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Pensions Crisis Reaches Bank Of England

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Ha crisis, what crisis? The taxpayer has footed the bill yet again for enormous perks for years, they are still going to as the pension will require no contributions from employees.

http://www.telegraph.co.uk/news/main.jhtml...08/npens108.xml

Pensions crisis reaches Bank of England

By Robert Watts, Sunday Telegraph

Last Updated: 11:35pm BST 07/07/2007

Britain's burgeoning pensions crisis has reached the gates of the Bank of England. The bank plans to close its highly lucrative final salary pension scheme and raise the retirement age of new staff from 60 to 65, it can be revealed.

.....

The Bank of England's pension fund is widely regarded as the gold standard of such schemes. It makes payments based on the employee's salary when leaving the bank and can be claimed at 60. Staff do not even have to contribute to the fund.

The new fund would also be non-contributory but staff would have to retire at 65 and their payouts would be based on their average salary during service at the Bank, rather than on final pay levels.

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Ha crisis, what crisis? The taxpayer has footed the bill yet again for enormous perks for years, they are still going to as the pension will require no contributions from employees.

http://www.telegraph.co.uk/news/main.jhtml...08/npens108.xml

Pensions crisis reaches Bank of England

By Robert Watts, Sunday Telegraph

Last Updated: 11:35pm BST 07/07/2007

Britain's burgeoning pensions crisis has reached the gates of the Bank of England. The bank plans to close its highly lucrative final salary pension scheme and raise the retirement age of new staff from 60 to 65, it can be revealed.

.....

The Bank of England's pension fund is widely regarded as the gold standard of such schemes. It makes payments based on the employee's salary when leaving the bank and can be claimed at 60. Staff do not even have to contribute to the fund.

The new fund would also be non-contributory but staff would have to retire at 65 and their payouts would be based on their average salary during service at the Bank, rather than on final pay levels.

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

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I think there's a lot to be said for basing occupational pensions on average salary across a total period of employment rather than final salary. The final salary scheme encourages people to go for promotions, extra duties - in short, anything that'll boost their take-home pay - right at the end of their careers, when they are least able to cope with the stress and the demands. In my line of work there are so many senior lecturers who have gone for readerships and chairs two or three years from retirement, or people who have gone for senior administrative posts (deans, heads of department etc.) simply to boost their pensions, and have underperformed in the job. At my last university the head of department was a woman newly appointed in her late 50s, who simply didn't understand what was required with her and couldn't cope with the job. On the rare occasions she wasn't on sick leave, whole two-hour long meetings would be wasted just trying to get her to understand simple issues, and she would then go and make damaging decisions based on a misunderstanding.

The other thing the final salary concept does is to penalise people who want to back off towards the end of their careers; for example, take on a demanding, senior post in the professional peak years of 45-55 and then wind down gradually to retirement from there. But in most cases, doing that involves taking a big pension hit. A pension that was calculated on, say, X% of your take-home pay for each complete year of service would be a far fairer way of basing a pension on how much you had actually earned, IMHO.

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