Nurse..shall I retire now whilst I still have a pension

kidmugsy

All this alarmism probably stems from the unions. It lets them get people agitated and then, when the dreaded "cuts" don't happen, they'll claim that as a victory for the union. It means that they are cynically maipulating their members and treating them as ignorant and stupid, but that's par for the course.

tanith

julieb39a wrote: »

Hi...im a nurse with 17yrs final salary pension aged 57yrs...I have missed by 6 months of being able to retire with a state pension and I am worried that the gov will half my NHS pension so should I retire now and invest a lump sum or hang on as it may not affect me ?

Julie you'll be fine to hang of for few more years , nothing terrible is going to happen to your pension in the short-term..

bendix

kidmugsy wrote: »

It means that they are cynically maipulating their members and treating them as ignorant and stupid, but that's par for the course.

Ummmmm, yeah, but they are ignorant and stupid.

patanne

It is a good way though of increasing natural wastage and avoiding making redundancies and having to pay out redundancy money. So is someone going to step forward so we can see which side started the rumours?

JamesU

kidmugsy wrote: »

All this alarmism probably stems from the unions. It lets them get people agitated and then, when the dreaded "cuts" don't happen, they'll claim that as a victory for the union. It means that they are cynically maipulating their members and treating them as ignorant and stupid, but that's par for the course.

The cuts have already been implemented with the switch from RPI to CPI and will take effect from April onwards. CETV calculations were suspended in July (valuation of pensions for transfer purposes, divorce settlements etc) so that they could be recalculated to reduced values based on CPI rather than RPI, and this is the most evident quantifiable impact so far. The year on year degradation of the real term value of pensions with the switch from RPI to CPI will take longer to impact from April onwards.

The impact of the switch from RPI to CPI leading to reduced pensions is also quantifiable and described in Lord Hutton's interim report as in the link in SteveJ's post above. The 15-25% reduction in real term values of pensions is not scaremongering by unions. These figures are pubilshed in Lord Hutton's interim report which is an objective and independent overview from the Independent Public Services Pensions Commission and their panel of experts.

The final report will be available tommorrow and will most likely put forward recomendations to reduce expenditure on public sector pensions to make them more affordable and more in keeping with private sector. Various possible measures such as switching to career averaging of final salary schemes, increased retirement ages, increased contributions etc.

But the switch from RPI to CPI leading to the future reduction in pensions was not a recommendation in Lord Hutton's report. The Government had already taken the decision to switch from RPI to CPI in July last year, and the panel reported on the impact of this decision in their interim report in October last year.

The pension cuts are being implemented and they are real. The people who are ignorant and stupid are those who are not prepared to rationalise and understand the real facts and their implications.

JamesU

bendix

JamesU wrote: »

The pension cuts are being implemented and they are real.

Good.

We can't afford them.

JamesU

bendix wrote: »

Good. We can't afford them.

For sure they are unaffordable as they stand, there needs to be change and Lord Hutton’s report will put forward recommendations to that effect. But to my mind the issue is to what extent there should be a balance between prospective and retrospective changes to peoples’ pension provision. The former is not in question, existing employees have the choice to accept changes or move on. But on the latter, meddling with pre-existing contractual arrangements and years of pension planning for that service already given is more questionable. But there is no need to dwell on those issues here as they are being covered on the EDM1032 thread in detail.

JamesU

jamesd

JamesU wrote: »

The pension cuts are being implemented and they are real.

Pension benefits for public sector employees have been increasing, not decreasing, even though what's getting the attention now is the moves to try to recover some of those increases. To quote the report:

"4.42 The cost of pensions in 2004 was a third higher than it would have been if assumptions about life expectancy were the same as those in 1955. Similar results can be calculated for the other unfunded schemes. This increase in cost has mostly been paid for by employers and taxpayers."

What's happening now is merely something that will go some way to getting the benefits paid out to their past levels. It may be cuts in money or inflation terms but that's been more than balanced by the increase in the number of years that the pensions are being paid out for.

It's easy to see why in chart 4G on page 72 of the report. 1985 based period life expectancy was around 74.5 years at birth. By 2008 it had risen to 83 years at birth.

Retiring at 65 with a 74.5 year life expectancy you can expect 9.5 years of pension. Retiring at 65 with an 83 year life expectancy and you can expect 18 years. 18 / 9.5 = 1.9 times the pension payout.

It's worse, though. Life expectancy at retirement age has increased by more than life expectancy at birth, so the value of the pension payments has also gone up by more.

I'd have thought that with all the fuss about increasing state pension age due to longer lives it'd be obvious that there's an increase in pension benefits going on that has to be addressed in some way. One of those ways is to reduce the amount paid or the inflation rate to compensate for the money being paid out for longer.

jamesd

JamesU wrote: »

But to my mind the issue is to what extent there should be a balance between prospective and retrospective changes to peoples’ pension provision. The former is not in question, existing employees have the choice to accept changes or move on. But on the latter, meddling with pre-existing contractual arrangements and years of pension planning for that service already given is more questionable.

Easy enough. Keep the same contractual benefit and stop the pension payments at the original life expectancy or offer people an actuarial reduction in amount paid to get the pension for longer than originally anticipated in the contract.

But better still, switch them all to the same money purchase basis as private sector pensions, to maximise mobility of labour and minimise the penalties for changing careers or jobs. For the unfunded ones, use a virtual pot of money, not an actual one, if it's too painful to actually start funding with real money.

paparossco

bendix wrote: »

It gets worse and worse. What on EARTH makes the OP think the government is going to 'halve her pension.'

Seriously, where do people get their information from?

It might have been here:

"The change would mean a nurse with a final salary of £40,000 could see their pension slashed from £20,000 a year after 30 years' service to £6,000."

Read more: http://www.thisismoney.co.uk/pensions/article.html?in_article_id=523755&in_page_id=6#ixzz1G8OnY5mN