Pensions Robbery Discussion thread, all viewpoints welcome!

jamesd

fwor wrote: »

It didn't work like that with the older BT pension schemes, did it? Despite having a duty to look after the interests of the scheme's members, the Trustees caved in immediately to BT's choice to move from RPI to CPI indexation, even though the government attempted to make clear that it wasn't mandatory to do so for private schemes.

That's a matter for the scheme members to discuss with their trustees.

I think that the older BT scheme may be partly funded by the government to cover some pre-privatisation costs and that may be a factor that doesn't exist in purely private schemes.

fwor wrote: »

The money that BT will save through this move will go straight to company profit - what a surprise that BT senior management bonuses depend on profit, and not on whether they treat their pensioners fairly...

That's good for other pensioners who may have BT shares in their pension funds. The employee benefits are also something that the employees should be discussing with their employer.

Defined contribution schemes remove such issues, leaving it down to a nearly pure money being paid in by the employer now comparison, with some attention to investment choices and costs.

fwor

jamesd wrote: »

That's a matter for the scheme members to discuss with their trustees.

Yeah, right - try "discussing" it with them when the guy in charge caved in and then left immediately, and all the rest act like it's nothing to do with them.

jamesd wrote: »

Defined contribution schemes remove such issues, leaving it down to a nearly pure money being paid in by the employer now comparison, with some attention to investment choices and costs.

Yes, but these changes apply to people who paid in to a defined benefit scheme because it was all that existed. For thousands of people the change has wiped perhaps tens of thousands of pounds of remaining lifetime value off their pensions - retrospectively, and typically many years after they had finished paying their contributions.

robmatic

fwor wrote: »

It didn't work like that with the older BT pension schemes, did it? Despite having a duty to look after the interests of the scheme's members, the Trustees caved in immediately to BT's choice to move from RPI to CPI indexation, even though the government attempted to make clear that it wasn't mandatory to do so for private schemes.

The money that BT will save through this move will go straight to company profit - what a surprise that BT senior management bonuses depend on profit, and not on whether they treat their pensioners fairly...

I think the view of most trustees of final salary schemes, given that by and large these schemes tend to be in deficit, is that a more affordable scheme is more likely to survive than an increasingly expensive one, and that the interests of a scheme's members are best served by the employer being able to continue funding it.

fwor

robmatic wrote: »

that the interests of a scheme's members are best served by the employer being able to continue funding it.

Except that all of the Trustees knew full well that there is no possibility of the scheme failing due to BT no longer being able to fund it (because of one of the terms associated with privatisation).

They clearly did not act in their members' interests, and there is sweet FA their members can do about it.

fairleads

atush wrote: »

Good thing we don't have to buy them any longer.

Same thing happened with drawdown rates. Previously capped at 120% of the annuity rate now reduced to 100%. A drop of 16.66%

Moby

RenovationMan wrote: »

On a different board someone posted this today:

"TBH if you have 20+ years or so to retirement like myself, it's my belief that it's not worth saving for one [a pension] as you'll be unlikely ever to collect it. Pension schemes are being robbed, downgraded right left and centre, on top of that the next 20 years are likely to be catastrophic for our money based system.

Folk might laugh but they can stick to their plans and I'll live each day like it's my last and when it's over, it's over."

I have heard this sort of statement periodically throughout my working life and I've even seen fellow workers turn down company pension membership due to the ideas above. Two memorable ones were a fellow about 10 years ago who was a high rate tax payer who turned down a Money Purchase pension where the employer put in 10% and the employee contributed 3%. Another person was more recent where he earned almost £60k per year and turned down a 1/60th Final Salary pension stating the same standpoint as above.

I looked at both (and others dotted about during my career) with a look of disbelief on my face as I find it inconceivable to not save for your retirement. However, I'd be interested in what other peoples views were on this sort of statement. I am also hoping that some of the pension professionals would provide details on the likelyhood and occurances of pensions schemes are being 'robbed' and provide details of the various compensations schemes and their levels.

Don't be suprised by this attitude....especially amongst the young. You reap what you sow. People have developed a 'live for today' rather self centred attitude towards life and society based on the worship of unfettered capitalism. The idea of deferred gratification is not as attractive as owning the new iphone! Our values and economy are consumerist driven....its the way the market works! So much of this is subliminal of course.....consider the influence of advertising for example!

molerat

The big problem is that there are way too many snouts in the trough of your pension fund as the years go by making far more from it than you ever will.

WhiteHorse

The poster has a point. Pensions are based almost entirely on the stock market - which is nothing but pure speculation. It is also a fact that governments are increasingly greedy and desperate, and will move the goalposts without hesitation.

Pensions are not gods, yet they are treated as such. Like house prices, people have been encouraged to believe that they are guaranteed, and that there is a right to an enormous return.

Saving is common sense and a spendthrift always has been a fool The prudent saver will diversify.

CLAPTON

young people have always had a live for today attitiude and have a curious mixture of believing themselves indestructible but also considering that death is preferrable to being 30. (they learn otherwise fairly quickly of course)

nothing new here and nothing to do with having a materialistic attitudes

it's certainly not obvious what is the best way of making provision for old age

the private sector pension provision has undergone major collapse with increasing number of people with no company provision at all

with the various and continuing scandals and fiddles within the pension industry why would anyone want to trust their future well being to them anyway?

the totally cynical way the government is holding interest and gilt rates low has a major impact of people pension income;

whilst making provision for old age is essential it's very difficult to give any sensible advice to the young about the best way forward so it's not surprising that many take the view that saving for a house is better than starting a pension

chucknorris

I'm a recent convert to pensions, previously I thought that for me they were a waste of money. But now I can definitely see the value in them (for me) as a way of increasing the ability to spend capital during my retirement years and use pension income as a hedge against living an exceptionally long time, instead of hanging onto more capital and ending up the richest man in the graveyard.