A funded liability is a promise to pay, made by someone who's actually got the cash stashed away ready.
"National Insurance" and state pension is a classic. They used to tell us that NI was money used by the government to pay our state pensions in due course. Now we know our NI contributions are spent immediately paying today's pensioners and other stste benefits. There's nothing in the cupboard....
Next step is for government to make private pension provision compulsory so that everyone has something in the cupboard. But we've been there before and Greedy Gordon Brown decided to raid everyone's pension savings with his stealth taxes. Nice guy.
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