Pensions, how FUBARed is the whole system?
Discussion
I was just reading about the Monarch pilots pension scheme being transferred to the government PPF as it has s deficit of £600m. As part of the agreement to transfer the pension scheme, the new owners of Monarch agreed to pay something like £30m into the pot (i.e. 5% of what is needed) and many of the pilots will have to take up to a 50% reduction in their pension due to the cap on payouts from PPF.
I can't feel too sorry for the pilots as they are still going to get out a lot more than they put in. What's more worrying is the hundreds of millions that the government have agreed to pay into the scheme to bail out companies who are gaming the system.
As this is only one smallish company, how big is this problem? Will it sort itself out as pension age is increased and payouts get smaller? It's no wonder so many people are attracted to BTL as an alternative.
I can't feel too sorry for the pilots as they are still going to get out a lot more than they put in. What's more worrying is the hundreds of millions that the government have agreed to pay into the scheme to bail out companies who are gaming the system.
As this is only one smallish company, how big is this problem? Will it sort itself out as pension age is increased and payouts get smaller? It's no wonder so many people are attracted to BTL as an alternative.
I'm not as experienced as Ginge on these matters but from recollection the Deficits only seemed to arise after the Govt changed the calculation required for covering assets / liabilities? It is essentially a paper figure.
Happy to be shot down here but I've always found Final Salary schemes as illogical and borderline unethical, placing a high burden on future generations to fund previous ones. But then again, we have a housing shortage and massive affordability issues and yet we admire those with large BTL portfolios ?? Is >any< investing ethical these days ???
I await the Revolution with bated breath
Happy to be shot down here but I've always found Final Salary schemes as illogical and borderline unethical, placing a high burden on future generations to fund previous ones. But then again, we have a housing shortage and massive affordability issues and yet we admire those with large BTL portfolios ?? Is >any< investing ethical these days ???
I await the Revolution with bated breath
I wasn't aware that the Government funded the PPF, and their website doesn't state the Government as doing so.
http://www.pensionprotectionfund.org.uk/about-us/p...
Do you have some other evidence that they do?
http://www.pensionprotectionfund.org.uk/about-us/p...
Do you have some other evidence that they do?
PurpleMoonlight said:
I wasn't aware that the Government funded the PPF, and their website doesn't state the Government as doing so.
http://www.pensionprotectionfund.org.uk/about-us/p...
Do you have some other evidence that they do?
"an annual Pension Protection Levy paid by eligible pension schemes" = Tax = government? http://www.pensionprotectionfund.org.uk/about-us/p...
Do you have some other evidence that they do?
Jock,
There are many new clauses being changed and going through Parliament right now, all of which have implications for those in DB schemes. http://t.co/WiZWAldZvo
There are many new clauses being changed and going through Parliament right now, all of which have implications for those in DB schemes. http://t.co/WiZWAldZvo
Andrew[MG] said:
"an annual Pension Protection Levy paid by eligible pension schemes" = Tax = government?
Nope don't follow that, please explain.Unless you mean that the employers of those schemes have to put in more contributions because the PPF have demanded a levy and reduced the schemes assets to provide benefits for members and they get corporation tax relief on that additional contribution.
PurpleMoonlight said:
Nope don't follow that, please explain.
Unless you mean that the employers of those schemes have to put in more contributions because the PPF have demanded a levy and reduced the schemes assets to provide benefits for members and they get corporation tax relief on that additional contribution.
I wasn't making a statement, I was asking a question, hence the question mark. Unless you mean that the employers of those schemes have to put in more contributions because the PPF have demanded a levy and reduced the schemes assets to provide benefits for members and they get corporation tax relief on that additional contribution.
The PPF is funded by a levy on all occupational pension plans. It is not government funded so Jo Public do not pay. In effect it's the sponsors of the plans that have to pay the levy. Most employers consider this to be a modest cost so do not pass it on in any way to members. However, with the continuing funding issues relating to final salary plans, any extra burden is not welcome so you may ask how long the minority of employers sponsoring final salary plans will continue to do so. If they all come to an end, I suspect future pension levels will fall away dramatically which means that the State will be expected to finance retirement increasingly, which Jo Public does pay for.
R.
R.
Richyboy said:
Surely if your in your 20s or 30s with an ageing population + corrupt financial system + few more labour governments + decline of the west = no pension
I'm in my 40's and question if i'll see mine.If the idea is everyone pays in and as people retire more young people join and pay in, the money is invested.
If the investement's aren't paying out combined with young people not getting pensions combined with them not getting decent stable full time jobs then how exactly does the pension system work?
egor110 said:
If the idea is everyone pays in and as people retire more young people join and pay in, the money is invested.
If the investement's aren't paying out combined with young people not getting pensions combined with them not getting decent stable full time jobs then how exactly does the pension system work?
Immigration, apparently. Though who pays for the immigrants in old age is not clear... Ponzi et al...If the investement's aren't paying out combined with young people not getting pensions combined with them not getting decent stable full time jobs then how exactly does the pension system work?
The Autumn Statement might see higher tax relief drop to 30%. If it does, stand by to see VCT/SEIS/EIS etc grow in popularity. Still for the punchier client, but certainly increasingly worth looking at. Stand by too, to see increasing dislocation between the public and retirement planning if there is more legislative churn and volatility.
Simpo Two said:
egor110 said:
If the idea is everyone pays in and as people retire more young people join and pay in, the money is invested.
If the investement's aren't paying out combined with young people not getting pensions combined with them not getting decent stable full time jobs then how exactly does the pension system work?
Immigration, apparently. Though who pays for the immigrants in old age is not clear... Ponzi et al...If the investement's aren't paying out combined with young people not getting pensions combined with them not getting decent stable full time jobs then how exactly does the pension system work?
I have a very small pot in the PPF.
One of the guys I worked with at the time (who had put in quite a bit in terms of contributions over the years) was about to retire on a shed load of income having been in the scheme for something like 40 years. It certainly changed his outlook on life when it was capped.
Defined Benefit schemes are a dieing bread as we all know - unless you are in elements of public sector - and realistically, that's logically got to end soon.
One of the guys I worked with at the time (who had put in quite a bit in terms of contributions over the years) was about to retire on a shed load of income having been in the scheme for something like 40 years. It certainly changed his outlook on life when it was capped.
Defined Benefit schemes are a dieing bread as we all know - unless you are in elements of public sector - and realistically, that's logically got to end soon.
egor110 said:
Simpo Two said:
egor110 said:
If the idea is everyone pays in and as people retire more young people join and pay in, the money is invested.
If the investement's aren't paying out combined with young people not getting pensions combined with them not getting decent stable full time jobs then how exactly does the pension system work?
Immigration, apparently. Though who pays for the immigrants in old age is not clear... Ponzi et al...If the investement's aren't paying out combined with young people not getting pensions combined with them not getting decent stable full time jobs then how exactly does the pension system work?
Simpo Two said:
egor110 said:
Simpo Two said:
egor110 said:
If the idea is everyone pays in and as people retire more young people join and pay in, the money is invested.
If the investement's aren't paying out combined with young people not getting pensions combined with them not getting decent stable full time jobs then how exactly does the pension system work?
Immigration, apparently. Though who pays for the immigrants in old age is not clear... Ponzi et al...If the investement's aren't paying out combined with young people not getting pensions combined with them not getting decent stable full time jobs then how exactly does the pension system work?
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