Jump to content
House Price Crash Forum
cashinmattress

Local Council Pension Deficit Hits £100 Billion

Recommended Posts

Link

The Local Government Pension Scheme deficit has hit £100 billion, over double what it stood at three years ago.

The deficit is now equivalent to 7% of the UK’s economic output, up from £42 billion three years ago, according to a report by pension consultant John Ralfe.

Assets in the scheme have risen just 8% in three years to £132 billion, vastly outweighed by the liabilities which have risen 41% to £232 billion. The report says the liabilities have been increased by a rise in the value of benefits for local council staff and a fall in interest rates.

The BBC reports the scheme has four million members, including 1.7 million current employees paying into 81 regional pension funds.

As part of government changes to pensions the scheme is due to be linked to the consumer price index which will save £20 billion. However, it will still require staff and taxpayers to contribute £4 billion more a year.

Ralfe said the official deficit which the scheme will report next year will be lower as it is allowed to use less conservative valuation methods than private schemes, the BBC reports.

6.gif

This thing is getting out of hand at breakneck speed. It was only January 2010 that the council pension deficit was reported at £60 billion (here).

These things, pensions, are an anomaly.

They only work if there are more people putting in than taking out, and as you can see from this graphic from the statistics office, that isn't going to be the case from now on. The only options at this point are for the state to increase, by a massive margin, the levels of immigration as we can't just create people, jack up the contribution levels, and to push the retirement age back. This is providing that your pension fund manager, in this case the state, is making intelligent, ethical decisions in regards to you investments and not tank it on the back of some trading city swindler's recommendation. Haha.

All the financial trickery and account book smudgery is not going to paste this one over, expect a non-existent retirement.

But it beg's the question, what jobs will this massive wave of geriatrics perform to insure a decent standard of living?

All these folk are going to be selling up and moving to bigger population centres where they can get medical treatment and access to services as well.

Where are you going to put your savings in order to ensure some kind of quality of life?

How many folk are still hanging on to the notion of perpetual housing inflation?

Did you know that output in oil and gas from the North Sea will be half of today's levels in the 2020's?

Things are going to get very messy.

EDIT: snap SarahBell

Edited by cashinmattress

Share this post


Link to post
Share on other sites

EDIT: snap SarahBell

:)

After having been asking about it yesterday it was good to see the news (not good but you know what I mean)

I think pensions need looking at seriously now.

Share this post


Link to post
Share on other sites

:)

After having been asking about it yesterday it was good to see the news (not good but you know what I mean)

I think pensions need looking at seriously now.

I am 40, but how do you think this news sits with those who are 50-60-ish.

There will be more civil unrest in this nation.

Share this post


Link to post
Share on other sites

I am 40, but how do you think this news sits with those who are 50-60-ish.

There will be more civil unrest in this nation.

There will be but you can't get blood from a stone.

Something has to give.

Pensions have always been seen as an unworkable idea (I have a quote from some politician somewhere back in about 1900ish saying that it'll fail sooner or later)

Share this post


Link to post
Share on other sites

Isn't the obvious solution to all this is to reduce the amount of pension the current lot are drawing? Surely this isn't rocket science?

That will mean introducing a constitutional amendment.

Unfortunately, with our 'democracy' and it's five year incumbent longevity, the politico don't like to push for these kinds of reforms until their last year of tenancy.

Or never for that matter.

Share this post


Link to post
Share on other sites

Isn't the obvious solution to all this is to reduce the amount of pension the current lot are drawing? Surely this isn't rocket science?

I see the obvious solution as a cull of the over 65's. Once per year for the next, oh, 18 years..... ;)

Share this post


Link to post
Share on other sites

Isn't the obvious solution to all this is to reduce the amount of pension the current lot are drawing? Surely this isn't rocket science?

As usual in this country it's possible to break promises made to the young but one must never effect changes that disadvantage the boomers. They vote.

Share this post


Link to post
Share on other sites

I see the obvious solution as a cull of the over 65's. Once per year for the next, oh, 18 years..... ;)

As long as it is done nicely, sure.

Euthanasia will become an avenue out for Britain when we eventually (hopefully) adopt this policy on compassionate grounds.

Share this post


Link to post
Share on other sites

The obvious answer is to cease the obsession that everyone must live forever.

If we concentrated on living healthy, fulfilling lives and dumped right s to eternal treatment we'd solve both health spending and pensions problems. Of course, say that in public and you'll get slaughtered, but like advocating legalising drugs, questionaing multi-culturalism, etc. eventually it will dawn on people that there's no other option and will become mainstream.

Share this post


Link to post
Share on other sites

The obvious answer is to cease the obsession that everyone must live forever.

If we concentrated on living healthy, fulfilling lives and dumped right s to eternal treatment we'd solve both health spending and pensions problems. Of course, say that in public and you'll get slaughtered, but like advocating legalising drugs, questionaing multi-culturalism, etc. eventually it will dawn on people that there's no other option and will become mainstream.

Well, you can start by getting rid of the face of entertainment today, with their botox, facelifts, body alterations, etc...

I recommend you start with dross like Cowell, then go after others who have shamefully outlived their fame like Cher, Burt Reynolds, et al.

Share this post


Link to post
Share on other sites

Isn't the obvious solution to all this is to reduce the amount of pension the current lot are drawing? Surely this isn't rocket science?

The over 60's and Baby Boomers vote in elections - governments that nominally reduced their pensions would be like turkeys voting for christmas ;) Of course they could just let inflation rip :unsure:

I had heard that 30% of your council tax bill goes to pay for local authority/police pensions - anyone know the facts?

Edited by skomer

Share this post


Link to post
Share on other sites

Well, you can start by getting rid of the face of entertainment today, with their botox, facelifts, body alterations, etc...

I recommend you start with dross like Cowell, then go after others who have shamefully outlived their fame like Cher, Burt Reynolds, et al.

I'm not sure I'd "go after" anybody. Let them have their facelifts etc. The problem is with the headf*ck that gets done to people when children that deprives them of self-respect and independence, and then makes them suseptible to these influences. Fix the root cause, not the symptom.

Back to pensions/health, all this stuff will happen, but only when the crisis is reached and pensions/NHS are largely defaulted. People only change their attitudes when they are forced to confront new circumstances, they won't change their opinion through debate. Look at the deficit debate now; everyone wants it but without any cuts. It's puerile.

Share this post


Link to post
Share on other sites

In 2000 the FTSE was at 7000 and bond rates were 5%

10 years on the FTSE has lost 15% of its value and bond yields are about 10x smaller.

It is a mircale that any pension fund is running without a defecit.

The one thing you would not hear complaints about is if they capped the payout of all final salary schemes (public or private) to £25000 a year.

As I've said before I know several recent retirees on more than £30k each in retirement having retired by 60 - more in many cases than their children earn in full time work!

Share this post


Link to post
Share on other sites

As I've said before I know several recent retirees on more than £30k each in retirement having retired by 60 - more in many cases than their children earn in full time work!

I have family in that scenario, and I think it is disgusting.

Well, they did set up the schemes, and funded them. They also created the cast iron guarantees and constitutional accords to protect them.

But, at the end of the day, that money is not always going to be there as it requires borrowing from somewhere.

That may not be today, or in this decade, but we all know the state has a habit of moving goalposts.

Share this post


Link to post
Share on other sites

Isn't the obvious solution to all this is to reduce the amount of pension the current lot are drawing? Surely this isn't rocket science?

This is the only solution. It is a choice how to do it. Either you legislate, and be honest about it, or you wait until the schemes fail with many people wiped out and no time to put it right.

The only right solution is to do this now, the earlier it is done, the less pain for everyone.

Share this post


Link to post
Share on other sites

It is a mircale that any pension fund is running without a defecit.

AAAHHHH! Enough with the all pensions are ponzi schemes baloney already.

My primary pension scheme has ranged from a 100% surplus to about a 12% deficit and is currently about even.

Its a billion pound fund for about 4000 people paying final salary pensions to people who also received decent salaries.

I keep posting this - some pension schemes are professionally managed and haven't been dipped into

by theiving execs.

Its appalling how many have been badly run and skimmed but its not ALL of them.

The one bad thing about the scheme is that the Final Salary option was closed to new members about 10 years ago but

the existing and deferred pensioners will get their benefits albeit partly in the form of wealth transfer from the young

to the old.

Share this post


Link to post
Share on other sites

But, at the end of the day, that money is not always going to be there as it requires borrowing from somewhere.

That may not be today, or in this decade, but we all know the state has a habit of moving goalposts.

These goalposts need moving now.

It's all very well saying the oldies vote but the young have started to vote with violence.

Wait til someone aged 18 puts it together than the pension generation has all the wealth.

Share this post


Link to post
Share on other sites
Every household to pay an "extra £200" to plug local Government pension black hole
Share
retweet
Print..Topics:Pensions & Retirement.Myra Butterworth, 13:46, Wednesday 15 December 2010
Every household in Britain will need to pay an extra £200 a year to plug the black hole in local Government pensions, figures have suggested.
Latest research suggests the deficit in Local Government Pension Schemes in England may have more than doubled in the past three years to £100 billion.

And pay we all shall.

Share this post


Link to post
Share on other sites

Wouldn't it make sense to give them £200 worth of an unemployed person's time?

That's about 33 1/2 hours a year.

Easy.

What's that about 40 minutes a week and 2 weeks off?

Sounds like a much better use of time and resources.

That unemployed person could do tedious household jobs, gardening,etc.

Share this post


Link to post
Share on other sites

I know someone in the public sector currently earning £60k and can retire at 58 on 80% final salary so £48k if it were today. She still has another 25 years to work though and paying in 3% of her annual salary (it might possibly go up to 7%).

Share this post


Link to post
Share on other sites

I know someone in the public sector currently earning £60k and can retire at 58 on 80% final salary so £48k if it were today. She still has another 25 years to work though and paying in 3% of her annual salary (it might possibly go up to 7%).

Can I enquire what area of the public sector.

I know most are capped at 50% (NHS, Teachers, Local government - contributory schemes) with civil servants in whitehall getting 66% (non-contributory)

80% seems ridiculous.

Share this post


Link to post
Share on other sites

Can I enquire what area of the public sector.

I know most are capped at 50% (NHS, Teachers, Local government - contributory schemes) with civil servants in whitehall getting 66% (non-contributory)

80% seems ridiculous.

Agreed, and the NHS was considered one of the better ones.

Not that it matters. they could 'promise' 100% if they wanted, as none of it will be getting paid out in ten years time.

Share this post


Link to post
Share on other sites

Can I enquire what area of the public sector.

I know most are capped at 50% (NHS, Teachers, Local government - contributory schemes) with civil servants in whitehall getting 66% (non-contributory)

80% seems ridiculous.

It's Whitehall.

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.

  • 312 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.