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What Happened To The Promised Pensions?

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Of course they bloody can't, and they never intended to pay out either.

With you on that one....maybe they might get a little bit. ;)

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IF employment continues at much the same level, with much the same salaries in real terms, IMHO there should not be any problem in paying final-salary pensions at somewhere near the promised levels. The problems come when you have a contracting work-force and contracting median real income.

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http://news.bbc.co.uk/1/hi/business/8115196.stm

Can companies/public sector afford to pay all that has been promised?

In a word. "No". I have been wondering this myself.

You pay into a pension for 40 years and you come to retire would you receive a letter like below :

"Dear Mr/Mrs .....,

Congratulations on your upcoming 65 year old birthday. Thank you for your recent enquiry regarding your pension. Unfortunalty, due to recent past performance their is insuffient funds available in your pension pot, for you to retire at this time. We would like to recommend that you work for an addition 10 years and make larger contributions, so you can spend your retirement on a modest income.

Please also note, that because you have a private pension, this will affect any claim for Pension Credit to be paid along with your state pension.

Your sincerely

Mr. H Avingagood Time.

Edited by debt-free

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IF employment continues at much the same level, with much the same salaries in real terms, IMHO there should not be any problem in paying final-salary pensions at somewhere near the promised levels. The problems come when you have a contracting work-force and contracting median real income.

At the moment some can take their pensions at 50 so it is very possible to spend more years in retirement than employment. How long can that be sustained?

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In a word. "No". I have been wondering this myself.

You pay into a pension for 40 years and you come to retire would you receive a letter like below :

"Dear Mr/Mrs .....,

Congratulations on your upcoming 65 year old birthday. Thank you for your recent enquiry regarding your pension. Unfortunalty, due to recent past performance their is insuffient funds available in your pension pot, for you to retire at this time. We would like to recommend that you work for an addition 10 years and make larger contributions, so you can spend your retirement on a modest income.

Please also not, that because you have a private pension, this will affect any claim for Pension Credit to be paid along with your state pension.

Your sincerely

Mr. H Avingagood Time.

Anyone who worked 40 years on PAYE on 23k a year would get state pension including 2nd state pension of £162 a week.So nobody who works for 40 years will be entitled to pension credit anyway.

For a couple if one works 40 years,the other 30 years the combined pensions will be £290,again meaning no pension credit and around £15 council tax and if renting £54 rent.

Means tested benefits are set just below what someone who worked 40 years will get.

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Anyone who worked 40 years on PAYE on 23k a year would get state pension including 2nd state pension of £162 a week.So nobody who works for 40 years will be entitled to pension credit anyway.

For a couple if one works 40 years,the other 30 years the combined pensions will be £290,again meaning no pension credit and around £15 council tax and if renting £54 rent.

Means tested benefits are set just below what someone who worked 40 years will get.

If you say so. I have no idea, I was guessing.

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If you say so. I have no idea, I was guessing.

Take the money and run....if you receive a pension it doesn't mean you can't work, but if you are not drawing it you may not get what you expect from it. ;)

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According to the Pension Protection Fund (PPF), the shortfall in the UK's 7,400 defined-benefit schemes stood at £179.3bn at the end of May. By contrast, one year ago there was a surplus of £51bn.

Companies are increasingly moving staff into defined-contribution pension schemes - whereby workers pay money into a pension fund which is ultimately used to buy a financial product called an annuity that provides an income in retirement.

What I find more "interesting" are those that took a job on expecting / agreeing a FSP and now the company has turned around and stopped / frozen it like a large Japanese IT company just did.

When will councils and governments follow suit?

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What I find more "interesting" are those that took a job on expecting / agreeing a FSP and now the company has turned around and stopped / frozen it like a large Japanese IT company just did.

When will councils and governments follow suit?

To be truthful we can only just about afford to pay what we require in the present and invest in the future, not the past. ;)

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until most of the muppets realise its yet another big ponzi scam

A pension is a carrot the donkey would have eaten by the time it comes to claim it. ;)

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Of course they bloody can't, and they never intended to pay out either.

Yup, just like our debt, it will be someone elses problem to sort in the future <_<

Only problem is, the future at some point becomes tomorrow...

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IF employment continues at much the same level, with much the same salaries in real terms, IMHO there should not be any problem in paying final-salary pensions at somewhere near the promised levels. The problems come when you have a contracting work-force and contracting median real income.

I would love to have your positive feeling re the promised pensions and our future,,,tell me is our workforce/income expanding?

All I can see is our debts and liabilities increasing and escalating. ;)

Tell me I am wrong.

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Increased contributions (effectively a massive increase in income tax but not called that).

Reduced benefits in terms of years earned etc.

but these particular sanctions haven't been applied to public sector FSPs, have they?

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Not final salary but average salary or min salary....your final quality life is in their hands don't rely on anything or you might be disappointed. ;)

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A lot of the posters on here seem to forget that Civil Service pension and Government schemes have already been amended....Take HM forces scheme:AFPS 75 and AFPS 05

AFPS 75 sees me at age 40 get a pension of £12K a year fixed to age 55 and then index linked back 15 years and then on.

AFPS 05 would have seen me get a pension dependent on years served. For me it would have been 24.1/70th of £41,200 some £14,125

However from age 40 to 55 on AFPS 05 you only get 50% of that so £7050 a difference from AFPS 75 of £5K a year. From age 55 to 65 you only get 75% a difference of £1250 a year. Only from age 65 on AFPS 05 do you get the full 100% pension.

All new joiners after April 05 are enroled on the AFPS 05 scheme.

Military pensions have already been addressed to make them cheaper in the long run. Pension entitlement is the major retainer for men and women in the pension trap i.e last 10 years of service. Get rid of this and all the experience will simply resign. No one goes to Afg /Iraq for the fun of it.

Civil service scheme has similarly recently been changed from the Classic scheme to a less gernous one with greater employee contribution.

Posters on here seem to think it's a non contributation scheme.

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I don't think they deliberately intended never not to pay it.

They just put it, put it off, put it off....until it's too late.

The steps taken so far - but always too little too late...

Excluded new joiners (i.e. predominately young people) from benefiting from final salary pensions.

Increased contributions (effectively a massive increase in income tax but not called that).

Reduced benefits in terms of years earned etc.

Removed schemes from existing employees.

Former public sector and private sector workers outsourced to save on pension costs.

NEXT

Public sector pension final salary schemes removed stepwise.

And in the end - pension benefits for existing employees reduced possibly by mass 'bankruptcy' to remove liabilities but maintaining companies as going concerns.

Any way,reason,excuse to get out from paying what was promised.

Never believe what you are told or you might be disappointed. ;)

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Posters on here seem to think it's a non contributation scheme.

I think the main concern is whether money is actually put aside - personal or company funded. The fear is that it needs toi be subsidised in the future, ie unfunded liabilities. To be honest the last people I would criticise is the forces tho.

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Can companies/public sector afford to pay all that has been promised?
Of course they bloody can't, and they never intended to pay out either.

I half agree with Injin. Of course not EVERYONE will get paid in full, but some people will and most should get something - these pension funds have billions of pounds set aside even if it is still some billions short.

As for intent: the original schemes were often set up to pay very low pensions, but repeated government rules and increasing life expectancy have bumped up the costs.

Didn't I read a post yesterday that new EU capital adequacy rules will drop all UK pension incomes by 20%?!!

swept over the nation without a murmur. A lifetime of �1 in every �5 missing lies ahead, but as long as there's pie and chips for tea, and footie on the telly all is well. We are a funny, lovable, gullible bunch.

The question I'd like to know is whether the proposed new capital reserving rules ("Solvency II") are necessary or not. It is clear that certain financial institutions (HBOS, Northern Rock etc etc) ran out of capital - but I don't know if Solvency II is overkill or just prudent.

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What concerns me is Public Sector Final Salary schemes. As far as I know, there is no big pension pot to fund these, just the tax payer and government borrowing. In addition, the number of public sector employees reaching pension age will rise substantially over the next few years.

To renage on these pensions would probably be political suicide. However, if we have significantly high inflation over the next decade, perhaps the value of these pensions will be inflated away. Especially if the index linking does not reflect the true inflation rate.

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When I first read about these wonderful final salary pensions quite a few years ago I said that they were completely unsustainable, I was derided and treated as a fool.

Basic arithmetic at 11 year old level in the 1950s would eventually have proved me right. :rolleyes:

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I don't think they deliberately intended never not to pay it.

yeah - it's called financial innovation. The original idea was that everybody wins but the reality is the innovators win and those that buy in lose. Collatoralised debt obligations and mortgage backed securities come under the same catagory.

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