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http://www.bbc.co.uk/news/education-13761147

Christine Blower, general secretary of the National Union of Teachers, said the government's attack on public sector pensions left NUT members with no alternative but to strike.

"It is disgraceful that the government is pressing ahead with its reforms which will affect teachers' pensions.

Teachers say the planned pension changes will hit their pockets hard

"The government knows that they are affordable. This is a policy which has nothing to do with economics and everything to do with politics," she added.

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To be fair they are affordable. Just not at the same time as police, doctors, nurses, firemen, soldiers, civil servants etc pensions.

Any small group can be supported in isolation.

What the teachers are saying is f**k everyone else, pay us our pensions.

Which from their standpoint is quite reasonable.

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Q) When Gordon Brown raided tens of £billions from private sector pensions what did the teachers unions have to say?

A) "Our share first please boss".

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With a big strong economy, powered by heavy industry, pensions are affordable. With a wimpy zero carbon, sustainable economy, like the one teachers have been advocating and fighting for.. we honestly will be lucky to feed ourselves, let alone provide generous pensions to millions of people.

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I suspect this is all about horse trading. Government says we will cut your pension by 50%, teachers say no, leave it as it is. Eventual compromise at a 25% cut, and that then makes them affordable with both sides claiming victory.

I think teachers do a very difficult, very hard-working job - but unfortunately we just do not have the money to give them pensions twice as good as the private sector.

What the teachers are saying is f**k everyone else, pay us our pensions.

Which from their standpoint is quite reasonable.

No harm in asking, but the money just isn't there - so they won't win. Could get quite tiresome for the country as a whole if we get a strike every month by some group or other before the public sector workers all realise this.

With a big strong economy, powered by heavy industry, pensions are affordable. With a wimpy zero carbon, sustainable economy, like the one teachers have been advocating and fighting for.. we honestly will be lucky to feed ourselves, let alone provide generous pensions to millions of people.

Erm, when exactly did teachers fight for a zero carbon economy? Link??

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Any small group can be supported in isolation.

And if they contribute enough into the scheme.

The single biggest reform that needs to happen to public sector pension schemes is to replace final salary with career average. It's crazy that someone can spend 30 years on, say £30k a year, contributing to the scheme at that rate, then get a major promotion six months before retirement and be earning £40k with percentage contributions to match, then receive the same pension as someone contributing at the higher level for decades longer.

Edited by The Ayatollah Buggeri

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Last year I paid in £3.5k into my teacher's pension: fact

And have made similar (inflation adjusted) payments every year for the last 25 years

So, it's OK for the rest of the population to go along with the government's plan to default on its obligations to me, and in effect, steal my money.

Yes, of course its going to be OK with you lot - you get to enjoy £3.5k of my money every year via public services that you've not paid for.

In all honesty I'm expecting to receive nothing from the governmnent, and I'm actively trying to get my money + compound interest owed out - counterparty risk sucks!

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Last year I paid in £3.5k into my teacher's pension: fact

And have made similar (inflation adjusted) payments every year for the last 25 years

So, it's OK for the rest of the population to go along with the government's plan to default on its obligations to me, and in effect, steal my money.

Yes, of course its going to be OK with you lot - you get to enjoy £3.5k of my money every year via public services that you've not paid for.

In all honesty I'm expecting to receive nothing from the governmnent, and I'm actively trying to get my money + compound interest owed out - counterparty risk sucks!

And if you retire tomorrow what % of your final salary will you get? Is that sum index linked?

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So, Arbitrage, you paid in 3.5K for 25 years (inflation adjusted). 87.5K. Lets round it up to 100K to be generous and account for 'return on investment,' something incidentally you wont see in a privte sector money purchase pension sheme.

So, how much a year do you expect this scheme to pay out for? And for how many years? I genuinely want to know.

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Last year I paid in £3.5k into my teacher's pension: fact

And have made similar (inflation adjusted) payments every year for the last 25 years

So, it's OK for the rest of the population to go along with the government's plan to default on its obligations to me, and in effect, steal my money.

Yes, of course its going to be OK with you lot - you get to enjoy £3.5k of my money every year via public services that you've not paid for.

In all honesty I'm expecting to receive nothing from the governmnent, and I'm actively trying to get my money + compound interest owed out - counterparty risk sucks!

A lot of the problem is when these plans were put in place it was assumed that investments made by the pension funds would return 8.5% a year after inflation(and that remains the assumption). So if for arguments sake a teacher started working at 25 and retired at 60, that is 35 years intervening. £3,500 contributed that first year would grow to £60,000, and the £3,500 contributed the second year would grow to £56,000.

This powerful growth would also make up for the lower income during the first years, the increasing life expectancy, and the lower percent contribution of the first years.

If we take a more modest growth of the investment, say 2% a year after inflation. The £3,500 invested in that first year, would grow to only £7,000 pounds 35 years later.

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A lot of the problem is when these plans were put in place it was assumed that investments made by the pension funds would return 8.5% a year after inflation(and that remains the assumption).

Many US public pensions are running the same assumptions.

http://www.economist.com/blogs/buttonwood/2011/05/us_pension_funds

But the news is actually worse than that. This ratio is based on the official rate for discounting liabilities of around 8%, which in turn is derived from the expected return on assets. This is absurd on two counts. First, with 10 year Treasury bonds yielding 3.1%, the equity portion of a pension portfolio is going to have to return double digits to generate 8% on the whole lot. With a dividend yield of around 2%, that implies annual dividend growth of at least 8%, way too high in a low-inflation economy. Second, as the report states,

Standard financial theory suggests that future streams of payment should be discounted at a rate that reflects their risk. In the case of state and local pension plans, the risk is the uncertainty about whether payments will need to be made. Since these benefits are protected under most state laws, the payments are, as a practical matter, guaranteed. Consequently to assess accurately the status of a plan warrants discounting its stream of future benefits by the risk-free interest rate.

The pension system has become a casino to try and make up the shortfalls.

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I can understand why public sector staff feel cheated with their pension, they've entered into it with certain expectations of the outcome.

I think they should be given it.. so long as the govternment also enjoys the same outcome of its expectation, namely people only live until they're 70.. I'm sure if workers keep that end the bargain the govt will be happy to keep theirs.

Edited by exiges

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Last year I paid in £3.5k into my teacher's pension: fact

:lol:

Try the x47 rule (it used to be the 25 rule)

I.e. if you want £10K a year from your pension, your pension fund needs to be 47 times more than the pension you want to draw when you retire. Therefore if you get £10K per year pension when you retire and your pension fund isn't £470,000 then you've not paid fully into your pension for the benefit you receive. 25x£3500 grossed up for 25 years falls way short of £470K even assuming massive massive yearly growth.

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Last year I paid in £3.5k into my teacher's pension: fact

And have made similar (inflation adjusted) payments every year for the last 25 years

So, it's OK for the rest of the population to go along with the government's plan to default on its obligations to me, and in effect, steal my money.

Yes, of course its going to be OK with you lot - you get to enjoy £3.5k of my money every year via public services that you've not paid for.

In all honesty I'm expecting to receive nothing from the governmnent, and I'm actively trying to get my money + compound interest owed out - counterparty risk sucks!

See post #3.....

As a public sector worker your "lot" have been spending part of my pension fund on your salaries and pensions for over a decade.

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I can understand why public sector staff feel cheated with their pension, they've entered into it with certain expectations of the outcome.

I think they should be given it.. so long as the govternment also enjoys the same outcome of its expectation, namely people only live until they're 70.. I'm sure if workers keep that end the bargain the govt will be happy to keep theirs.

I'm sorry but what about the private sector types who have been cheated for years and years with no big leg breaking thug to back them up? Why am I paying NIC and taxes to pay for other peoples pensions and grossly inflated salaries when I'll see no benefit myself?

I and the private sector feel cheated all the time.

So my general attitude is to let them rot, as they are quite happy to let me rot.

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Last year I paid in £3.5k into my teacher's pension: fact

And have made similar (inflation adjusted) payments every year for the last 25 years

So, it's OK for the rest of the population to go along with the government's plan to default on its obligations to me, and in effect, steal my money.

Yes, of course its going to be OK with you lot - you get to enjoy £3.5k of my money every year via public services that you've not paid for.

In all honesty I'm expecting to receive nothing from the governmnent, and I'm actively trying to get my money + compound interest owed out - counterparty risk sucks!

My brother is a copper - he also feels cheated. Unfortunately, your £3.5k of contributions p.a. does not even begin to pay for the pension you will receive. The rest is made up by the increasingly burdened taxpayer.

In the private sector we have had to shrug and get on with it.

We can't afford these pensions anymore - it's FACT.

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http://www.bbc.co.uk/news/education-13761147

Christine Blower, general secretary of the National Union of Teachers, said the government's attack on public sector pensions left NUT members with no alternative but to strike.

"It is disgraceful that the government is pressing ahead with its reforms which will affect teachers' pensions.

Teachers say the planned pension changes will hit their pockets hard

"The government knows that they are affordable. This is a policy which has nothing to do with economics and everything to do with politics," she added.

it is amazing how they can afford to pay unemployed a pay rise , they can ring fence of £26000+income for people who are not working, yet anything for people who are working are being cut, this country,and goverment needs to get real, the incentive to work is being killed off in this country.

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We can't afford these pensions anymore - it's FACT.

Always amazes me when people of my generation tell me they have retired. Invariably they are all public sector workers. I wonder what they are going to do with the rest of their lives. Someone retiring at say 55, may have worked less than 35 years (assuming they went to university) and in all likelihood have another good 30 years of life ahead of them. That's a lot of funding for an increasing number of pensioners from a diminishing pool of workers.

Many people with private sector pensions keep working. My Dad is still working and will be 70 next year. Not sure I will ever retire, unless I am forced to through lack of work or ill health.

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it is amazing how they can afford to pay unemployed a pay rise , they can ring fence of £26000+income for people who are not working, yet anything for people who are working are being cut, this country,and goverment needs to get real, the incentive to work is being killed off in this country.

+1

At lower rates of pay there is a disincentive to work. People's lives are determined by their income. Doubtless had benefits been less beneficial down the years, people would have got into the position they are in. Likewise with mortgage lending. It could be far more than houses that crash in the next ten years.

Edited by arrgee1991

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Always amazes me when people of my generation tell me they have retired. Invariably they are all public sector workers. I wonder what they are going to do with the rest of their lives. Someone retiring at say 55, may have worked less than 35 years (assuming they went to university) and in all likelihood have another good 30 years of life ahead of them. That's a lot of funding for an increasing number of pensioners from a diminishing pool of workers.

Many people with private sector pensions keep working. My Dad is still working and will be 70 next year. Not sure I will ever retire, unless I am forced to through lack of work or ill health.

They will be in for a nasty surprise tbh, as there is going to be some sort of default or reset in the next 5 or so years.

The least worst option is if we go Russia, whereby mid 1990s they went through a nasty period of hyperinflation. This wiped out the pensioners and a lot of the savers. They hyperinflated again twice. Which cleaned out the pensioners again (its why russians won't save money in Rubles). by 2003ish it gave them a clean slate of which to start again and rebuild.

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State failure due to competing VI's trying to grab the printing press must be obvious to everyone by now, surely?

"It's the right thing to do!" Will be the cry. "I was promised, it isn't fair!" "We had a deal, it's the contract." etc etc

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Last year I paid in £3.5k into my teacher's pension: fact

You can have YOUR contribution as your pension anytime you like.

How much does your employer add on top?

Why aren't pensions capped either at something approaching an average amount?

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  • 284 Brexit, House prices and Summer 2020

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      • down 5% +
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      • Even
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