Terrible Dispatches On Pensions

[spyguy]

Lousy.

DB pensions.

Question to BHS pensioner:

Do you feel responsible for the pension deficit?

Ohpf course shes not!

Answered: well i paid 5% into the scheme.

Now folliwed by an accountant who retired at 53!!!

40k pension, halved because the scheme went bust. Hardly surprising letting people retire at 53 on 40k

[EssKay]

Just watching it on c4 +1 now. The sense of entitlement is staggering

[19 year mortgage 8itch]

Just watching it on c4 +1 now. The sense of entitlement is staggering

Why? Are they Bremainers?

[spyguy]

Not sure if its a sense of entitlement, or just not being able to do the maths.

There's a whole generation of people putting 50/month into a personal pension, expecting it to pay out 30k/year.

After being very close to some pension/company disasters, I steer clear of any compnay with a closed DB pension. All my work will be sucked up by it.

[EssKay]

Why? Are they Bremainers?

Give it a rest bollo

[spyguy]

The rules on pensions are grossly unfair.T

hey need to be changed so the payout are proportional to contributions.

Having someone not retired having their pension cut so someone already retired stinks.

[RentingForever]

Boo-hoos from the 62 year old accountant who now won't be able to holiday to the Carribean during the cricket season or go to Australia.

He should be grateful for the 9 year run at 40k he had (did he not save any of that?); and the further 20 years or so at £20k he can look forward to. I doubt he paid enough in to cover half all that.

Edited July 18, 2016 by RentingForever

[EssKay]

Not sure if its a sense of entitlement, or just not being able to do the maths.

There's a whole generation of people putting 50/month into a personal pension, expecting it to pay out 30k/year.

Probably both

[spyguy]

Boo-hoos from the 62 year old accountant who now won't be able to holiday to the Carribean during the cricket season or go to Australia.

He should be grateful for the 9 year run at 40k he had (did he not save any of that?); and the further 20 years or so at £20k he can look forward to. I doubt he paid enough in to cover half all that.

Yes. Id have loved to see how much he contributed.

Why is accoutant surprised the scheme ran out of money when he retired at 53 on 40k?

You're talking a pension pot of well over 1m to pay that out.

[One-percent]

My father in law has drawn his DB pension, index linked for longer than he has paid into it.

[longtomsilver]

Had a look into my mother's finances today* and her teachers pension+state pension comes to £22,600 gross plus investment income from her £500,000 of liquid assets takes her close to the higher rate tax threshold. She lives in a mortgage free house that's worth £550,000-£625,000 that was bought for £20,000 and she feels 'poor' the sense of entitlement is breathtaking.

If I can get a 1 bed flat and £12k per annum (not expecting a state pension and half made up by working until 65-68) I'll have considered myself to have done well in this climate.

[ChewingGrass]

Chap at work was telling me about his aunt who was a secretary and retired from Tailor Blimpey (name changed to google proof it) in the 1980s, just before her date the pension scheme informed her that there had been a terrible mistake and they had been taking too much money as contributions over her working life. Unfortunately the rules of the scheme final salary meant exactly that and they couldn't pay her more but as compensation they would add 5% to the indexing of it for the rest of her life. Bearing in mind this was the 1980s and inflation was at double digit levels of ridiculousness the actuary must have thought this was a good deal.

She is now 90 and this year her pension has just crossed the 60k/year mark and she openly admits that she doesn't know what to do with it other than tuck it away in the bank.

[spyguy]

My father in law has drawn his DB pension, index linked for longer than he has paid into it.

My Dad managed a grand total of ~25 years in gainful employment.

His expected working life was ~50 years.

We barely worked during his 30s - his choice, he was p1ssign around all his 30s.

Gormarried to my Mum at 40, prmisued PILs hed settle donw, got 50% deposit from PILS. Lasted 2 years at first jobs, quit. Went somewhere else (Whitby woodworkers) , quit that after 2 years, went back to original place and was laid off 8 years later.

Has done fckall since.

He's been draining benefits - pensions + dole/family credit for 3~35 years.

I dont think hes that unusual for the area.

[spyguy]

Had a look into my mother's finances today* and her teachers pension+state pension comes to £22,600 gross plus investment income from her £500,000 of liquid assets takes her close to the higher rate tax threshold. She lives in a mortgage free house that's worth £550,000-£625,000 that was bought for £20,000 and she feels 'poor' the sense of entitlement is breathtaking.

If I can get a 1 bed flat and £12k per annum (not expecting a state pension and half made up by working until 65-68) I'll have considered myself to have done well in this climate.

I need to look into the TPS fund.

Its meant to be funded/PAYE

I really fail to see how its solvent as the length of time teachers are drawing from it is massive.

I have a sneaky feeling the TPS will blow up in a few years.

[SpectrumFX]

I need to look into the TPS fund.

Its meant to be funded/PAYE

I really fail to see how its solvent as the length of time teachers are drawing from it is massive.

I have a sneaky feeling the TPS will blow up in a few years.

I think this is one of those pensions where all of the "contributions" are just swallowed up into HM Treasury. Payments obligations are then met by HM Treasury as they fall due. So when it blows up it takes us all with it.

I think they're all being moved to Career Average, but that will just be for future service, so the historical insolvency is baked in the cake.

[spyguy]

I think this is one of those pensions where all of the "contributions" are just swallowed up into HM Treasury. Payments obligations are then met by HM Treasury as they fall due. So when it blows up it takes us all with it.

I think they're all being moved to Career Average, but that will just be for future service, so the historical insolvency is baked in the cake.

It has the venner of a funded. A quick look at the blurb - its unfunded.

[Frugal Git]

Yep.

My own dad deserves everything he gets - a fine man, who worked tirelessly and supported us wonderfully. He was taken advantage of at work - grossly underpaid for 25 of his 30 years at that place (the 5 years he wasn't were at the beginning - he was learning the ropes like everyone else then).

However karma has certainly swung his way in his pension. The open market value for which means there's a 600k deficit. He won't be alone in that.

60% initial final salary, 5% compounded increases on 2/3, cpi on the other 1/3. Means he gets a pay rise of 4% every year at least usually.

Spousal benefit is mum will get 60% of what he was getting when he passes away, with the same growth benefits built in.

His pension passed my salary this year, and will only continue to outpace it. and thats without his full state pension, plus another private very healthy sipp which hasn't even been crystallised.

I'm going to set it up so my parents really start giving money away hand over fist to my sibling now. Their expenses, which could easily be slashed are 40% of net income. If you can't fight the system just exploit it and redistribute locally.

In another anecdote though, 6 year old (retired 10 years ago) bloke - on his own in a 4 bed detached - across the road has two identical 50k German estate cars. Spends all his time polishing them and waxing on about how much he has lost in depreciation. But has to have two because he wants to 'spread the miles between them'.

It seems some of these oldies have so much money they are inventing ever more bizarre ways to spend it.

[spyguy]

Yep.

My own dad deserves everything he gets - a fine man, who worked tirelessly and supported us wonderfully. He was taken advantage of at work - grossly underpaid for 25 of his 30 years at that place (the 5 years he wasn't were at the beginning - he was learning the ropes like everyone else then).

However karma has certainly swung his way in his pension. The open market value for which means there's a 600k deficit. He won't be alone in that.

60% initial final salary, 5% compounded increases on 2/3, cpi on the other 1/3. Means he gets a pay rise of 4% every year at least usually.

Spousal benefit is mum will get 60% of what he was getting when he passes away, with the same growth benefits built in.

His pension passed my salary this year, and will only continue to outpace it. and thats without his full state pension, plus another private very healthy sipp which hasn't even been crystallised.

I'm going to set it up so my parents really start giving money away hand over fist to my sibling now. Their expenses, which could easily be slashed are 40% of net income. If you can't fight the system just exploit it and redistribute locally.

In another anecdote though, 6 year old (retired 10 years ago) bloke - on his own in a 4 bed detached - across the road has two identical 50k German estate cars. Spends all his time polishing them and waxing on about how much he has lost in depreciation. But has to have two because he wants to 'spread the miles between them'.

It seems some of these oldies have so much money they are inventing ever more bizarre ways to spend it.

Get him to divorce your Mum and marry you.

The spousal benefits are a killer - 60 YO ex-headteacher n 70k marries 24 YO Thai bride.

[Frugal Git]

Get him to divorce your Mum and marry you.

The spousal benefits are a killer - 60 YO ex-headteacher n 70k marries 24 YO Thai bride.

Haha - brilliant idea! Easily could pay some poor millenial graduate working in starbucks £9 p/h for 40 hours per week to do nothing but marry my dad. Finger in the air estimate would see an excess of 10k pa from the start compounded at 4% for the next 60 years to be creamed off.

I'm sure someone reading this will eventually do it!

[19 year mortgage 8itch]

Why go to that trouble? Keep his body in a freezer and hire an actor every time you need to prove he's alive. Far less messy than involving a marriage.

[Frugal Git]

Why go to that trouble? Keep his body in a freezer and hire an actor every time you need to prove he's alive. Far less messy than involving a marriage.

Trooper that he is, he'd probably be well up for that.

[Sandwiches33]

My grandparents worked really basic jobs van driver and shelf stacker, paid "not very much" into some pensions, I dont know all the details of it but they ended up with a paid for house in the centre of a major city then a rent paid retirement home. One day my grandad admitted to me he was earning more from this and benefits that I was earning in my salary I had to support a family with. They had so much money they started buying jewelry and shit. He admitted they didn't even know what to do with the money. They couldn't understand how I couldn't save and was always broke and i tried explaining my rent alone was 700 quid. With bills etc I had to earn over 11000 quid before I could even put food on the table.

This is one of the greatest thefts in history, My generation and the others coming up have been well and truly shafted on this and house prices, thank ****** I worked through college and didn't take the debt of that too. I also think this is another form of helicopter money.

[man o' the year]

Get him to divorce your Mum and marry you.

The spousal benefits are a killer - 60 YO ex-headteacher n 70k marries 24 YO Thai bride.

Aren't teacher pensions spousal benefits only for those who pass away in service? That was my understanding.

[kzb]

I can't believe some of the contributions on this thread.

These DB pensions actually do have assets and funding. (It's true the employer has to make up any shortfall due to poor performance of investments.)

You're also forgetting the employer contributions, which usually exceeded the employee contributions.

They were also contracted out of SERPS and other forms of extra state pension.

Where it went wrong is that the pension funds (which at the time were awash with money) were misused to give people early redundancy.

And to answer post #23, there is a spousal pension for the partners of those who pass away. It is usually half pension, which can be reduced further if the spouse is more than a few years younger than the deceased.

The main question to ask is, why is it we used to be able to afford these pensions and now we can't, even though the economy is much larger.

[RentingForever]

They were also contracted out of SERPS and other forms of extra state pension.

All of our SERPS/S2P contributions were effectively stolen to create the new State Pension.