Should I withdraw from Public Pension Scheme

Andy_L

Depends, I would sugest they have purchased x years of membership in a defined benefit scheme. The RPI/CPI switch is a back dated change to those defined benefits so analagous to an annuity provider changing the terms of the deal after purchase.
If they want to change to CPI for future service then thats a different matter.

CannySaver_2

Andy_L wrote: »

how happy would you be if you'd bought the RPI linked annuity & then the providor changed the indexation to CPI?

It couldn't happen, there is a contract between you and the annuity provider.

That is not the case with FS pensions, there is always the possibility that they could be changed. Many private employers have moved from DB to DC pensions.

I realise that the change from RPI to CPI is retrospective, but just imagine it had not been done, how many other changes to retirement age, contribution levels, accrual rates would need to have been bought in.

At the end of the day it's unfortunate that the change has had to be made but things do change; thats just life!

The Canny Saver

Moby

dunstonh wrote: »

ahh. So you have fallen for the political position that everyone who earns more or has money is a banker.

I also actually said ....'those who control resources and wealth'.

Cameron can agree to anything saying he wants it implemented 'worldwide' because he knows it ain't going to happen! I repeat we are in a highly difficult position because the way things are going.... Merkel and Sarkozy are going to be making the decisions in future and we will be left on the sidelines!

dshart

Moby wrote: »

I also actually said ....'those who control resources and wealth'.

Cameron can agree to anything saying he wants it implemented 'worldwide' because he knows it ain't going to happen! I repeat we are in a highly difficult position because the way things are going.... Merkel and Sarkozy are going to be making the decisions in future and we will be left on the sidelines!

The thing is that if taxes on the banks are not agreed internationally then the banks will just move to more tax favourable countries taking thousands of jobs with them. There are many countries who would love to be a financial centre like London.

Merkel and Sarkozy are captains of a fast sinking ship and it wont be long before their own people start complaining about their taxes going to pay public sector wages and pensions in bankrupt eurozone countries.

Moby

dshart wrote: »

The thing is that if taxes on the banks are not agreed internationally then the banks will just move to more tax favourable countries taking thousands of jobs with them. There are many countries who would love to be a financial centre like London.

Merkel and Sarkozy are captains of a fast sinking ship and it wont be long before their own people start complaining about their taxes going to pay public sector wages and pensions in bankrupt eurozone countries.

.....and what will their response be to the 'fast sinking ship'.... a smaller eurozone controlled by the French German axis and backed by the Benelux countries with protectionist policies to boot....and where will we be then.....that is my very point!

terry2

Andy_L wrote: »

Apart from (arguably) the RPI/CPI switch the treasury has not renaged on any (Public Sector)pension promises

Well, CPI isn't a good index: using a geometric mean rather than an arithmetic mean always results in a lower value, but when I buy stuff it is the arithmetic total that I have to pay; and CPI also excludes housing costs. I would agree that RPI wasn't perfect but CPI is so much worse as a base for indexing pensions; CPI is clearly beloved by the Treasury becasuse it is normally lower than RPI.

However you are also forgetting the fact that there will now be a cap on the allowed CPI increase., which isn't a good idea for pensioners given that the goverment (despite its protestations) is trying to inflate away its debt burden.

terry2

dshart wrote: »

It is not missing the point at all. If the employers and employees contributions had been invested in the same way that private sector workers have to now then the returns on the sums invested would be insufficient to fund the pension obligations. Even the LGPS which works similar to what you suggest requires additional funding.

Well being in a final pension scheme which has similar payment amounts to the public sector ones, but which does its own investment, I know that it is currently over 90% funded (and will probably become fully funded when the global stock market recovers). Now yes, you can argue that it might need some additional funding, but that is nowhere need the amount needed to fund the shortfall in the public sector pensions caused by the Treasury playing fast and loose with the contributions.