Jump to content
House Price Crash Forum
AvidFan

Fresh Final Salary Scheme Accumulated Wealth Raid

Recommended Posts

http://www.thisismoney.co.uk/pensions/article.html?in_article_id=518870

New £100bn raid on final salary pensions

By Dan Hyde

25 November 2010

Billions of pounds could be wiped off private sector pensions under Government plans to throw a lifeline to Britain's flailing final salary schemes.

A new law could allow all UK companies to change the rate at which pension payouts increase each year from RPI inflation to CPI.

Accountants KPMG estimate this could reduce UK private sector pension liabilities by 10% or about £100bn.

That would help companies struggling to keep schemes open.

But turn it around, and that's £100bn taken from tomorrow's pensioners - cash they'd have previously pocketed during retirement.

../

What makes me think the next 30 years are going to be stagflationary at best - rising prices and no rising wages?

They'll regret launching China as the next empire. Silly S*ds.

Edited by AvidFan

Share this post


Link to post
Share on other sites

http://www.thisismoney.co.uk/pensions/article.html?in_article_id=518870

New £100bn raid on final salary pensions

By Dan Hyde

25 November 2010

What makes me think the next 30 years are going to be stagflationary at best - rising prices and no rising wages?

They'll regret launching China as the next empire. Silly S*ds.

Why cant they just sort these pensions out once and for all. Instead of mucking around tinkering with the rules, do the following.

1 ) Divide the fund up pro-rata according to contributions.

2 ) Give each scheme member the money to put into a SIPP.

3 ) Ban all final salary schemes, they are just too dangerous.

4 ) And those retired are not fully protected, they share the pain of any shortfall in the scheme with everyone else.

Once the members have their SIPP's, companies and the members themselves can contribute more monies into them. But there is no need for further twiddling with rules once the above has been followed.

Share this post


Link to post
Share on other sites

Why cant they just sort these pensions out once and for all. Instead of mucking around tinkering with the rules, do the following.

1 ) Divide the fund up pro-rata according to contributions.

2 ) Give each scheme member the money to put into a SIPP.

3 ) Ban all final salary schemes, they are just too dangerous.

4 ) And those retired are not fully protected, they share the pain of any shortfall in the scheme with everyone else.

Once the members have their SIPP's, companies and the members themselves can contribute more monies into them. But there is no need for further twiddling with rules once the above has been followed.

...AND... set up SIPP deposit accounts that wrap up high-street savings products to get people an RPI-like tax-free return on their cash.

That'd give the banks the extra cash they need. And it'd stop them ripping us of with 2.7% margins. And it'd eliminate risk for the pension savers.

No-one ever seems to think straight, do they?

Edited by AvidFan

Share this post


Link to post
Share on other sites

But turn it around, and that's £100bn taken from tomorrow's pensioners - cash they'd have previously pocketed during retirement.

Cash that they haven't saved but was supposed to come from the 8% yoy growth forever that never happened.

Share this post


Link to post
Share on other sites

"A new law could allow all UK companies to change the rate at which pension payouts increase each year from RPI inflation to CPI. "

I thought it was a done deal?

The BT boss must be in for a big pay rise thanks to the generosity of his pension plan members:

BT said the Government's decision to link pension increases to the consumer price index (CPI) rather than the retail price index (RPI) has reduced its mammoth pension fund deficit from £7.9bn to £5.2bn.

Analysts said the shift to CPI may allow BT to significantly reduce its 17-year deficit reduction payments. BT will continue to pump an extra £525m into the scheme this year and next, but may be able to use the change as leverage to reduce future payments (i.e. use that money to pay their fat cat bosses more salary and bonuses instead)

http://uk.finance.yahoo.com/news/bt-pension-deficit-falls-2-9bn-on-cpi-inflation-link-change-tele-829765679d1b.html

Share this post


Link to post
Share on other sites

"A new law could allow all UK companies to change the rate at which pension payouts increase each year from RPI inflation to CPI. "

I thought it was a done deal?

The BT boss must be in for a big pay rise thanks to the generosity of his pension plan members:

Defined benefit pensions are dangerous in so many ways. In the US, it is money from Defined Benefit Pension schemes that have financed their crooked liar loans. They have gone bad, so employers, often states, get the bill for the difference, which they are trying and failing to pass on as taxes.

All that money just generated a wall street feeding frenzy, as it searched for ways to defraud people out of their pensions, and that effort has succeeded in so many ways.

And as you say, reducing the liability of a pension scheme increases profits, and allows bosses to take larger bonuses, which they have not earned, but gained as a lucky legislative change in their favour.

Put pensions out of defined benefit schemes, and into SIPP's not only do you stop all this nonsense, but you also give the shareholder votes for this, back to the real beneficial holders. That would scare the top stealing bosses of UK industry more than anything, as it is their all too cosy relationship with fund managers that allow them to stay in their jobs at pay rates well in excess of what they are worth. Give those votes back to ordinary people, and I suspect you will see greedy board members voted out, and held to account.

The demise of defined benefit pensions cannot come soon enough. Trust people to look after their own money. If they lose it, then they have no one to blame but themselves. At the moment our system gives that money to others to lose, and disempowers the beneficial holder of those assets.

Share this post


Link to post
Share on other sites

It's £100bn that doesn't exist anyway.

Any pension funds are bankrupt.

Eventually the money left will be handed out to the eldest members and everyone else will be told to start again.

(That's not just a prediction, it's the law... if a fund folds, those in retirement get paid in full with what left handed out based on how near to retirement you are... if you 45 with a good pension plan you will probably never see a penny of it, no matter how much you've paid in.)

Share this post


Link to post
Share on other sites

It's £100bn that doesn't exist anyway.

Any pension funds are bankrupt.

....

Thank you. I was just thinking how do you raid something that doesn't exist? The idiots that have paid into these scams have already lost their money.

Share this post


Link to post
Share on other sites

Why is it so hard to provide for retirement? Just do it the old fashioned way which seemed to work for a few thousand years at least.

First you need a house paid for by the time you retire

Second you help look after the grandchildren for 10-15 years in return for their parents helping you in your last 5-10 years. This doesn’t have to be big help like wiping your **** or washing you or providing 24h care but helping cook some meals, do the shopping, do some of your washing, ironing and give you some company.

Third… those who provide you with full care should you need it get the house, that could be the kids, a company or someone else.

Fourth…. Be reasonable enough to end it if you get in a state which is a total burdon on those around you. Both families and society should accept life is limited and living like a baby in nappies with your mind as mush is not dignified or a good thing. Bring back the old days when a GP would if requested give the old man an overdose if it was clearly the best thing to do for the family and old folk.

Fifth and perhaps most importantly. WTF everyone seems to think they deserve a middle class retirement without the sacrifice of big savings while they are at working age. Multiple holidays. Eating out. Running a car or two not to mention the mandatory new car every three years. You don’t need to be a lemming staying at home listening to the radio all day but be reasonable. There are many thing you can do and enjoy that don’t cost a lot. Traveling the world in your retirement won’t be a goal most can achieve so stop trying to save and live that retirement.

Share this post


Link to post
Share on other sites

Why is it so hard to provide for retirement? Just do it the old fashioned way which seemed to work for a few thousand years at least.

First you need a house paid for by the time you retire

Second you help look after the grandchildren for 10-15 years in return for their parents helping you in your last 5-10 years. This doesn’t have to be big help like wiping your **** or washing you or providing 24h care but helping cook some meals, do the shopping, do some of your washing, ironing and give you some company.

Third… those who provide you with full care should you need it get the house, that could be the kids, a company or someone else.

Fourth…. Be reasonable enough to end it if you get in a state which is a total burdon on those around you. Both families and society should accept life is limited and living like a baby in nappies with your mind as mush is not dignified or a good thing. Bring back the old days when a GP would if requested give the old man an overdose if it was clearly the best thing to do for the family and old folk.

Fifth and perhaps most importantly. WTF everyone seems to think they deserve a middle class retirement without the sacrifice of big savings while they are at working age. Multiple holidays. Eating out. Running a car or two not to mention the mandatory new car every three years. You don’t need to be a lemming staying at home listening to the radio all day but be reasonable. There are many thing you can do and enjoy that don’t cost a lot. Traveling the world in your retirement won’t be a goal most can achieve so stop trying to save and live that retirement.

To sum up:

It's not possible to work for 40 years saving 10% of your wages then retire for 20 years on 60% of your final salary. The maths does not compute.

You want 20 years on 60% final salary you're ganna have to save 40-50% of your wages for your entire life.

Share this post


Link to post
Share on other sites

To sum up:

It's not possible to work for 40 years saving 10% of your wages then retire for 20 years on 60% of your final salary. The maths does not compute.

You want 20 years on 60% final salary you're ganna have to save 40-50% of your wages for your entire life.

retire at 65 on 40k

60% of this is 25k

at 3.5% annuity rate more or less inflation protected, this requires £700,000 lump sum to retire

with compound stock growth of 6% (reasonably conservative estimate) this requires 15 to 20% of salary put aside per year, half what you are saying

how did you cpome to your figure? did you just make it up?

(oh, 10% of salary saved would give 40% final sal - the numbers are pretty relentless)

Edited by Si1

Share this post


Link to post
Share on other sites

Why is it so hard to provide for retirement? Just do it the old fashioned way which seemed to work for a few thousand years at least.

First you need a house paid for by the time you retire

Second you help look after the grandchildren for 10-15 years in return for their parents helping you in your last 5-10 years. This doesn’t have to be big help like wiping your **** or washing you or providing 24h care but helping cook some meals, do the shopping, do some of your washing, ironing and give you some company.

Third… those who provide you with full care should you need it get the house, that could be the kids, a company or someone else.

Fourth…. Be reasonable enough to end it if you get in a state which is a total burdon on those around you. Both families and society should accept life is limited and living like a baby in nappies with your mind as mush is not dignified or a good thing. Bring back the old days when a GP would if requested give the old man an overdose if it was clearly the best thing to do for the family and old folk.

Fifth and perhaps most importantly. WTF everyone seems to think they deserve a middle class retirement without the sacrifice of big savings while they are at working age. Multiple holidays. Eating out. Running a car or two not to mention the mandatory new car every three years. You don’t need to be a lemming staying at home listening to the radio all day but be reasonable. There are many thing you can do and enjoy that don’t cost a lot. Traveling the world in your retirement won’t be a goal most can achieve so stop trying to save and live that retirement.

Spot on.

Share this post


Link to post
Share on other sites

retire at 65 on 40k

60% of this is 25k

at 3.5% annuity rate more or less inflation protected, this requires £700,000 lump sum to retire

with compound stock growth of 6% (reasonably conservative estimate) this requires 15 to 20% of salary put aside per year, half what you are saying

how did you cpome to your figure? did you just make it up?

(oh, 10% of salary saved would give 40% final sal - the numbers are pretty relentless)

The problem is that a fair chunk of those currently getting that 60% put in 5-10%, and are in schemes that pay that 60% at 55/60.

Share this post


Link to post
Share on other sites

To sum up:

It's not possible to work for 40 years saving 10% of your wages then retire for 20 years on 60% of your final salary. The maths does not compute.

...

Oh I don't know. Many have done that.

The problem is those that work for 25 years and pay 5% and retire on 60% of final salary for 30 years. (Like my mother in law)

Share this post


Link to post
Share on other sites

The whole idea of the various people you work for having to provide for your old age is silly, really.

You do work for someone, they pay for the work done.

That's it.

People should just save some of the money that they earn for their old age, and indeed for any other thing that they may need savings for.

Keep it simple.

There is no need to have this whole finance-industry driven "pensions industry" at all. Just long-term savings accounts.

Share this post


Link to post
Share on other sites

Oh I don't know. Many have done that.

The problem is those that work for 25 years and pay 5% and retire on 60% of final salary for 30 years. (Like my mother in law)

!!! Do you not get it? There are no pensions for the idiots who pay into them now! It's all been spent or stolen, or more likely never existed. When the house of cards finally collapses we will have old people homeless screaming.about their "pension rights" without ever realising that they were never supposed to be paid so much for so long despite what they were told.

The current lot protesting will NOT work till 80 or 90 to fund your sailing trip around Somalia. No pension certainly not what has been sold to you. I hope your in law has alternative income.

Share this post


Link to post
Share on other sites

There is no need to have this whole finance-industry driven "pensions industry" at all. Just long-term savings accounts.

Ahem who do you think would be running those and why do you think they would be any safer than pension funds.

Surely, the whole lesson of the current financial crisis is that almost none of these means of accumulating money to live on during your old age is safe from the wolves.

Share this post


Link to post
Share on other sites

I've said this on here before. The state pension is broken and the treasury, DWP and a million other quangos are pushing private pensions upon us. I guarantee the next cog in this great scam (20-25 years time) will be to make the state pension means tested by rolling it into the pension credit. The way it will be done may follow something like this... for every £2 of private pension income received you'll lose £1 off the state pension. They'll just make up the shortfall and 90% of the oldies will be in receipt of exactly the same pension.

Share this post


Link to post
Share on other sites

The problem is that a fair chunk of those currently getting that 60% put in 5-10%, and are in schemes that pay that 60% at 55/60.

indeed

Share this post


Link to post
Share on other sites

I am drawing a pension where my documentation clearly states linked to RPI.

Surely this is a contract that cant be broke.

I'll tell you what, if they do renege on this, even legally, I'll write you a cheque for £100,000 to help you out, a cheque is a contract afterall

Share this post


Link to post
Share on other sites

!!! Do you not get it? There are no pensions for the idiots who pay into them now! It's all been spent or stolen

If your pension is in a SIPP, the fund is not shared with the currently retired.

i.e. you just buy shares in a tax-efficient wrapper. Your fund cannot be claimed by anyone else (except the government of course, who may eventually force you to buy their debt, for your own good of course....)

Share this post


Link to post
Share on other sites

I am drawing a pension where my documentation clearly states linked to RPI.

Surely this is a contract that cant be broke.

Every contract can be broken.

If the state runs out of cash, then it will have to break contracts. You may get lucky, as everyone seems to want to keep pensions promises at all costs.

I sometimes feel alone is saying that the one promise that has to be broken is the state one to pensions. They are simply not affordable and you wont get a budget to balance unless that promise is broken.

So I guess we are both hoping I am wrong about this.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 259 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.