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Pension Timebomb

Community Veteran
Posts: 18,936
Thanks: 318
Registered: ‎12-08-2007

Re: Pension Timebomb

Our pensions were the envy of the world until Brown became Chancellor and took £50Billion out of the pot and has done so for the past 12 years Angry
Community Veteran
Posts: 1,100
Registered: ‎05-04-2007

Re: Pension Timebomb

Further to my previous post I feel that any contributions made by the employer & employee should be guaranteed minimum return at the time of pension. In my own case I can change funds, but I am not an expert on which funds would be best. That is what the fund managers are meant to be, so why is it I can swap around the funds at my own risk? The only difference as I see it between an ordinary share investment and a pension is that the employer contributes and their is a tax incentive. The current company pension system was not helped by companies taking a pension holiday when the share price was good.
alanf
Aspiring Pro
Posts: 1,931
Thanks: 78
Fixes: 1
Registered: ‎17-10-2007

Re: Pension Timebomb

Quote from: artmo
Public sector pensions have a deficient of £1.12 trillion in payments.  Most of this is unfunded which means we, the taxpayer, will have to foot the bill

As the report says these are public sector pension liabilities. There is no deficient (or even deficit!) because unlike private sector pensions there is no pot of money to be deficient. The pension contributions made by the civil servants over their working lives were immediately spent by governments of the day. So  part of the bill that we the tax payer will have to pay is in fact giving back to the pensioners their own money plus interest due.
pierre_pierre
Grafter
Posts: 19,757
Registered: ‎30-07-2007

Re: Pension Timebomb

my pension fund managers have just published last years figure, they say never mind the figure, you are still safe?
income 73.4 M, expenditue 140.9 M. (Pensions 128.3 M) assets 2,785.4 M
membership profile  2008  2007
employees                4593    4814
Pensioners              11535  11547
Preserved Pension  7040      6950
Preverved, those that have left but not drawing pension
Community Veteran
Posts: 18,936
Thanks: 318
Registered: ‎12-08-2007

Re: Pension Timebomb

You need to keep an eye on the investment strategy also especially as there is a 2:1 ratio on expenditure to income. 
pierre_pierre
Grafter
Posts: 19,757
Registered: ‎30-07-2007

Re: Pension Timebomb

I have a four page report, the summary said, dont worry it should be ok.
The Fund managers are MNPA Ltd, Google looks OK
Quote
Does this mean my Pension will be cut?  No pensions are long term liabilities and are not afffected by short term undre funding
Further more the Trustees have agreed a plan to bring the fund back into  balence by 2017

PS my Mum 94 still gets a wopping pension on my deceased dads peension from the same source
itsme
Grafter
Posts: 5,924
Thanks: 1
Registered: ‎07-04-2007

Re: Pension Timebomb

Quote from: hulls
People talk as if we didn't contribute anything, how many people on this forum put 7% of their salary into their pension? 

A lot I would expect. I use to and my employer use to contribute 13%. Which for a private sector company was very generous. It also was a final salary scheme but several years ago an unilaterally decision was taken to fix the salary. The contributions remained the same. The public sector will follow the private sector but with a lag of several years. So any public employee that is 10+ years away from retiring may find their index linked final salary pension changed if lucky to a index linked fixed salary or if unlucky to a money purchase pension.
Community Veteran
Posts: 18,936
Thanks: 318
Registered: ‎12-08-2007

Re: Pension Timebomb

It is the index linked aspect of public sector pensions that is unsustainable in the long term and i think a future government will have to deal with this.
itsme
Grafter
Posts: 5,924
Thanks: 1
Registered: ‎07-04-2007

Re: Pension Timebomb

Quote from: pierre_pierre
my pension fund managers have just published last years figure, they say never mind the figure, you are still safe?

Large pinch of salt to be taken with that statement.
The Financial Controller that use to administrate the company pension was assured by the actuaries that their was not a shortfall in the pension fund. A year later was told there was and it was blamed because we are all living longer. So the question was asked why was it okay a year ago but not now. The answer was that the actuaries work to a 5 year plan, so life expectancy is only reviewed every 5 years.
Community Veteran
Posts: 18,936
Thanks: 318
Registered: ‎12-08-2007

Re: Pension Timebomb

Life expectancy is a major problem that will face pension funds more and more in the future and there isn't really an answer to it apart form working longer and contributing more into the pot, which isn't always practical.  In the UK we can now expect to live to 79 (76 male 81 female).
http://en.wikipedia.org/wiki/List_of_countries_by_life_expectancy
Community Veteran
Posts: 1,100
Registered: ‎05-04-2007

Re: Pension Timebomb

My Great Aunt retired in May 1953 after 33 continuous service (she was 55 at the time). She had the option to take to take a lower pension but linked to nursing pay which she decided to take. She died at 99 and was very pleased that she had opted for the lower pension. So their is the next problem with the current system. If you manage to buy a pension with the accumulated funds it will most likely be a fixed amount for the rest of your life. So each year you watch the value of your pension go down, not a pleasant thing to look forward to. In real terms it is like your employer saying you will never get a pay rise!