MSE News: Millions face cut in final salary pensions

Old_Slaphead

StevieJ wrote: »

I think a much more significant factor would have been the UK stockmarkets seeing no progression in the past 13 years.

That as well.

Why do you think it performed so badly (it was one of the worst performing markets) at a time of buoyant world growth?

Gorgeous_George

artha wrote: »

I really still don't understand how the government can tell private firms how to make their increases in pension funds.

It is all part of a plan to transfer wealth from the poor to the rich. It is what the Tories do. It is what they have always done. Get used to it.

GG

StevieJ

Old_Slaphead wrote: »

That as well.

Why do you think it performed so badly (it was one of the worst performing markets) at a time of buoyant world growth?

The UK market is heavily into Finance (credit crunch), Tech (Bubble) and Energy (rise of state control over resources) all of which have fallen in recent times. A classic example is a company that doesn't appear to be doing too badly, Shell, I was once told to always buy Shell when the yield passes 4%, what was it recently 7% +.

MikeJones_2

Relevant to this thread too.

Out this morning:

- CPI and RPI - percentage change: lastest figures (year to June 2010) released today by Office for National Statistics

Mike

GCCR

A few questions....

I left BT early with a final salary pension based on terms that were clearly set out and written into the then pension scheme. The details, including the linking of pension increases to RPI, were explained to me/us leavers in great detail. I and thousands of my colleagues agreed to leave the company on those terms, but those terms (i.e. CPI Increases instead of RI increases) have now changed. This was obscenely blurted out to the city
by our new CEO Ian Livingstone who claimed he'd saved the company £2.9 billion.

Do you think I have a solid case for asking for my old job back as the terms of my release as explained to me, have been changed without my consent....?

What do you really think we can practically do about this obscene attack on our pensions ?

Do you know what they use to index link pensions in the rest of Europe?

Ripoff_2

ALL, If you get a reply back from your MP that says "CPI is a better measure of inflation for pensioners" or something on that vain, then ask your MP to prove the statement please. Ask him to supply written proof from the Professional bodies, to back up his claim. It will be interesting to see what proof he can supply because I can not find any literature anywhere that backs up that claim. With CPI in it's present form even the Office of National Statistics would not be able to agree to that statement and the RSS (Royal Statistical Society) certainly does not. I quote "CPI is good as a macro-economic indicator and for comparison between countries, but it is not suitable as it is to be used for wages and pensions" said at a meeting to Steve Webb on the 23rd November 2010 by Jill Leyland from the RSS

quinnect

Doubt if we can do anything about this but I just thought I would spread a little dissatisfaction with CPI as a proper measure of inflation. IDS says it is the most appropriate measure for pensioners. Actually it is not a proper measure at all. CPI is an international measure dreamed up to provide a comparison between governments. Because measures in different countries differ in the way they are presented CPI leave things out. So it does not include housing costs and council tax. There are other differences of scope but these are minor. Now the fact that RPI has been consistently about 1% above CPI for the last year made me suspicious, since housing costs and council tax had not risen in this period. I discovered that there is another difference. Whereas RPI is calculated quite correctly using the arithmetic mean of the weighted increases in a basket of products CPI uses the geometric mean. The latter is actually meant to be used for a series of increases over a period. In this case it is used to calculate the average increase in prices in one period. As far as I can discern this is simply mathematically wrong. The Royal Statistical Society is worried about it too and says that the method of calculation alone accounts for between 0.43% and 0.83% (i.e. in different months) of the difference between RPI and CPI. They admit that CPI is not a good measure of real inflation felt by people. It is hard to see why CPI does this. It seems that one of the things CPI is said to do is assume that when prices rise people substitute cheaper goods for now more expensive goods. It is possible that the geometric mean is simply chosen as a way of depressing the inflation rate to approximate the substitution effect. But this is not a proper way to calculate substitution nor is assuming substitution a legitimate way to measure inflation since it ignores like for like quality. Basically this is a Poundland inflation measure and given that this thing is obviously a government scam perhaps we ought to change the name of the UK to Poundland, an appropriate epithet. If any statisticians or mathematicians amongst you can throw some light on this I would be grateful.

Doc_N

All change now, of course, as of today's announcements by the Government. Unless you happen to be a public sector pensioner, when you still get hit, even though there was a promise of an RPI-linked pension throughout most or all of your career.

Stargazer57

Doc_N wrote: »

All change now, of course, as of today's announcements by the Government. Unless you happen to be a public sector pensioner, when you still get hit, even though there was a promise of an RPI-linked pension throughout most or all of your career.

Public sector pensioners are not being 'hit'. Almost all of them will get pensions of higher value than they thought they would - because of increases in longevity and the value of annuities which have combined to roughly double the value of a stream of income in the last 15 years.
Sure, they may be getting less than they thought they would get last year, but the long suffering taxpayer is still having to shell out billions more they they have ever been told while their own pensions have been taxed to pay for it all.

Interested_Taxpayer

Stargazer57 wrote: »

Public sector pensioners are not being 'hit'.
Oh yes they are. Lord Hutton who is conducting an enquiry into public sector pensions has said that public sector pensioners would be between 15% and 25% worse off over a life time by using the CPI. As an example, the average Civil Service Pension is currently £6700 a year with a quarter of them receiving less than £2000. Therefore, that group and many others in the Public Sector including the Armed Forces will be 'hit' very hard indeed.
You should be in no doubt that this wrong doing will leave millions of pensioners unacceptably worse off and will force some of them, particulary women, into poverty.
This needs to be put right.