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The Masked Tulip

End Of Pensions

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I would have thought that Rentokil's annoucment today re closing it's pension fund to existing workers would have merited a thread by now?

I think this has grave consequences for ALL private sector workers across the UK. I think Rentokil are doing the only thing they can, especially when looking across the Atlantic to the likes of GM and Ford, in protecting their business.

No doubt many other UK Plcs will now follow suit and the consequences for UK Plc are going to be simply enormous. This will leave public sector workers on a wonderful gravy train - if the Government does not reform - radically - public sector worker pensions I can see the death of UK Plc in the next 10 years.

Quite simply, if more private sector firms close their pension schemes to existing workers, which I now think they will do in large numbers, and the public sector pensions remain unreformed there will be no incentive whatsoever to work for anyone other than the public sector.

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Quite simply, if more private sector firms close their pension schemes to existing workers, which I now think they will do in large numbers, and the public sector pensions remain unreformed there will be no incentive whatsoever to work for anyone other than the public sector.

I think the move by Rentokill is a right one, in todays short term contract world people should take responsibility for their own futures through private schemes and not rely on their employer/government to secure it for them. Obviously it should be incentivised through taxation and top-ups but ultimately the 'owner' of the scheme should be the recipient.

Without doubt other companies will follow suit to cap their liabilities. I vaguely caught on the news today that BT has £1B pension liabilities :unsure:

UK PLC has enormous pension liabilities particuarly regarding its generous public sector schemes. However, unlike other businesses, these liabilities don't need to be declared on the government balance sheet, nor does any pot of money have to actually exist to fund these commitments.....this liability all falls on the propensity to pay of the future Tax payer: I pay my parents pension and in return rely on my kids paying mine through taxation, it really is a government run pyramid scheme.

Public sector employees may have an argument that the generosity of their schemes is in return for a lower basic wage, they may even be congratulating their unions for recently negotiating the security of these agreements. Unfortunately the fact of the matter is if you are below 40 forget the promises you have being fulfilled. Whether it gets reformed or not the fact of the matter is there will not be the future tax receipts to fund it.

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The implications for a consumer led economy if the population has to save a far greater proportion of their income?

Perhaps one of the reasons GB doesn't want to confront this issue head on.

Telling people they will have to consume less now in order to be able to consume at all in retirement wouldn't help his or NL's popularity.

Never mind "My house/BTLs is/ are my pension".

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How can productive workers in the UK, who have lived through an amazing period of changes via technological development to the basic operations providing products in the economy, which should have made eveyone much richer, now be forced to work till they drop dead with no benefits, and are 'lucky' if they have a home?

Its beyond a joke.

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How can productive workers in the UK, who have lived through an amazing period of changes via technological development to the basic operations providing products in the economy, which should have made eveyone much richer, now be forced to work till they drop dead with no benefits, and are 'lucky' if they have a home?

Its beyond a joke.

You want answers?

My view fwiw, it's because Human societies are basically a more sophisticated, albeit only slightly, version of the pack as seen in other animal species.

Sure we dress things up by talking about caring, empathy, looking after the weak etc.

Look at the reality though. Who, mainly, are worshipped and given as exemplars? The rich and successful.

The "top" dogs and bitches.

I don't judge whether this is good or bad, merely observe.

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You want answers?

My view fwiw, it's because Human societies are basically a more sophisticated, albeit only slightly, version of the pack as seen in other animal species.

Sure we dress things up by talking about caring, empathy, looking after the weak etc.

Look at the reality though. Who, mainly, are worshipped and given as exemplars? The rich and successful.

The "top" dogs and bitches.

I don't judge whether this is good or bad, merely observe.

hmm... I know those top dogs would be banging thier fists on the table if they didn't get massive golden parachutes and millions in wages etc...!

Why aren't UK workers going for the jugular?

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I think the move by Rentokill is a right one, in todays short term contract world people should take responsibility for their own futures through private schemes and not rely on their employer/government to secure it for them. Obviously it should be incentivised through taxation and top-ups but ultimately the 'owner' of the scheme should be the recipient.

Excuse me.

Im gonna sound like some socalist hippy here but nevermind.....

Didnt entering the pension scheme deomonstrate a "responsibility for their own futures"?

These companies entered into a contract with their employees to provide pension fund contributions.

Over the years they failed to invest their share into the funds - keeping the money for other purposes and piling up credits. How the f**k can these companies after 25 years of record stockmarket growth - that they decided not to invest in on behalf of their employees - turn around and pull the schemes?

This is absolutely outrageous.

The people who made these decisions should be prosecuted and the directors and shareholders made personally liable. If one of the employees suddenly decided not to honour their contract what do you think would happen?

And now what?

I have to pay higher taxes to fund this? F**k that.

Do you reckon the directors are losing their pensions?

Why the hell am I feathering the nests of people who set out to deceive, manipulate and steal?

By paying into a scheme they limited their life choices, kept inflation down and made the country more competitive (therefore increasing the value for the shareholders).

Now, at retirement age, they get it in the ass and I get to pay the bill for the next 30 years?

I dont f**king think so.

Rant over. (Exit stage left)

Edited by needle

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hmm... I know those top dogs would be banging thier fists on the table if they didn't get massive golden parachutes and millions in wages etc...!

Why aren't UK workers going for the jugular?

As in the "pack". The "pecking order".

We call it "socialisation".

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Do you reckon the directors are losing their pensions?

In recent years more and more directors of large companies have opted to take their pension mainly in a lump sum. Of course, they still get a big whack every year also BUT... I think the fact that so many take the cash and run is a sign of what little confidence they have in their own pension funds.

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Excuse me.

Im gonna sound like some socalist hippy here but nevermind.....

Rant over. (Exit stage left)

Needle, you make some valid points but you don't actualy offer any solution to the problem other than sack the directors, take them to court and presumably fold the business through its liabilities.

The fundamental problem is:

1) Renumeration promises that have been made are financaly flawed, the business is at risk of failure in order to meet the commitments.

2) Those (directors) who made the original promisses have probably long since gone.

3) The serving directors need to arrive at a plan to balance outgoings v income.

Who says the tax-payer is paying here? The business is honouring (freezing) the fund to date, it now needs to re-negotiate with it's employees on renumeration package going forwards.

I don't know what industry you work in but in mine, if it's deemed one is being renumerated too much one gets the choice of redundancy or re-negotiation.

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Excuse me.

Im gonna sound like some socalist hippy here but nevermind.....

Oh yes, and if you are a socialist hippy, just remember it's Gordon Brown who introduced the Tax raid (Dividend Tax credit) on pension funds to the tune of £5B per annum since '97.

Sure this is not the only factor, but robbing a total of £40B from pension funds really hasn't helped the issue.

He introduced the measure as:

"I'm introducing a policy for increase investment"

Which translates from Brown speak to English as:

"If I raid the se funds, companies and the population will natuarly have to invest more"

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Could well be the beginning of the end for final salary schemes - in the good old days at the post office blokes would slave their lives away for the final two years are then die either just before retirement or just after ... (Ok probably not loads of people did but enough for me to have been told of it happenening by various different people within the postoffice)

What's probably interesting to think about is the insurance industry has announced its biggest ever losses - so will insurance cease to be? If they're expecting more and more natual disasters then maybe they'll stop covering them as its too much of a risk financially and they only like to make a profit.

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A great day for UK plc, finding another cost cutting measure to keep us competitive. The alternative is these companies go bust or outsource resulting in less money for schools and libraries.

People should take charge of thier own lives, I commend this measure to the house!

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Didnt entering the pension scheme deomonstrate a "responsibility for their own futures"?

Accepting a promise from a company that might well not exist in fifty years that they'd pay for you to retire on a cosy pention paid for by future workers doesn't sound terribly responsible to me. Company pensions have been a scam that allowed companies to avoid paying realistic salaries, nothing more.

The simple fact is that it's very hard to have a significant fraction of your population not working but making a decent income, no matter how it's funded.

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Do you think it's now time to revoke/reduce the pensions of retired people? Or better still make them work part-time for the money?

If we (the younger) have to wave goodbye to pensions (and we were PROMISED them) then why cannot the retired be told "Sorry but..."?

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Do you think it's now time to revoke/reduce the pensions of retired people? Or better still make them work part-time for the money?

If we (the younger) have to wave goodbye to pensions (and we were PROMISED them) then why cannot the retired be told "Sorry but..."?

A lot of people seem to forget that many organisations took holidays from paying into their pension funds which is precisely why there is not enough money to go around now, and this is especially true in the public sector.

What is clear is that there is no redress even though this is basically a failure to contribute. For those who would say well no one should depend on pensions anyway that is just lazy - tell me if lots of people retire with no pension, who ends up paying for their welfare?

If you are thinking it will be their children or other relatives you are just being hopeful, in reality it will be the taxpayer.

Its all very well looking at the pension situation and saying well "I'm sorted with my own little plan so it won't affect me" but in reality you and your children will end up paying more taxes to cover bad pension decisions by companies and other organisations like this.

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A lot of people seem to forget that many organisations took holidays from paying into their pension funds which is precisely why there is not enough money to go around now, and this is especially true in the public sector.

What is clear is that there is no redress even though this is basically a failure to contribute. For those who would say well no one should depend on pensions anyway that is just lazy - tell me if lots of people retire with no pension, who ends up paying for their welfare?

If you are thinking it will be their children or other relatives you are just being hopeful, in reality it will be the taxpayer.

Its all very well looking at the pension situation and saying well "I'm sorted with my own little plan so it won't affect me" but in reality you and your children will end up paying more taxes to cover bad pension decisions by companies and other organisations like this.

Hmm - yes I see. I rashly started a thread on this by the way but of course it is in the wrong forum.

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in reality you and your children will end up paying more taxes to cover bad pension decisions by companies and other organisations like this.

Unless the majority of a company's customers are abroad, we and our children will end up paying for the pensions anyway... and most people are not going to accept that.

BTW, I just saw a front page article on one of the papers claiming that the EU want to impose an extra 3.5% income tax on us... which, if enacted, will soon rise higher and higher. Do you think that anyone's going to be collecting a fat pension in a world of rising taxes, rising prices and deflating salaries?

The whole retirement scam is going to fall apart over the next decade. The only way that people are going to be able to live comfortably is to find something that other people will pay them to do.

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I knew the writing was on the wall when, several years ago, my sister who works for a large American Investment Bank faxed over the paperwork for me to review when her Final Salary Scheme was being converted to a Money Purchase one. IIRC, the "bribe" to buy her out was ~ £30,000.

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Accepting a promise from a company that might well not exist in fifty years that they'd pay for you to retire on a cosy pention paid for by future workers doesn't sound terribly responsible to me. Company pensions have been a scam that allowed companies to avoid paying realistic salaries, nothing more.

The pensions weren't meant to be paid for by future workers unlike the state pension. The companies were supposed to invest money (which investment would then be separate from the company and safe and protected even if the company went bust) to pay their pensioners. It is only a problem now because the companies have not until now been required legally to keep the amount they invest on track to cover those future liabilities. So the result is that the current and future employees must suffer in order to make up for the deficit. I believe legislation is being put in place requiring companies to keep their investment on track properly so that this cannot happen in the future. The result? Yes, the companies suddenly realise how costly these schemes are and close them.

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Do you think it's now time to revoke/reduce the pensions of retired people? Or better still make them work part-time for the money?

If we (the younger) have to wave goodbye to pensions (and we were PROMISED them) then why cannot the retired be told "Sorry but..."?

we (the younger generation) are not being required to wave goodbye to the pensions we have already accrued. It is simply NOT LEGALLY POSSIBLE to revoke/reduce pensions ALREADY ACCRUED... only unfortunately we (the younger generation) have not had time to accrue much whereas people who are retired now are safely in the boat that we were about to climb aboard. We cannot (without a revolution) capsize the comfy pensioners boat so we must try and keep afloat and swim until we find another boat ...or more likely the lifebelt we will be able to provide ourselves with... or possibly the polestyrene float the government will throw our way if we have not managed even that.. I just hope I don't get cramp (ie ill) because I was never that good a swimmer anyway even with a float.

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What's probably interesting to think about is the insurance industry has announced its biggest ever losses - so will insurance cease to be? If they're expecting more and more natual disasters then maybe they'll stop covering them as its too much of a risk financially and they only like to make a profit.

I work for a large insurance company, and while it's true they have had huge losses this year, they are actually going to be in a better poisition next year when they up their premiums. 9/11 actually made it illegal to buy certain types of property insurance without also getting terrorism cover. So that benefitted the insurance industry. The same will happen for the hurricanes - the entire industry will raise their rates and POOF another insurance boom.

Also beneficial because it's easier to raise capital against losses which are seen as acts of god rather than mismanagement. Eg my company made net losses of $400m from rita and katrina and then turned around and raised $600m in capital. So they are actually better off.

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we (the younger generation) are not being required to wave goodbye to the pensions we have already accrued. It is simply NOT LEGALLY POSSIBLE to revoke/reduce pensions ALREADY ACCRUED...

doesn't that simply mean they'd have to change the law?

When pension schemes die what happens?

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doesn't that simply mean they'd have to change the law?

No

When pension schemes die what happens?

Rentokil has pension liabilities of £965 million but pension assets of only £640 million. There is a shortfall, if Rentokil can make up the deficit over the next 10 years by:

a)closing the scheme to new employees and probably trying to trick the existing employees who have already accrued benefits by offering them paltry sums to be put into money purchase schemes in return for them signing away the portion of final salary entitlement they have got so far.

B) Making cuts, redundancies, squeezing salaries, no pay rises for years etc etc

..then thats what will probably happen. The pensioners with final salary schemes will be fine. The employees who say no to the money purchase bribe will have some benefit. The new employees will suffer.

...if Rentokil can't make up the deficit it will eventually go bust and the pensioners will share out what's in the pension assets pot because the liquidators will not touch this and will get maybe 2/3 of the pension they should have got...

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  • 341 Brexit, House prices and Summer 2020

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      • down 5% +
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      • up 5%



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