Millions To Lose 'up To 75 Per Cent Of Retirement Income' After Pension Changes.

[Butthead]

There's no free pot of money. If you force employers to "take responsibility" like the article seems to suggest then you create a massive financial burden on them that reduces their ability to employ. Defined Benefit schemes and retiring on 2/3rds final salary is dead, it was financially unsustainable due to being far too good, and it's never coming back no matter how many lefties write wailing articles.

What we need is:

The state to stop providing a vastly better pension scheme for public sector workers than the private sector can afford.

Employers to be compelled to pay into pensions when their staff do (this is coming - from 2012).

Pension charges to be reduced (and again, with a cheap-as-chips national scheme - NEST - coming in 2012 this will put pressure on more expensive provider options).

[bmf]

There's no free pot of money. If you force employers to "take responsibility" like the article seems to suggest then you create a massive financial burden on them that reduces their ability to employ. Defined Benefit schemes and retiring on 2/3rds final salary is dead, it was financially unsustainable due to being far too good, and it's never coming back no matter how many lefties write wailing articles.

What we need is:

The state to stop providing a vastly better pension scheme for public sector workers than the private sector can afford.

Employers to be compelled to pay into pensions when their staff do (this is coming - from 2012).

Pension charges to be reduced (and again, with a cheap-as-chips national scheme - NEST - coming in 2012 this will put pressure on more expensive provider options).

Agreed. If you want a pension of a certain amount and you don't earn enough then the only way to square that circle is defined benefit. If you are saving enough you have defined contribution. It's just a fig-leaf for a plan that doesn't add up. Who fills the gap? The next generation. PAYE!

[easy2012]

There's no free pot of money. If you force employers to "take responsibility" like the article seems to suggest then you create a massive financial burden on them that reduces their ability to employ. Defined Benefit schemes and retiring on 2/3rds final salary is dead, it was financially unsustainable due to being far too good, and it's never coming back no matter how many lefties write wailing articles.

What we need is:

The state to stop providing a vastly better pension scheme for public sector workers than the private sector can afford.

Employers to be compelled to pay into pensions when their staff do (this is coming - from 2012).

Pension charges to be reduced (and again, with a cheap-as-chips national scheme - NEST - coming in 2012 this will put pressure on more expensive provider options).

Think the key issue here is retirement age. 65 years old retirement age was set at a time when not many live till 65. Maybe employee should be given a choice - final salary

to be collected from 75 or the defined contribution...

[bmf]

Think the key issue here is retirement age. 65 years old retirement age was set at a time when not many live till 65. Maybe employee should be given a choice - final salary

to be collected from 75 or the defined contribution...

If a final salary scheme collected at 75 adds up then why not make it defined contribution?

Defined benefit is there for one reason: it doesn't add up if you make it defined contribution.

Aside: who would employ someone aged 65 in the knowledge that they are going to have to pay them 20 years final salary in 10 years time? Only the state because it's not "their" money.

[Georgia O'Keeffe]

Think the key issue here is retirement age. 65 years old retirement age was set at a time when not many live till 65. Maybe employee should be given a choice - final salary

to be collected from 75 or the defined contribution...

No, the key issue is guaranteeing a return at some point in the future in the belief its eliminated risk rather than the reality of simply moving it somewhere else. Final salary should never have been introduced and should be scrapped yesterday. You cant eliminate risk and therefore shouldnt be able to make promises that may or may not be depending on the weather at some point in the future unfulfillable.

Ultimately it upsets people alot more losing something theyve been promised and believe is theirs by right than upsetting them at the start by not promising it in the first place

Edited September 11, 2011 by Tamara De Lempicka

[corevalue]

No, the key issue is guaranteeing a return at some point in the future in the belief its eliminated risk rather than the reality of simply moving it somewhere else. Final salary should never have been introduced and should be scrapped yesterday. You cant eliminate risk and therefore shouldnt be able to make promises that may or may not be depending on the weather at some point in the future unfulfillable.

Ultimately it upsets people alot more losing something theyve been promised and believe is theres than upsetting them at the start by not promising it in the first place

Would you countenance the payment into a pension in terms of non-inflatable assets, say yellow metal, rather than manipulatable fiat? If we had a means to save our own money SAFELY then most of these ponzi schemes could be avoided.

[indirectapproach]

It's not as is no one could see this coming or anything is it?

[leicestersq]

No, the key issue is guaranteeing a return at some point in the future in the belief its eliminated risk rather than the reality of simply moving it somewhere else. Final salary should never have been introduced and should be scrapped yesterday. You cant eliminate risk and therefore shouldnt be able to make promises that may or may not be depending on the weather at some point in the future unfulfillable.

Ultimately it upsets people alot more losing something theyve been promised and believe is theirs by right than upsetting them at the start by not promising it in the first place

Final salary schemes should be ended. Private ones should be wound down with the burden of any deficit shared between all members equally. Those retired must lose their right to have first dibs on the assets.

[leicestersq]

It's not as is no one could see this coming or anything is it?

No one likes to face people and tell them the truth, that there isn't enough money, so they kick the can. They hope the cash runs out after they gave gone.

[leicestersq]

Would you countenance the payment into a pension in terms of non-inflatable assets, say yellow metal, rather than manipulatable fiat? If we had a means to save our own money SAFELY then most of these ponzi schemes could be avoided.

There is no safe way to save. The longer you save for, the riskier it gets.

[bmf]

It's not as is no one could see this coming or anything is it?

Depends on if you have your greed goggles on.

[Georgia O'Keeffe]

Would you countenance the payment into a pension in terms of non-inflatable assets, say yellow metal, rather than manipulatable fiat? If we had a means to save our own money SAFELY then most of these ponzi schemes could be avoided.

to be honest i think pensions themself should be scrapped it, its part of the reason for peak debt and people should in my view be able to invest in anything they want as long as they alone are exposed to their risk, once that happens the people might one day want to do something about FIAT because there is less chance of pushing the risk of it onto someone else

[erranta]

http://uk.finance.ya...593497.html?x=0

'Millions of workers will have their retirement incomes stripped of up to three quarters of their value after ministers abandoned savers to "predatory" private pension providers, a report warns.

Lifted from 'comments'

http://www.telegraph...th-bankers.html

Mad GP said:

"We know that when the FDIC closes down banks, the recovery on their assets is around 40% less than the value stated in their most recent balance sheet. Fraud has almost certainly occurred with the criminals getting off scot-free

Some bankers have finally admitted that many banks would be declared insolvent today if their assets were valued at market prices. That too imp_lies ba_lance sheet fraud.

If this was a liquidity crisis, the actions taken in 2008 would have produced a healthy banking system. They didn't. This is a crisis of insolvency. Companies that continue trading while de facto insolvent can only do so by cooking the books, misleading investors and regulators.

Once insolvency is finally recognised, the books of any banks closed down must be examined by forensic auditors, with any executives guilty of fraud jailed, and those guilty of negligence barred from the industry for life

The polling will get worse for this generation of bankers. Once there is widespread public recognition of the systemic fraud embedded in the system, adverse polling data will be the least of their worries"

Edited September 11, 2011 by erranta

[leicestersq]

succinctly put.nail head etc.it's all about sustainability be it the NHS,soc sec or pensions.I get the feeling that a lot of people are gonna be shocked wehn they retire into poverty.

Many are more shocked to find years of pensions savings wiped out. Few realise where the money has gone, to pay the pensions of the same scheme that have retired earlier.

[indirectapproach]

"No one likes to face people and tell them the truth, that there isn't enough money, so they kick the can. They hope the cash runs out after they gave gone."

That is why the sins of the fathers are visited upon the children,

[leicestersq]

Lifted from 'comments'

http://www.telegraph...th-bankers.html

Interesting comment there. Massive balance sheet fraud throughout the financial sector. To be expected if the crime is never punished.

[R K]

No, the key issue is guaranteeing a return at some point in the future in the belief its eliminated risk rather than the reality of simply moving it somewhere else. Final salary should never have been introduced and should be scrapped yesterday. You cant eliminate risk and therefore shouldnt be able to make promises that may or may not be depending on the weather at some point in the future unfulfillable.

Ultimately it upsets people alot more losing something theyve been promised and believe is theirs by right than upsetting them at the start by not promising it in the first place

This is all complete nonsense.

There are regular periodic actuarial valuations and agreed changes to e'ee/e'er future contributions as required. Precisely as ought to happen.

You're talking as if some agreement is made 30 years ago and is written in stone forever which again is complete nonsense.

[leicestersq]

aye.ave divi on the ftse 100 usually 3%,pay out 1.5% in charges,you're losing 50% of your compound growth ovber the pensions life.

the only people getting rich are the pension managers/stock brokers scabbing off the fees.most people I know in the industry are some of the worst investors I've come across.youd do better with BTL longer term and that's a crap invesment from 2002 on.

I think that the charges you are talking about don't apply to defined benefit pension schemes. Those charges are for defined contribution schemes.

[Georgia O'Keeffe]

This is all complete nonsense.

There are regular periodic actuarial valuations and agreed changes to e'ee/e'er future contributions as required. Precisely as ought to happen.

You're talking as if some agreement is made 30 years ago and is written in stone forever which again is complete nonsense.

behave, how nuch adjustment is made to those withdrawing from the scheme when the actuary puts his hand up in the air and decides this will be the parameters for the next 3 years or are you suggesting when its closed and 100% of future company profits are required as a contribution from non beneficiaries this is perfectly reasonable, or maybe they govt can come in and just bail em out, that works well,

you are talking chuff there is absolutely no sound reason for redistributing risk via a guarantee

Edited September 11, 2011 by Tamara De Lempicka

[Butthead]

I think that the charges you are talking about don't apply to defined benefit pension schemes. Those charges are for defined contribution schemes.

Defined benefit pension schemes incur charges too, large ones! They have to pay for actuarial work, for investment advice and placement and for administration in such a way that the cost far exceeds that of a simple defined contribution setup. The difference is that those charges aren't borne by the members, they've borne by the scheme and so are paid for by the sponsoring employer.

So again, we're back to the fact that while defined benefit schemes are excellent for their members, they are hugely expensive for employers and enabling people to retire at age 65 (or earlier) on 2/3rds final salary simply isn't viable.

Edit: And the point about FTSE dividend at 3%, charges at 1.5% = losing "half your compound growth" is nonsense as it ignores the potential for capital appreciation with the stocks bought.

Edited September 11, 2011 by Voice of Reason

[robmatic]

aye.ave divi on the ftse 100 usually 3%,pay out 1.5% in charges,you're losing 50% of your compound growth ovber the pensions life.

the only people getting rich are the pension managers/stock brokers scabbing off the fees.most people I know in the industry are some of the worst investors I've come across.youd do better with BTL longer term and that's a crap invesment from 2002 on.

Retail investors can invest in a FTSE 100 tracker at a TER of 0.25% or less. If you're paying an AMC of 1% or 1.5% you are effectively paying for the 'distribution' or advice, such as it is: the initial commission that an IFA receives, the trail commision of about 0.5% that they receive every year and the marketing spend on persuading them to take commission. Whether you think this is worthwhile or not, it is your choice.

[easy2012]

If a final salary scheme collected at 75 adds up then why not make it defined contribution?

Defined benefit is there for one reason: it doesn't add up if you make it defined contribution.

Aside: who would employ someone aged 65 in the knowledge that they are going to have to pay them 20 years final salary in 10 years time? Only the state because it's not "their" money.

You are aware the the amount of final salary is calculated as final salary (or average salaries for final x years ) x years of service / 60 (cap at 40 years normally, and hence 2/3).

So, if you work only for 10 years, you only get 10/60 of the final salary.

It is about risks and choices. Or linked that against average life expectancy rather than a fixed age.

[easy2012]

No, the key issue is guaranteeing a return at some point in the future in the belief its eliminated risk rather than the reality of simply moving it somewhere else. Final salary should never have been introduced and should be scrapped yesterday. You cant eliminate risk and therefore shouldnt be able to make promises that may or may not be depending on the weather at some point in the future unfulfillable.

Ultimately it upsets people alot more losing something theyve been promised and believe is theirs by right than upsetting them at the start by not promising it in the first place

Of course it is about hedging risks and those who quote the wrong price lost and those who choose the wrong counter parties lost too.

If you read history, the British government sold even better value annuities than final salary pensions (because British government at the time can't count properly)

[bogbrush]

Pensions are the problem, not the solution.

Your money just goes to oil the wheels of great big pensions companies when you could be investing it yourself. Basically, don't pay into a Pension, it's a mugs game.

[Mr. Piddle]

Can someone just kill me please?

I feel Ive nothing to live for anymore