Channel Four exposes Greek "economics"

andybenw

harryhound wrote: »

How about retiring at 54 with a 90% pension from a hazardous job:

Ladies Hairdresser.


or be a civil servant and leave your pension to your unmarried daughter?

Sounds to me like the Greeks have been having a party on the credit card for the last 10 years. Now, instead of being forced to pay back that credit card they are being allowed of with 50% of the debt.

Anyone know what Greek austerity measures actually mean.

If it is stopping you retiring at 54 with 90% full pay then I have no problem with the rest of Europe forcing it upon them.

Linton

Mr_Mumble wrote: »

If it's a book-keeping matter you'd be quite happy to give all of your savings to the government to provide for other peoples' current consumption?!

No - I have saved far more than the average person and so despite having retired early should be able to live relatively comfortably for the remainder of my days living off the work being done by those who didnt save.

BUT if everybody saved they wouldnt all get the same benefits. For example if everyone had saved so as to retire with £1M they wouldnt all be able to live like today's millionaires, inflation would come in to ensure that spending power matched production. And production would be limited by the demographics.

Essentially IMHO private funding of pensions only works as one way to allocate future consumption, state funding from taxes is another. Neither provides extra resources over the other.

StevieJ

Generali wrote: »

There are 2 things here:

1. A funded and an unfunded pension scheme cost exactly the same amount over the life of the scheme.
2. If you have an unfunded scheme you can lie to members about howich they'll get. If you have a funded scheme you can't lie as you need to have the cash up front.

Of course you can still lie

Pressure is mounting for regulators to alter "wildly inaccurate" and "grossly optimistic" standard growth figures, after complaints that millions of investors are being misled as a result.

http://uk.finance.yahoo.com/news/Time-face-investment-reality-tele-2317723299.html?x=0

Wookster

CLAPTON wrote: »

I lack his concern for the accounting but agree we should be much more upfront about what is an achieveable distribution of income between pensioners versa the workers. Whether this is via funded or unfunded schemes makes little economic impact at the time of the distribution.

The problem is that you don't know what the true quantum of unfunded liabilities are as they are never valued properly because they are not accounted for.

If unfunded pension liabilities were accurately valued I suspect the national debate around what is affordable would be hugely more focused, perhaps with some pressure from the bond markets as well.

It is a basic tenant of accounting that you need to know how much things cost in order to make proper and functional decisions. No one really knows how much unfunded pension liabilities actually cost.

Generali

StevieJ wrote: »

Of course you can still lie



http://uk.finance.yahoo.com/news/Time-face-investment-reality-tele-2317723299.html?x=0

Fair enough but it makes it much harder. [/QUOTE]

I can promise you that I'll give you a million bucks in 30 years. If I give you $100,000 now then you have your money (I haven't done the sums) and I have shown that I can afford it. In 30 years, perhaps you get your million and perhaps you don't.

How do you plan to pay for your share of the unfunded liability (not) being accrued at present? Ah yes, of course, you can't plan for it because you have no idea how much you owe because it's not being accounted for.

Perhaps you'd like to answer a question that I've never had answered, mostly because I've never asked it before.

Why is it a good thing that future pension liabilities aren't being measured in a systematic way?

oldvicar

harryhound wrote: »

How about retiring at 54 with a 90% pension from a hazardous job:

Ladies Hairdresser.


or be a civil servant and leave your pension to your unmarried daughter?

Surely retiring at 40-something with an actuarially reduced pension of say 50% would be so much nicer.

Would be OK for Greek civil servants, who are allegedly paid twice as much as th rest anyway.

Linton

Wookster wrote: »

The problem is that you don't know what the true quantum of unfunded liabilities are as they are never valued properly because they are not accounted for.

If unfunded pension liabilities were accurately valued I suspect the national debate around what is affordable would be hugely more focused, perhaps with some pressure from the bond markets as well.

It is a basic tenant of accounting that you need to know how much things cost in order to make proper and functional decisions. No one really knows how much unfunded pension liabilities actually cost.

And no one can know the real cost until the payments are actually made. Actuaries, economists and accountants dont seem to have a very good record in predicting the future. The key problem is making an irrevocable commitment now for payments perhaps 30-40 years in the future.

20-30 years ago some money purchase schemes provided a guaranteed return on investment and many more gave guaranteed annuity rates. They were very badly hit when inflation and investment returns dropped. That's what did for Equitable Life, other failing pension companies were quietly taken over and merged into larger ones with more resources.

StevieJ

Generali wrote: »

Why is it a good thing that future pension liabilities aren't being measured in a systematic way?

I guess they are or we wouldn't have adjusted the future retirement levels, firstly the female rise in the pension age back in the 90's and now the adjustment up to 66 soon probably even up to 70. Same with public sector, or is there some other reason why they are going on strike.

Thrugelmir

Linton wrote: »

Sorry, I dont buy that.

So European Governments can continue to run ever widening budget deficits to fund the shortfall. On the basis of unrealistic growth targets.
Something has to give.

The_White_Horse

maybe their regime could be saved if they all agreed to kill themselves at 60.