how are all these final salary pensions going to be funded?

The_White_Horse

Birmingham council alone has an unfunded deficit of over 1bn!!!!

this is simply insanity.

I think anyone on a final salary pension should have it taxed at 80% to fund other final salary schemes.

Blacklight

Nobody's got the bottle to ditch them. There's too many votes at stake. If they did it'd sort out most of our deficit.

MoneySavingUser

They will borrow £1bn from a bank - this bank will raise the £1bn by selling bonds on the market which pension fund managers will buy

1 year later it will all unravel and both the bank and the people who bought its bonds will need bailing out by the taxpayer....

abaxas

I would assume they would be inflated away like the 70's.

My grandparents saw about a 50% reduction in actaul pension value in that period. It'll take time, but it will happen.

Old_Slaphead

abaxas wrote: »

I would assume they would be inflated away like the 70's.

My grandparents saw about a 50% reduction in actaul pension value in that period. It'll take time, but it will happen.

How do they get inflated away if they're inflation linked ?

daveyjp

It's a notional deficit - anyone who has a mortgage has a "deficit".

abaxas

Old_Slaphead wrote: »

How do they get inflated away if they're inflation linked ?

Becasue linked to the offical measure of inflation does not mean if follows rises in prices.

Eg beer as an example.

ruggedtoast

I have a final salary pension. I believe it is being funded by a machine that sucks the very lifeblood from the veins of hard working families.

I am comfortable with this.

Old_Slaphead

abaxas wrote: »

Becasue linked to the offical measure of inflation does not mean if follows rises in prices.

Eg beer as an example.

Yes it does - think pension is RPI linked rather than BPI (beer price inflation) linked.

Old_Slaphead

ruggedtoast wrote: »

I have a final salary pension. I believe it is being funded by a machine that sucks the very lifeblood from the veins of hard working families.

I am comfortable with this.

It certainly does.

My bro-in-law's main complaint is after 40 years in public sector he'll have to pay higher rate tax on some of his pension (all together now - aaaaaaah).

Still, to compensate, after just reaching 60 he's got his free bus pass (just to save him using his nice new car too much) and his winter fuel allowance which helps him pay for his low energy bills which he expects once he gets his new government-sponsored boiler installed.

In his spare time he expects to be jetting round the world watching England play cricket - it's a tough life being a public sector pensioner.

Running_Horse

My private pension at my old job was closed to new members years ago. Most of its benefits are being gradually eroded; for example, recently had a letter restricting retirement before 60. If the private sector can no longer afford these schemes, then why is it assumed taxpayers will carry on picking up the bill for civil servants? There is a dangerous apartheid growing, and many young people will no longer consider any kind of career in the eneterprise sector, which will one day no longer be able to keep picking up the bill. Civil service pensions should be capped at the same pension average as in the private sector.