They're as bad as each other

property.advert

History will judge Brown's thievery as the most foolish act. Yet it was known about at the time. What he did was simply to time shift the problem. Rob today but the consequences would be felt a generation later.

The Scottish !!!! should have been taken outside and shot in front of his family. Or better still put down at birth. For the greater good you understand.

Generali

Kennyboy66 wrote: »

Clearly the Brown raid affected money purchase schemes (and had no immediate impact on defined benefit members - although the unintended consequence was to add to the pressure to close them). This one affects defined benefit members but not defined contribution ones.

Supposedly it is between 25 and 40% of schemes that are affected, the rest have RPI explicitly stated in their legal documentation.

It is certainly not just the privatised utilities and includes the Labour party pension scheme (I'm sure you will love the irony).

Others affected included Tesco and Morrisons (deferred members only).

It hardly matter to a pensioner whether your pot grows less slowly (the 1997 change) or your income in retirement grows less slowly (the 2011 change). Surely the effect is the same.

It appears the only difference is that the 2 changes broadly affected 2 different groups of pensioners / scheme members.

All good points and I mostly agree. My guess is the change is to do with reducing the potential burden on the Government & economy at large of pension guarantees. IMHO it's only a matter of time before an asset stripper buys a company with a big pension shortfall and sells/milks the assets dry leaving the pension fund to be bailed out. It's a good business model if you're a complete <insert rude word of choice>.

Re your penultimate paragraph, the bit I disagree with a bit, you are right IMO to say that it makes no difference to the pensioner. It makes a large difference to the fund as a whole however.

vivatifosi

The thing with pension shortfalls Gen is that firms have to pay a PPF levy. Even a modest shortfall can mean big spends on insurance, that most companies will never see any benefits from. Also, the poorer the covenant and strength of the company, the higher the levy.

Trustees actually have a lot of powers in this area and you will start to see them used if asset stripping goes on. Until a few years back, a lot of trustees were poorly informed and relied on their actuaries and scheme advisors to give them the information they needed, but sometimes they would ask the wrong question because they weren't quite sure of how it all fitted together. Of course, these people are still the paid experts, but the level of expertise within trustee boards is increasing as since the mid 00's, we've had to go through the trustee toolkit training and most trustees are now much better informed.

kabayiri

Is there a case to revisiting the whole notion of retirement and what we expect out of it?

The chasm between comfortable pensioners and those in relative poverty looks set to widen.

In 2012 things like subsidised rail and bus cards are set to end for pensioners. This is causing equal concern amongst pensioners.

It all feels like a lack of direction.

vivatifosi

kabayiri wrote: »

Is there a case to revisiting the whole notion of retirement and what we expect out of it?

The chasm between comfortable pensioners and those in relative poverty looks set to widen.

I agree, though we have to see this change as part of the wider raft of changes to pensions which people aren't talking about yet, although the information is in the public domain.

The biggest of these is the fact that, starting with big employers next year (over 3000 employees), people over a very low wage will be auto-enrolled in their company's pension schemes. If they don't want to participate, they will need to opt out, as opposed to opting in as at present. This is absolutely sending a message to people that they have to save for themselves, that 30 years down the line people will be told "well, you opted out, therefore you have to live on the basic pension".

Here's a doc outlining what's coming. There have been some changes made since, not least to those companies with <50 employees, but it gives a good idea as to what its all about:
http://webarchive.nationalarchives.gov.uk/+/http://www.dwp.gov.uk/docs/auto-enrol-and-wpr-the-facts.pdf

grizzly1911

vivatifosi wrote: »

This is absolutely sending a message to people that they have to save for themselves, that 30 years down the line people will be told "well, you opted out, therefore you have to live on the basic pension".

Here's a doc outlining what's coming. There have been some changes made since, not least to those companies with <50 employees, but it gives a good idea as to what its all about:
http://webarchive.nationalarchives.gov.uk/+/http://www.dwp.gov.uk/docs/auto-enrol-and-wpr-the-facts.pdf

Unless that policy is enacted and we are prepared to push people into abject poverty, reopening "workhouses" for instances I still do not believe we will push them into just a basic "Pension" "Benefit" or whatever it is called in the future.

It will be a big politician who admits that and graphically paints that picture.

With wages being forced down and and bills relentlessly going up many will simply not be able to make this provision.

Could always raise NI for both employer and employee that way it is inescapable. But that would be seen as a tax increase, can't call it that and the inevitable cost to jobs.

vivatifosi

grizzly1911 wrote: »

It will be a big politician who admits that and graphically paints that picture.

No one in power will admit anything, they are b*ggers like that, but they are laying the puzzle pieces pointing in that direction.

I don't know whether this bit of the planned legislation will go ahead or not as I haven't been following this in detail, but if someone opts out, then after three years they will be auto-enrolled back in, though of course they can opt out again. That's the message being sent: "unless you are very poorly paid, you can opt out for a short time to pay debts, or due to personal circumstances, but don't think you can opt out of planning for your pension forever and if you do, don't expect support from us beyond the minimum" (my wording of course, but I don't see what other conclusions can be reached).

I still don't understand why more people aren't talking about this.